Daily Archives: November 8, 2007

Genesis: The Creation of the Saudi Crime Syndicate

Conspiracy Archive | Oct 6th, 2007

by Paul & Phillip D. Collins

When it was discovered that money from Saudi Princess Haifa bint Faisal had found its way, into the hands of Al Qaeda operative and advance man for the 9/11 hijackers Omar al-Bayoumi, the Saudi Princess put forward one of the worst alibis ever concocted. Princess Haifa claimed that she was giving the money to a woman named Majeda Ibrahin Dweikat so she could treat her thyroid condition (“The Saudi Money Trail,” no pagination). The good Princess claimed she had no idea that Majeda and her husband, Omar Basnan, were passing the money to Omar al-Bayoumi (no pagination).

The problem is that Majeda’s husband, Osama Basnan, was known to be a “vocal Al-Qaeda sympathizer” (no pagination). According to a law enforcement official, shortly after the 9/11 attacks, Basnan “celebrated the heroes of September 11” and referred to September 11 as a “wonderful, glorious day” (no pagination). Basnan is also known to have “met with a high Saudi prince who has responsibilities for intelligence matters and is known to bring suitcases full of cash into the United States” (no pagination). Princess Haifa also connected to Omar al-Bayoumi through her husband, Prince Bandar bin Sultan. Omar al-Bayoumi had worked for Dallah Avco, the aviation services company owned by Prince Bandar’s father, Prince Sultan (no pagination). All of this seemed to suggest that more connected Princess Haifa to Omar al-Bayoumi than just unintended charity.

However, the 9/11 Commission accepted Princess Faisal’s alibi at face value. Why did the Commission give thumbs-up to such a flimsy explanation? The Commission never intended to find the truth behind 9/11. Its job was to cover up the fact that the United States government and the American aristocracy were intimately tied to the amalgam of terrorist financiers and criminals collectively referred to as the Saudi elite or Saudi Royals. This alliance goes back to the birth of the modern state of Saudi Arabia. This genesis story doesn’t begin with a charismatic Arab leader, but with a member of British intelligence: St. John Philby, known also as Jack Philby.

Jack Philby: Saudi Arabia’s Founding Father

Many people are more acquainted with Jack Philby’s son, the notorious Communist double agent, Harold Adrian Russell Philby, also known as Kim Philby. However, Jack’s story is no less important. Jack could be considered the founding father of Saudi Arabia. Jack Philby was a British Civil Servant who was dismissed for sexual misconduct (Loftus and Aarons 25). From there Jack was picked up by British secret service MI6 in 1915 (25). The British secret service was known for its anti-Jewish ranks that viewed all Jews as secret communists (31-2). The anti-Jewish sentiments found in the British secret service had trickled down from the British power elite.

The British saw the Balfour Declaration as merely a foreign propaganda tool meant to get American military support during World War 1 (29). The British actually favored more of an Arab presence in the Palestine territory with a small Jewish minority to placate America (29). This is why the Balfour Declaration of 1917 promised that Palestine would be “a national home” as opposed to “the national home” for the Jews (29). The Balfour Declaration’s language would allow for a situation where the Jews would be insignificant in the Middle East.

Jack’s involvement in British secret service probably helped shape his anti-Jewish mindset. John Loftus and Mark Aarons elaborates:

During the early 1920s, Philby and his secret service colleagues did everything they could to undercut Zionist immigration. Philby’s secret service station organized anti-Jewish propaganda in Palestine. To be fair, he was merely carrying out a policy organized by his predecessors to stir up the Arabs against the Jews. According to several of our sources, Great Britain was the first modern country to use its intelligence service to organize terrorist acts against the Jews. (33)

However, Jack was more than just a Jew-hater. Philby’s fanaticism went much further than the fanaticism of his colleagues in MI6 or the British power elite. While the British power elite and MI6 were anti-Jewish, they were still not supportive of Arab self-determination and political independence. From the perspective of the British oligarchs and MI6, the Arab world was to be divided into French and British spheres of influence.

The secret Sykes-Picot agreement of 1916 was concocted for just this purpose (28-9). Jack Philby was fanatically pro-Arab. In 1917, Jack met with the chieftain of the Wahhabi sect, Ibn Saud (30). This was supposed to be just a minor political mission, but what came out of it was an alliance between Jack and Ibn Saud as well as Philby’s adoption of Wahhabism (30-1). Philby passed intelligence information to Ibn Saud that allowed the House of Saud to defeat Sharif Hussein and the Kingdom of Saudi Arabia was born (35).

