Shattered hopes

Shattered hopes

Hopes of a ceasefire between Tun Dr Mahathir Mohamad and the Prime Minister after Sunday’s peace talks lay in tatters after the former prime minister upped the ante.

He accused Datuk Seri Abdullah Ahmad Badawi of turning the country into a police state, called into question his integrity and added more embroidery to past allegations.

This latest attack came barely 24 hours after Dr Mahathir’s two-hour meeting at Seri Perdana and damaged hopes of a reconciliation during the holy month of Ramadan which Malaysians had hoped for.

If anything, it showed that the former prime minister was bent on continuing his campaign against Abdullah and his administration.

His comments yesterday suggest that a ceasefire will only be possible if Abdullah jettisons what he is doing and adopts policies and ideas from Dr Mahathir’s playbook.

"I will continue until there is some change, until I achieve some results," he said.

During his meeting with Abdullah, he spoke on a range of issues — charges of nepotism against the PM, concerns on his management of the economy, the Approved Permits scheme, the fate of Proton and the lack of opportunity for him to speak at Umno functions.

Asked whether he had received a good hearing from the PM, Dr Mahathir said what he knew was that Abdullah had listened.

"He wrote in his notebook. You see, he may have written something else, but as far as I can see, he had something in his notes." Speaking at a Press conference at his home in Seri Kembangan yesterday, Dr Mahathir said his legacy was not being eroded as a result of the controversy.

"It is being chipped away by the actions of this government," he said.

He also dismissed allegations that his attacks were harming Umno, pointing his finger instead at Abdullah.

"It’s not just about divisions within Umno, it’s public support for Umno which is being eroded."

"Umno cannot win elections without public support and today the public is very critical of the present conditions of the present economy, the present system of administration, the involvement of his family members."

He also suggested that Abdullah may be personally corrupt, citing a letter the latter wrote for a relative’s company that obtained contracts in the UN’s oil-for-food programme in Iraq.

At the time, Abdullah was deputy prime minister.

Abdullah has acknowledged having written the letter but said he did not benefit from the deal.

A United Nations inquiry last year cleared him but Dr Mahathir yesterday was bent on revisiting the issue.

Asked if he was accusing Abdullah of corruption, Dr Mahathir said: "As far as I am concerned, it is wrong that a serving deputy prime minister should get his name listed among the companies which did oil-for-food trade with Iraq.

"You should not write letters of recommendation for your own relatives."

Asked on his assessment of Abdullah’s personal integrity and honesty, he shrugged and said: "I don’t know."

He said Abdullah had changed from the time when he was deputy prime minister.

"When he was DPM, his children and son-in-law were not involved.

"He agreed to everything that was decided by the Cabinet and he was a very good deputy.

"But people change when they have power," he said.

When asked whether he was unhappy with Deputy Prime Minister Datuk Seri Najib Razak for not being vocal enough, Dr Mahathir said whatever Najib did would affect his future.

"I did lobby for him, but beyond that I am not prepared to go and do anything more," he said.

He also said he would not rule out the chance of meeting Abdullah again, but added that if it remained a dialogue with just both of them, the effect would be lost.

He claimed the government was preventing him from airing his views and said police have pressured people who invited him to speak at public gatherings.

"The habit of asking police to frighten people should be stopped.

"I consider this a police state. I also consider my civil rights have been taken away."

It remains unclear if Abdullah will respond to this latest outburst from the former prime minister.

But he must have been stung by the ferocity of the attack, coming barely 24 hours after he welcomed him to the official residence.



Dr Mahathir Gives Background Of His Meeting With PM

Former prime minister Tun Dr Mahathir Mohamad, Monday gave the background of his highly-anticipated one-on-one meeting with his successor Datuk Seri Abdullah Ahmad Badawi Sunday, saying a lot of people were unaware or confused about the reasons why he met the prime minister.

Speaking at a press conference at his house in Seri Kembangan, he said mubarak, the association of former elected representatives, approached his son to try to resolve his problems with the government following his spate of criticisms against Abdullah.

He said Mubarak initially came out with several suggestions to resolve his spat with Abdullah, including that he should meet with Umno supreme council and if that could not be done, he could instead meet with the Malay members of the cabinet.

"If that is not possible... then for me to see Pak Lah (the prime minister), I don't know but anyway, Pak Lah agreed to see me," he said, adding that since this was initiated by Mubarak, he would like to see Mubarak first to find out what was it that they were asking him to do.

He said he met five of Mubarak members who said they liked him to see the prime minister who had agreed to the meeting.

"I said if I want to see Pak Lah I want to tell him about what I have been criticising him about. So I told Mubarak how I felt about things. And after Mubarak members listened to me, they felt that I should tell these things directly to Pak Lah," he said.

At yesterday's meeting with Abdullah at the prime minister's official residence Seri Perdana in Putrajaya which was held under a cloak of secrecy, Dr Mahathir said he told the prime minister that he would record their dialogue.

"So I set up the (tape) recorder...and I told him I was so critical about the government. Of course, there are so many things I have said but within one-and-a-half hours, I covered lots of things. After that he explained, of course he interrupted me several times," he said.

