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NightWatch 20091202


For the Night of 2 December 2009

North Korea: Update. On the second day of the currency exchange, authorities froze all cash transactions using the green, internal won until next Monday. Transactions involving foreign currencies and the international won are still allowed at some restaurants and shops for foreigners.

Possibly the most important impact of the freeze will be to force all foreign currency stashes in private hands into the open and into the government. The government is looking for sources of cash.

Note to new analysts: This kind of government action is always intended to confiscate wealth. In 1978 Vietnam ordered that no private citizens could possess gold, as a measure to confiscate the holdings of Chinese Vietnamese. Overseas Chinese, among others, are well known for holding gold in reserve precisely to guard against government manipulation of paper currency. The Vietnamese not only confiscated their wealth, but forced the Chinese Vietnamese to leave the country.

Analysts should watch for a backlash against the government over this. Koreans tend to be volatile, even in the stodgy, stoic North.

India: For the record. The Indian Navy will add an additional 40 warships, 60 aircraft and 60 helicopters over the next ten years, Press Trust of India reported 2 December, citing a statement from Chief of Naval Staff Admiral Nirmal Verma. The expansion will include destroyers, frigates, fast attack craft and interceptor boats, submarines and fleet tankers, and 34 ships will be built in domestic shipyards, with six built in foreign shipyards. Verma said India is adding the ships and aircraft to protect its maritime interests in the Indian Ocean and counter other naval powers.

This announcement implies a strategic decision to make obvious to all that India is the dominant naval power in the Indian Ocean, with all that such a decision encompasses.

Pakistan: Security. At least two people were killed and four injured in a suicide attack close to the naval headquarters in Islamabad, Pakistan's ARY News reported 2 December. According to various sources, a suicide bomber detonated when naval guards stopped him at the main gate.

This appears to be another in the series of attacks that retaliate for the Army offensive in South Waziristan.

Karachi Mayor Mustafa Kamal said 2 December in an interview that Taliban militants are financing their operations through kidnapping and drug trafficking in Karachi, Reuters reported. Kamal said militants are kidnapping people in Karachi and that the ransom money is being taken to Waziristan, and that the largest portion of the Taliban's revenue is earned through its activities in Karachi.

Multiple reports from McClatchy news investigators in Karachi have been relating events and items that bear out the Mayor's story. Some parts of Karachi are completely under Pashtun control, including both Afghan and Pakistani Pashtuns. The Karachi port operations finance fundamentalist Islamic terrorism along with more legitimate business interests.

Reactions to the President's speech:

Pakistan-Afghanistan: Sirajuddin Haqqani, a Pakistan-based Afghan Taliban clan leader, said the coming surge of troops into Afghanistan will not prevent an eventual Western defeat, DPA reported 2 December. Haqqani, son of former mujahideen commander Jalaluddin Haqqani, also told Geo television that the United States was sending secret messages to the Taliban to request talks.

Afghanistan Taliban: "Many more troops the enemy sends against our Afghan mujahedin, they are committed to increasing the number of mujahedin and strengthen their resistance," the Taliban said in a statement e-mailed to media.

Around the world: In Europe the reaction to the speech was roundly favorable. All the Scandinavian states plus Poland, Macedonia, South Korea supported the US President. France and Germany were more reserved.

Even Russia appears supportive, especially in anticipation of increased American use of Russian rails and airspace for supplying the reinforcements. "The measures relative to the new American strategy in Afghanistan and Pakistan set out by US President Barack Obama are all welcomed positively in Moscow," a Foreign Ministry statement said.

The response from China that Xinhua published 3 December is that the new US strategy faces hurdles. Pakistan has been supportive but India has been skeptical.

Iran-UK: Iran's Siri naval guard command announced that the five detained Britons were released, Fars news agency reported today. The naval guard command said the passengers of the yacht entered Iranian waters in the Persian Gulf by "mistake." Investigations and inquiry into the five British yachtsmen's case established that their illegal entrance was accidental. The decision was made to release the detainees.

The Iranians have used this incident to establish a baseline of fairness in their legal investigation procedures. That would seem to be an ominous portent for the three American backpackers.

Saudi Arabia: Update. A Saudi naval force official said two patrol ships joined the battle against infiltrators, combing an area of 200 nautical miles on the Red Sea, the Saudi Gazette reported. The two ships, Hitain and Badr, started cruising the territorial waters to cut off the supply of food and arms to infiltrators. More ships from the Western Fleet are expected to support ships already cruising in the Red Sea, Gulf of Aden and the Arabian Sea. The official said the Saudi navy is in full control of its territorial waters.

Lebanon: The Cabinet voted today to approve a policy statement allowing Hezbollah the right to use arms against Israel, Agence France-Presse reported, citing a statement from Lebanese Information Minister Tarek Mitri.

Mitri said the policy statement will be made public on 7 December and that the final draft included language to permit "Lebanon, its government, its people, its army and its resistance" to liberate all Lebanese territory, with "resistance" being the commonly used term in Lebanon to refer to Hezbollah.

This policy purports to legalize the military operations of an autonomous non-state entity within the Lebanese state. It is a significant measure of the failure of western policies to strengthen the pro-western factions in the Beirut government. This is a significant advantage for Iran, Hezbollah's benefactor because it legalizes support for the "resistance." In a future Israeli war in Lebanon, Hezbollah is now part of the Lebanese national forces. In other words, western military arms aid for the Lebanese Army apparently could be transferred to the "resistance."

Honduras: Update. The Honduran Congress decisively rejected the restitution of deposed President Mel Zelaya in a vote of 62 to 8, after six hours of debate on 2 December. Only 70 of the 128 legislators cast ballots in the evening vote.

The Congress began on Wednesday to debate whether or not to reinstate Zelaya but the powerful National Party announced its support for the 28 June decree that removed Zelaya, thereby virtually quashing any chance of his return to power.

"We declare ourselves in favor of the ratification of Decree 141/2009 approved on June 28," said party chief Rodolfo Irias before the full Congress, and the statement essentially closed the door on any reinstatement of Zelaya because the votes of the 55 National Party lawmakers were necessary to return him to power.

"This position is unanimous, removed from any opportunism," added Irias, the head of the party of Porfirio Lobo, who won the presidential election last Sunday, a balloting result that was rejected by the majority of the international community with the argument that it came about amid a rupture of the country's constitutional order.

The calculations and permutations of possible outcomes were made pointless by the lopsided vote. Zelaya supporters in Congress failed to show up, despite the fact that they were the majority party. The defeat in Congress did not prevent Zelaya from broadcasting his vitriole from the Brazilian Embassy, which probably ought to consider packing up and leaving Tegucigalpa. Sic transit gloria Zelayae.

Still, it is not clear how many popular and Congressional votes it will take to convince outsiders that the Hondurans rejected Zelaya and his party. This is a study in democracy.

End of NightWatch for 2 December.

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