Did Jack Philby help found Saudi Arabia on behalf of the British power elite and MI6? In all likelihood, the answer is no. Philby’s support of Ibn Saud was motivated by his hatred for Britain. When Philby realized that British promises of Arab independence were not genuine, he broke politically with England (28). Still, Philby’s pro-Arab fanaticism buttressed the British power elite’s anti-Jewish agenda. While he may have been a renegade, Jack Philby’s work seemed to always help one or more faction of the power elite. This included the American elite. With the aid of Allen Dulles, Jack Philby would connect the Saudi elite to American elite.
Dulles, Big Oil, and ARAMCO

In the 1930s, Philby was able to convince Ibn Saud to allow foreign investment in the Kingdom in the name of discovering oil. Philby convinced Ibn Saud to allow Charles Crane to facilitate exploration of Saudi Arabia’s subsoil assets (42). In 1933, Standard Oil of California (SOCAL) negotiated with Philby for a 60-year contract that allowed SOCAL to have exclusive rights to explore and extract oil (42-3). This was the beginning of what would become the Arabian-American Oil Company (ARAMCO). The U.S. State Department classifies ARAMCO as the richest commercial prize in the history of the planet (“St. John Philby,” no pagination).

A key player in the creation of ARAMCO was Dulles ally James Forrestal. Forrestal brought SOCAL and Texaco together in an agreement that formed Caltex, the parent company of ARAMCO (Loftus and Aarons 63). James Forrestal’s ties to the Dulles brothers were extremely important. Not only was the Dulles brothers agents of the power elite, but Allen Dulles had also been in a criminal relationship with Jack Philby since 1921 (39). In that year, Philby, who was then the secret service head of intelligence for Transjordan, met Allen, who was then stationed in Istanbul (39). Allen helped Jack guarantee the economic and political survival of Ibn Saud through his connections to American oil companies (38). Together, Philby and Dulles helped build the modern state of Saudi Arabia and connect the American elite to the Saudi elite.
The 9/11 Cover-Up

A real inquiry into the September 11th attacks would have proven disastrous for the American power elite. A genuine investigation would have revealed that the Saudi elite had their hands all over the attacks. This would have led to a deeper examination of the Saudi elite, which would have revealed that the American power elite has been connected to the Saudi criminal and conspiratorial infrastructure since Philby and Dulles created it.

A bogus investigation had to be concocted. The first indication of a cover-up came when President Bush attempted to appoint Henry Kissinger to head the 9/11 Commission. Kissinger’s consulting firm, Kissinger Associates, has had dealings with Saudi Arabia in the past (Scheer, no pagination). When the public and activists raised the roof over this move, Henry was replaced with Thomas Kean. Kean is the director of oil giant Amerada Hess (Hicks 76). At the time of the 9/11 hearings Amerada Hess was conducting a joint venture with the Saudi Arabian oil company Delta Oil (76). The idea that Kean would follow the Saudi money trail of 9/11 was laughable.
Conclusion

The political landscape is filled with many discomforting truths that the common man must wrap his head around. One of those truths is that those who claim to be defending us are in bed with the very forces they claim to be defending us from. The connection between the American elite and the Saudi elite illustrates this point. It is time to take responsibility for our own protection, instead of leaving it in the hands of those who see us as cattle to be harvested.

References 

U.S. GMO Rice Caused $1.2 Billion in Damages

Reuters | Nov 7, 2007

by Lisa Shumaker

CHICAGO – Trace amounts of genetically modified varieties of rice that were found commingled in the U.S. rice supply in 2006 caused more than $1.2 billion in damages and additional costs, the environmental group Greenpeace International said on Monday.

U.S. rice exports fell sharply after Bayer CropScience, a division of Bayer, reported in 2006 that trace amounts of its biotech LibertyLink rice variety LLRICE601 were found in a widely grown variety of U.S. rice called Cheniere. Later, a second variety called Clearfield 131 was found to be contaminated with LLRICE604.

“Until we’ve seen the report, we really can’t comment,” said Bayer spokesman Greg Coffey.

The discovery of GMO-tainted rice triggered the largest financial and marketing disaster in the history of the U.S. rice industry, according to Greenpeace. At least 30 countries were affected by the contamination and many closed their markets to U.S. rice, including major importers such as the European Union and the Philippines.

The overall cost to the industry, estimated at $1.2 billion, included losses of up to $253 million from food-product recalls in Europe, U.S. export losses of $254 million in the 2006/07 crop year and future export losses of $445 million, Greenpeace said.

“It’s impossible to know what the cost is,” said David Coia of trade group USA Rice Federation. “It’s certainly the most significant event in the history of the U.S. rice industry. The current rice crop is in pretty good shape. We’ve been able to eliminate most of the genetically engineered material.”

Hundreds of U.S. farmers and European businesses have filed lawsuits against Bayer in attempts to recoup their losses, said the environmental group.

Greenpeace is urging India not to go ahead with field trials of GMO varieties because it could risk suffering a similar contamination and loss of exports.

A lengthy U.S. investigation failed to pinpoint how the biotech rice entered the U.S. supply. However, all three varieties of rice were grown at a research station in Louisiana from 1999 to 2001.

Chinese-made toy poisoning kids with date-rape drug

KENS 5 Eyewitness News | Nov 7, 2007

by Ross Palombo

One of the year’s hottest toys has been recalled, but not because of lead.

Some bad beads in the toy Aqua Dots are poisoning kids with a date-rape drug.

Their bright colors and endless combinations clearly captured the imagination of Sarah Zieben.

“I made a cat and a bee,” she said.

Now she feels stung that the Aqua Dots could not only be dangerous, but could be deadly.

“I was like, ‘Please don’t say they’re poisonous,'” Sarah said.

“If it’s toxic, it has to go,” Sarah’s mom, Morna Zieben, said.

It came in as one of the hottest toys of the year, but now maker Spin Master is taking Aqua Dots off the shelves after a scare from a similar tiny, round product on the other side of the globe.

“I hope they go off the market,” said Charlotte Lahane.

Lahane is one of three Australian children rushed to the hospital after swallowing the similar Bindeez beads.

Doctors say they contain a chemical that converts into powerful date-rape drug, gamma-hydroxybutyrate, or GHB, when ingested.

“This toxin can cause you to become comatose, from which you may either stop breathing or obstruct your airway and potentially cause death,” said Naren Gunja, with Australia’s Poison Information Center.

No one had died yet, but Australia has pulled the Chinese-made product.

Aqua Dots is now pulling it’s products, too, out of an ‘abundance of caution.’

UK Gov’t May Double Detention-Without-Charge Limit

 

CNS News | Nov 6, 2007

By Patrick Goodenough

(CNSNews.com) – British Prime Minister Gordon Brown on Tuesday will announce plans to revisit an issue that brought his predecessor his biggest parliamentary defeat — increasing the number of days police will be allowed to hold suspected terrorists without charge.

Legislation to be announced in the Queen’s Speech — the government’s annual policy address at the state opening of parliament — is expected to include a measure that would raise from 28 to a possible 56 days the limit on pre-charge detention.

Tuesday’s speech comes a day after the head of Britain’s MI5 domestic security agency, Jonathan Evans, warned that the number of known Islamic terror suspects had climbed to at least 2,000. Separately, the European Union’s newly-appointed anti-terrorist chief, Gilles de Kerchove, told E.U. lawmakers in Brussels Monday that al-Qaeda “continues to be the most serious terrorism threat to Europe,” and warned of fresh attacks.

Former Prime Minister Tony Blair suffered a humiliating defeat two years ago this week when the House of Commons shot down his proposal to allow police to hold terror suspects for up to 90 days without charge.

Resistance then came not just from the official opposition Conservative Party and third-largest party, the Liberal Democrats, but also from 49 left-leaning members of the ruling Labor Party who voted against the government. Lawmakers instead voted to extend the then limit of 14 days to 28 days.

Brown faces an similarly tough challenge, although the government will point to the Aug. 2006 exposure of a major plot to blow up airliners over the Atlantic, and failed car-bombing attempts in London and Glasgow last June, to bolster its argument for stronger police powers in rare circumstances.

Arguments in favor of extending the limit have centered on concerns that police run out of time and are forced to let suspects go or to charge them with lesser offenses.

In a speech last July, Brown highlighted one case in which police had to investigate hundreds of mobile phones and computers, go through thousands of gigabytes of data and thousands of documents on multiple continents, and search more than 70 locations.

Senior police officers who supported Blair’s 90-day proposal said the nature of terror threats differed from those posed by the Irish Republican Army in the past. They argued that forensic and technological requirements were more complex, and networks were invariably international, requiring inquiries in numerous jurisdictions.

A Home Office consultation paper published over the summer said “this new terrorist threat” seeks to maximize casualties, without warning. Police cannot afford to wait to catch terrorists red-handed but in order to protect the public have a duty to apprehend them earlier, thus having less evidence available at the time of arrest, it said.

The current 28-day limit, which comes with judicial oversight and entered into force last July, is already unpopular with opposition parties and human rights groups, who note that it is the highest in any democracy.

David Davis, the Conservative spokesman on Home Office affairs, argues that 2004 civil emergency legislation already allows for a temporary extension of the period of detention without charge in the event of a crisis situation.

Liberty, a civil rights group that led opposition to Blair’s 2005 proposal, agrees that the emergency measures could be “triggered in a genuine emergency in which the police are overwhelmed by multiple terror plots.”

But the Home Office counters that this option for extending the pre-charge detention period may be impractical, as it would require parliamentary approval in the middle of what might be a national emergency in the wake of a major foiled or actual terrorist attack.

The Muslim Council of Britain, an umbrella group, opposes the current 28-day limit, saying that Britain faces a threat “not dissimilar to that facing many other countries yet no other E.U. country or Western state seeks such a drastic measure.”

Extending the period would lessen the incentive for police to work quickly and efficiently, the organization’s legal affairs committee said in a statement.

The MCB said it was essential that any new counter-terror measures “do not inadvertently serve to alienate sectors of so society whose support is integral to our success, and do not risk fuelling prejudice and intolerance.”

It said there was already evidence that measures introduced since 2001 were viewed by some Muslims as being targeted disproportionately at them, leading to resentment and a reluctance to cooperate with police.

In his speech Monday, MI5 chief Evans said British teenagers as young as 15 were being recruited and radicalized by extremist groups, and that al-Qaeda’s campaign against Britain was being orchestrated from several countries, including Pakistan, Iraq and Somalia.

The Ramadhan Foundation, Britain’s leading Muslim youth organization, called Evans’ comments “inflammatory” and said he should have made it clear that 2,000 people out of a community of 1.6 million “is a very small problem.”

The organization’s chief executive, Shazad Anwar, acknowledged that “there is a real and present threat to the nation from terrorism” but added that “we have to be honest about why this threat has appeared, mainly foreign policy. Only then will we be able to defeat terrorism.””

Musharraf expands authoritarian power

 

Pakistani President Pervez Musharraf, just another US-sponsored tinpot dictator

News Net Nebraska | Nov 5, 2007

by Dave Link

Over the weekend, Pakistani President Pervez Musharraf declared a police state throughout the country of Pakistan. Musharraf, who has been lauded by the Bush administration for being a voice of Democracy in the region, announced a state of emergency due to the threats the Islamic military poses to the country’s already instable government.

Some have argued that Musharraf’s move has also targeted the Supreme Court of Pakistan which recently has been investigating the legitimacy of his election and taking measures to check his power.

Despite Secretary of State Condeoeezza Rice’s diplomatic efforts, Musharraf has suspended Pakistan’s constitution, jailed thousands of protestors, censored independent media outlets and taken authoritarian control.

“I want to be very clear. We believe that the best path for Pakistan is to quickly return to a constitutional path and then to hold elections,” Rice said in a press conference Monday.

Musharraf’s actions have also resonated further down the democratic tree. Parliamentary elections, which had been scheduled for January of 2008, may now be delayed for upwards of one year.

China, Russia pledge to step up closer partnership

China Daily | Nov 7, 2007

MOSCOW — China and Russia on Tuesday pledged to step up their partnership as they inked sweeping deals ranging from politics and diplomacy to energy and finance.

The agreements were signed after visiting Chinese Premier Wen Jiabao and his Russian counterpart Viktor Zubkov conferred on bilateral relations. The two sides agreed bilateral cooperation in political, economic and humanitarian areas “has yielded abundant and substantial results” as the two prime ministers commended the fruitful cooperation achieved under the decade-long Sino-Russia strategic partnership of cooperation.

Wen, who arrived here on Monday, held talks with Zubkov for two hours before witnessing the signing of a series of agreements, including a China-Russia Joint Communique.

Of the nine agreements, four concern future cooperation on the peaceful use of nuclear power. The two sides also agreed to complete the construction of an oil pipeline connecting China and Russia by the end of 2008.

Highlighting that Sino-Russian ties were facing a favorable situation of development, Wen called on the two countries to seize the strategic opportunity to boost bilateral relations to a higher level.

The Chinese premier also noted that the Chinese government would continue the policy of further promoting the partnership, peace and friendship throughout generations formulated by leaders of the two countries.

The two prime ministers both agreed to boost bilateral cooperation by improving the quality of the two-way trade, expanding mutual investment, strengthening cooperation on high-tech projects, boosting energy cooperation, settling cross-border protection and the utilization of water resources, and promoting exchange and cooperation in such fields as education, culture, public health, tourism and sports, including at the provincial level.

Up to September this year, the bilateral trade volume had exceeded the total volume of last year, topping US$33 billion, and the volume is expected to top US$40 billion for the whole year, hitting a record high, according to the statistics provided by the Russian side.

Hailing the bilateral ties as “at their highest point,” Zubkov said the Russian-China partnership serves the fundamental interests of the two countries and plays a positive role of maintaining peace and development of the world, and therefore are “solid” and “promising.”

This is the 12th regular meeting between the two prime ministers.

Another item high on the agenda of Wen’s two-day official visit was attending the closing ceremony of the year-long program of the Year of China in Russia, which involved more than 200 activities.

Wen spoke highly of the success of the theme-year program, a reciprocal event of the Year of Russia in China held in 2006, suggesting the two nations should continue their work to promote such programs in an attempt to further enrich the Sino-Russian partnership.

Wen and Zubkov also exchanged views on a wide range of heated international issues, and other issues of common concern.

During his visit to Russia, Wen met with Russian President Vladimir Putin, held a seminar with the Russian parliament members, and delivered a speech at a China-Russia high-level economic forum.

Russia is the final leg of Wen’s four-nation visit, which included Uzbekistan, Turkmenistan and Belarus. He also attended the sixth Meeting of Prime Ministers of the Member States of the Shanghai Cooperation Organization (SCO) in Uzbekistan’s capital Tashkent.

Oil price creates a new world order

Sydney Morning Herald | Nov 8, 2007

by Mark Landler

AS the price of oil surges above the symbolic milestone of $US100 ($106) a barrel – with Malaysia’s TAPIS crude hitting $US100.54 yesterday – it is creating new winners and losers across the globe.

In southern China, high oil prices forced Wang Pui, a truck driver, to wait in line 90 minutes the other day to fill up, just to be told he could pump only 98 litres, as China faced spot shortages of petrol and diesel.

When Vladimir Putin was making Russia’s bid to be host of the 2014 Winter Olympics last July, he reached into the country’s deep pockets, bulging with oil profits, and pledged $US12 billion to turn a Black Sea summer resort into a winter-sports paradise. Russia, which was nearly bankrupt a decade ago, won the Games.

The prospect of triple-digit oil prices has redrawn the economic and political map of the world, challenging some old notions of power. Oil-rich nations are enjoying historic gains and opportunities, while major importers – including China and India, home to a third of the world’s population – confront rising economic and social costs.

Managing this new order is fast becoming a central problem of global politics. Countries that need oil are clawing at each other to lock up scarce supplies and are willing to deal with any government, no matter how unsavoury, to do it.

In many poor nations with oil, the proceeds are being lost to corruption, depriving these countries of their best hope for development. And oil is fuelling gargantuan investment funds run by foreign governments, which some in the West see as a new threat.

“Five months ago, readers would not have recognised SWF as meaning sovereign wealth fund,” said Daniel Yergin, chairman of Cambridge Energy Research Associates, referring to the funds set up by Russia, Norway and others to invest their oil profits. “And yet now,” he said, “they’re recognised as one of the fundamental forces of the global economy.”

The basic calculus of expensive oil still holds: exporters enjoy a windfall and importers bear a heavier burden. But some unexpected countries are reaping benefits, as well as costs, from higher prices.

Consider Germany. Although it imports virtually all its oil, it has prospered from extensive trade with a booming Russia and the Middle East. German exports to Russia grew 128 per cent from 2001 to 2006; exports to the US grew just 15 per cent.

Throughout Europe, the rise of the euro has acted as a hedge against fluctuations in the dollar-denominated oil market, while the heavy taxation of fuel has made rising oil prices less jarring to motorists.

“For Europeans,” said David Fyfe, a senior oil market analyst at the International Energy Agency in Paris, “$US100 oil is mostly symbolic.”

Elsewhere, it is much more. For developing countries, oil can be a tool of national transformation, whether the goal is a middle-class standard of living or a utopian society.

In Venezuela the President, Hugo Chavez, is pouring oil proceeds into a socialist revolution, creating free health care, free education and cheap food; enabling heavy public spending that has helped fuel four years of economic growth.

The trouble, says Theresa Paiz, a Latin American director for the Fitch ratings agency, is that it’s not really clear how the money is invested. Mr Chavez’s government is steering large chunks of money to development funds and state-owned companies not subject to audits.

Transparency International, an organisation that tracks corruption, ranks countries from least to most corrupt, and in its 2007 index Venezuela was at 162 out of 179 countries.

Concerns about corruption are even more pronounced in Nigeria and Angola.

Oil-rich Angola is taking in 2½ times the cash it did three years ago. Hotels in the capital, Luanda, are booked months in advance, largely by foreign oil companies. Sales of luxury cars are booming and the International Monetary Fund projects the economy will grow 24 per cent this year, one of the world’s fastest rates.

Yet analysts for the Catholic University of Angola’s research centre say two in three Angolans live on $US2 or less a day, the same ratio as in 2002, when the country’s decades-long civil war ended.

The Government of Angola is eager to show that oil wealth is benefiting ordinary citizens. It has rebuilt 3800 kilometres of roads, refurbished four airports, and laid 690 kilometres of railroad tracks.

But many Angolans take it as a given that oil has enriched public officials most of all. In 2003 a newspaper in Luanda identified the 20 richest people in Angola: 12 were government officials and five were former officials.

Angola’s growing muscle means it is now the biggest oil supplier to China and the sixth biggest to the United States. This is leading it to rethink its global position. It recently joined the Organisation of the Petroleum Exporting Countries and is limiting its cooperation with the IMF.

China has become Angola’s financier, lending Luanda as much as $US12 billion for the country’s reconstruction, in return for guaranteed oil supplies.

The contest among importers to secure access to oil supplies has become fierce.

China, a one-time oil exporter that now must import half its oil, is facing politically troublesome shortages of fuel from Shenzhen to Beijing, as Chinese refining companies refuse to supply diesel at unprofitable state-regulated prices. To head off a crisis, China raised retail prices for fuel nearly 10 per cent on November 1.

India is potentially even more vulnerable than China. Although it consumes a third as much oil as China, it imports 70 per cent of its oil. It also has no strategic reserves and demand is growing faster than in any other economy except China’s. Like China, India subsidises fuel, particularly the kerosene used by lower and middle-class families for cooking, a policy that costs it some $US12 billion a year.

If oil reaches $US100 a barrel and stays there, analysts say, India will be forced to roll back those subsidies.

Sooner or later, prices are going to bite, said Subir Gokarn, Standard & Poors chief economist in Asia.

Without an increase in retail prices, officials at the Ministry of Petroleum and Natural Gas warned recently, they might no longer be able to buy adequate supplies of crude for India’s refineries. Unless consumers are paying for what they consume, said M. S. Srinivasan, the petroleum secretary, the ministry is going to be left with a big hole in its pocket.

But raising fuel prices could ignite even greater civil unrest in India than in China, where a man was killed recently after jumping a line to buy petrol in the city of Xinyang, in Henan province.

Even in developed countries like Canada, rising oil prices can cause dislocation. The region around the oil sands in northern Alberta is the closest thing the developed world has to a 19th-century boom town. The influx of workers has created a shortage of skilled labour in neighbouring British Columbia, where construction is under way for the 2010 Winter Olympics.

In comparison, the problems faced by other oil producers seem almost benign. For them, the most burning question is what to do with all the money. Norway, the world’s 10th-largest oil producer, wants to guarantee every child a subsidised kindergarten spot by the end of 2008.

It has increased spending on kindergarten to $US3.3 billion this year, from $US2.75 billion, partly using money transferred from its $US350 billion State Pension Fund, once known as the Petroleum Fund. Most of the fund is earmarked to pay the future pensions of Norway’s 4.6 million people.

AS the price of oil surges above the symbolic milestone of $US100 ($106) a barrel – with Malaysia’s TAPIS crude hitting $US100.54 yesterday – it is creating new winners and losers across the globe.

In southern China, high oil prices forced Wang Pui, a truck driver, to wait in line 90 minutes the other day to fill up, just to be told he could pump only 98 litres, as China faced spot shortages of petrol and diesel.

When Vladimir Putin was making Russia’s bid to be host of the 2014 Winter Olympics last July, he reached into the country’s deep pockets, bulging with oil profits, and pledged $US12 billion to turn a Black Sea summer resort into a winter-sports paradise. Russia, which was nearly bankrupt a decade ago, won the Games.

The prospect of triple-digit oil prices has redrawn the economic and political map of the world, challenging some old notions of power. Oil-rich nations are enjoying historic gains and opportunities, while major importers – including China and India, home to a third of the world’s population – confront rising economic and social costs.

Managing this new order is fast becoming a central problem of global politics. Countries that need oil are clawing at each other to lock up scarce supplies and are willing to deal with any government, no matter how unsavoury, to do it.

In many poor nations with oil, the proceeds are being lost to corruption, depriving these countries of their best hope for development. And oil is fuelling gargantuan investment funds run by foreign governments, which some in the West see as a new threat.

“Five months ago, readers would not have recognised SWF as meaning sovereign wealth fund,” said Daniel Yergin, chairman of Cambridge Energy Research Associates, referring to the funds set up by Russia, Norway and others to invest their oil profits. “And yet now,” he said, “they’re recognised as one of the fundamental forces of the global economy.”

The basic calculus of expensive oil still holds: exporters enjoy a windfall and importers bear a heavier burden. But some unexpected countries are reaping benefits, as well as costs, from higher prices.

Consider Germany. Although it imports virtually all its oil, it has prospered from extensive trade with a booming Russia and the Middle East. German exports to Russia grew 128 per cent from 2001 to 2006; exports to the US grew just 15 per cent.

Throughout Europe, the rise of the euro has acted as a hedge against fluctuations in the dollar-denominated oil market, while the heavy taxation of fuel has made rising oil prices less jarring to motorists.

“For Europeans,” said David Fyfe, a senior oil market analyst at the International Energy Agency in Paris, “$US100 oil is mostly symbolic.”

Elsewhere, it is much more. For developing countries, oil can be a tool of national transformation, whether the goal is a middle-class standard of living or a utopian society.

In Venezuela the President, Hugo Chavez, is pouring oil proceeds into a socialist revolution, creating free health care, free education and cheap food; enabling heavy public spending that has helped fuel four years of economic growth.

The trouble, says Theresa Paiz, a Latin American director for the Fitch ratings agency, is that it’s not really clear how the money is invested. Mr Chavez’s government is steering large chunks of money to development funds and state-owned companies not subject to audits.

Transparency International, an organisation that tracks corruption, ranks countries from least to most corrupt, and in its 2007 index Venezuela was at 162 out of 179 countries.

Concerns about corruption are even more pronounced in Nigeria and Angola.

Oil-rich Angola is taking in 2½ times the cash it did three years ago. Hotels in the capital, Luanda, are booked months in advance, largely by foreign oil companies. Sales of luxury cars are booming and the International Monetary Fund projects the economy will grow 24 per cent this year, one of the world’s fastest rates.

Yet analysts for the Catholic University of Angola’s research centre say two in three Angolans live on $US2 or less a day, the same ratio as in 2002, when the country’s decades-long civil war ended.

The Government of Angola is eager to show that oil wealth is benefiting ordinary citizens. It has rebuilt 3800 kilometres of roads, refurbished four airports, and laid 690 kilometres of railroad tracks.

But many Angolans take it as a given that oil has enriched public officials most of all. In 2003 a newspaper in Luanda identified the 20 richest people in Angola: 12 were government officials and five were former officials.

Angola’s growing muscle means it is now the biggest oil supplier to China and the sixth biggest to the United States. This is leading it to rethink its global position. It recently joined the Organisation of the Petroleum Exporting Countries and is limiting its cooperation with the IMF.

China has become Angola’s financier, lending Luanda as much as $US12 billion for the country’s reconstruction, in return for guaranteed oil supplies.

The contest among importers to secure access to oil supplies has become fierce.

China, a one-time oil exporter that now must import half its oil, is facing politically troublesome shortages of fuel from Shenzhen to Beijing, as Chinese refining companies refuse to supply diesel at unprofitable state-regulated prices. To head off a crisis, China raised retail prices for fuel nearly 10 per cent on November 1.

India is potentially even more vulnerable than China. Although it consumes a third as much oil as China, it imports 70 per cent of its oil. It also has no strategic reserves and demand is growing faster than in any other economy except China’s. Like China, India subsidises fuel, particularly the kerosene used by lower and middle-class families for cooking, a policy that costs it some $US12 billion a year.

If oil reaches $US100 a barrel and stays there, analysts say, India will be forced to roll back those subsidies.

Sooner or later, prices are going to bite, said Subir Gokarn, Standard & Poors chief economist in Asia.

Without an increase in retail prices, officials at the Ministry of Petroleum and Natural Gas warned recently, they might no longer be able to buy adequate supplies of crude for India’s refineries. Unless consumers are paying for what they consume, said M. S. Srinivasan, the petroleum secretary, the ministry is going to be left with a big hole in its pocket.

But raising fuel prices could ignite even greater civil unrest in India than in China, where a man was killed recently after jumping a line to buy petrol in the city of Xinyang, in Henan province.

Even in developed countries like Canada, rising oil prices can cause dislocation. The region around the oil sands in northern Alberta is the closest thing the developed world has to a 19th-century boom town. The influx of workers has created a shortage of skilled labour in neighbouring British Columbia, where construction is under way for the 2010 Winter Olympics.

In comparison, the problems faced by other oil producers seem almost benign. For them, the most burning question is what to do with all the money. Norway, the world’s 10th-largest oil producer, wants to guarantee every child a subsidised kindergarten spot by the end of 2008.

It has increased spending on kindergarten to $US3.3 billion this year, from $US2.75 billion, partly using money transferred from its $US350 billion State Pension Fund, once known as the Petroleum Fund. Most of the fund is earmarked to pay the future pensions of Norway’s 4.6 million people.

The discipline is structural, said Johan Nic Vold, a consultant and former executive at Royal Dutch Shell. Without it, the demands on politicians to use the oil revenue would be almost insatiable.

Dubai has taken a similarly long view. Treating its oil reserves as temporary, it used the proceeds to expand pell-mell into tourism, trade, real estate and construction. The oil sector now accounts for only 5 per cent of Dubai’s gross domestic product.

But perhaps no country has revelled in its oil wealth like Russia. NetJets Europe, the private-jet company, plans to open an office in Russia because the traffic between Moscow and London has become so dense.

“Russians have kept London’s high-end real estate market buzzing. There are a lot of Russian buyers around who are prepared to pay a vast amount of money,” said Michael Chetwode of the Home Search Bureau.

Back home, Russia’s oil wealth is trickling down. Mr Putin is using it to finance priority national projects, like improved health care and education, and access to affordable housing.

Oil may also help Mr Putin cling to power. As he noted recently: “We all remember what state the country was in seven, eight years ago.” (When oil was $US16 a barrel.)

Arms makers are the only ones winning war of terror

Sydney Morning Herald | Nov 7, 2007

ARMS manufacturers are making record profits from the war on terrorism and unprecedented spending on weapons programs.

The massive earnings have drawn condemnation from Australian defence experts, who say expensive weapons such as jet fighters, warships and satellites are not the way to combat terrorism.

The world’s biggest arms maker, Lockheed Martin in the US, maker of fighter jets including the F-35 Joint Strike Fighter, which Australia is buying, announced last week it had increased third-quarter profits by 22 per cent to $US11.1 billion ($12.1 billion).

Northrop Grumman, maker of aircraft carriers, submarines and bombers, increased profits 62 per cent to $US489 million.

At General Dynamics, maker of the Abrams tank, which Australia has just bought, profits climbed 24 per cent to $US544 million.

Britain’s BAE said its profits were up 27 per cent to £657 million ($1.23 billion).

In Australia profits for the Government-owned naval ship and submarine builder ASC rose 60 per cent last year to $30 million. The company was set up to build the Collins class submarines and is involved in the $8 billion air warfare destroyer project.

Hugh White, professor of strategic studies at the Australian National University, said the big-ticket weapons were designed to contain China, not combat terrorism.

“They don’t admit to it. They sell it to the people as a response to terrorism, but that is not what they are doing,” Professor White said.

Professor White said Australia’s multibillion-dollar defence purchases such as the Abrams tanks, warships, and Globemaster transport planes would be part of any US military operation in the Middle East or against China.

Professor Kevin Clements, director of the Australian Centre for Peace and Conflict Studies at the University of Queensland, said the war on terrorism was a front to keep up arms spending to maintain the US’s ability to fight a wars on three fronts – Asia, the Middle East and Europe.

Pentagon: Our new robot army will be controlled by malware

 

Register | Nov 6, 2007.

A US defence department advisory board has warned of the danger that American war robots scheduled for delivery within a decade might be riddled with malicious code. The kill machines will use software largely written overseas, and it is feared that sinister forces might meddle with it in production, thus gaining control of the future mechanoid military.

The most eye-catching of the equipment mentioned is the lineup of the US Army’s Future Combat Systems (FCS) programme. FCS was originally supposed to include a wide range of deadly unmanned systems, including a small, possibly rocket-firing flying Dalek, a heavily armed autonomous helicopter gunship, and a robot tank packing guided missiles and cannon. There would also be intelligent sensor minefields, droid-mule transport systems and loads of other stuff; and all of it is supposed to be linked together by a data network.

Some of this has been scratched from the plans of late to save money – fans of Keith Laumer’s Bolo novels will be sorry to hear that the robotanks have gone – but FCS remains a big deal, and parts of it are meant to arrive within a few years.

“On the network the strong become stronger,” runs the US Army slogan. But now the US Defence Science Board, in a report being analysed by the military press, have started to worry about that network.

“The System of Systems Common Operating Environment (SOSCOE) and the Integrated Computer System/Operating System (ICS/OS) rely predominantly on [Commercial Off The Shelf – COTS] and Open Source software,” say the gov advisors.

“The ICS/OS is almost 99 per cent COTS/OS,” they add. “The SOSCOE, essentially the ‘middleware’… is almost 80 per cent COTS/OS.”

Apparently the FCS programme office has admitted that there is a “low to moderate risk that malicious code could be inserted… and exploited.”

It seems there is also an “irresistible tendency to replace relatively secure special-purpose communications… with the general purpose Internet Protocol (IP) stack.”

If that doesn’t boil down to a teenager with a laptop seizing control of robot helicopter gunships, we don’t know what does. We’ll say that again: ROBOT GUNSHIP HAX0R ARMY MENACE 2 SOCIETY. Aiee! Run! (It won’t be any use, but run anyway.)

The soldiery have come up with some cunning plans to deal with this problem, including that of using undercover software buyers so that the vendors wouldn’t know they were selling to the US military. There was also a suggestion that “the profit motive will assure clean code in shrink-wrapped consumer software”. (They really did say that, apparently.)

The Science Board guys said they were “skeptical” of these thoughts, and concluded that “malicious code is a key concern of the FCS program”.

Read the full report in all its hefty pdf glory here.

Still, things might be OK. Apparently the incredibly expensive new F-22 Raptor stealth superjet is pretty secure (it “appears to be at the high end… for secure software development”). So the Raptor finally has a clear and well-defined purpose: saving the taxpayers from the hacker robot army.