Dr Mahathir had told reporters after yesterday's meeting that it was a worthwhile meeting because he got to say things frankly to the prime minister, the way he had criticised him publicly.

The former prime minister's criticisms included charges of nepotism, incompetence and for axing some major projects conceived while he was in power. He said it was not true that the government did not have money to carry out projects, adding that when he decided to step down in 2003, he made sure that the country was stable, with the economy and government's finances in good shape.

"Only after that I decided I would step down. The government now has money, the government has more money that it has ever before," he said.

Dr Mahathir said during his time, the highest profit by Petronas, the national oil corporation, was RM56 billion but this had increased to RM86 billion in the last financial year, bigger than the total collection of corporate tax at around RM60 billion.

At Sunday's meeting, he said Abdullah told him that they had done a survey that as a result of his criticisms, he (Dr Mahathir) had become very unpopular and their differences had only benefited opposition leaders like Datuk Seri Anwar Ibrahim and Datuk Nik Aziz Nik Mat.

"I told him that I don't care whether I'm popular or not, but if anybody does anything that is damaging to the country, and to the Malays in particular, I reserve the right to criticise".

He was asked if he was concerned that his legacy after 22 years as prime minister was being kept away.

"It's not being kept away. It is the action of the government for the past three years.. there has been no move. The economy is not doing well, the people are unable to get jobs, unemployment is still high. Nothing has been done to improve the economy although of course we read very good figures.

"But you see, retail business is not (good), contracts are not easy to come by and plus people have no jobs and a lot of small contractors have folded up. The economy is bad. I know because a lot of Chinese business people are very unhappy. I have told Pak Lah that some of them have said they will not vote for Barisan Nasional at the next election," he said.

Dr Mahathir said he was told that people today preferred to go to China to do business because there were more opportunities there than in Malaysia and that they did not find it easy to do business in Malaysia.

Asked if he felt he had achieved much in his meeting with the prime minister, he said: "I have achieve the objective of telling him in a quite substantial details. Now I have the opportunity to tell him. There is no spinning of what I said". Asked if he wished that he had not stepped down, Dr Mahathir said actually he wished that he had done so in 1998 if it had been possible and in 2002 (when he announced at the Umno General Assembly that he is resigning) but it was Abdullah who told him to stay on for another year.

To this he said today: "This is something I appreciate but this is not the question of what you do or character.. this is not about his character but this is about what is happening".

On his next move after Sunday's meeting with Abdullah, he said: "I've told you that I would continue to criticise and I will go on with my usual way".

Dr Mahathir also said despite his problems with the prime minister, he did not think that it was possible for the opposition to win the election.

"In my assessment, it is not possible for the opposition to win but they might reduce the majority of the government.

On the problems it might pose for Umno, he said: "It is not the internal problem of Umno or unity within Umno. Umno cannot win election without public support and today the public is very critical of the economy, system of administration, involvement of family members. These concern the public. If the public does not support, even if 100 per cent of Umno supports our candidates, they will kill you".

Summing up the meeting where he raised a host of other matters, he said: "There were a few other things he mentioned. I talk for two hours, I decided that the meeting was over. I got up, collected my recorder, said good-bye to him".


After Abdullah-Mahathir meeting, what comes next?

Malaysian Prime Minister Abdullah Badawi had talks with his predecessor, Mahathir Mohamad, in a highly-anticipated face-to-face meeting.

This came after months of bitter criticism leveled against the Abdullah government by Dr Mahathir. He has repeatedly accused his successor of harming Malaysia by undoing many of the key policies he had enacted while he was in power.

The closed-door meeting, which took place on Sunday, was brokered by a group of ex-assemblymen with close ties to both men.

Dr Mahathir said immediately after the meeting, that while it was cordial, he was not satisfied with its outcome. He maintained that he would continue with his criticism if he deemed it necessary.

For an analysis on the implications of the meeting on the future political dynamics in Malaysia, Joel Chua spoke with Dr Chandra Muzaffar, President of the International Movement for a Just World, based in Kuala Lumpur.

CM: If Dr Mahathir raised all those issues that he has been ventilating in the public arena, if these are the issues he had been raised with Abdullah, I don’t see him making changes to the policies that he has been pursuing for the past two or three years, on APs (approval permits), on Proton, on the bridge. He can’t do it for two reasons, because I think there are some very valid reasons for adopting the cause that he has adopted. Like, if you take the case of the bridge, I don’t think one can argue that a half-bridge is a solution to the impasse that had been reached in negotiations between Malaysia and Singapore. Neither can one argue that some of the modifications made to the policies on Proton were not justified; I think they were justified because Proton was not doing well. And if you look at it from a second point of view, (Badawi) is prime minister and he’s in charge. He can’t be seen doing things at the behest of an individual, albeit the former prime minister. He can’t now say, look I’m changing these things because I’ve met with the former prime minister; it can’t be done because that would undermine his credibility and it would call into question the very legitimacy of governance. So I think Abdullah will stick to the policies he has pursued so far; he may make some cosmetic changes here and there perhaps, but it won’t simply be because Dr Mahathir has had this meeting with him.

So what was the real significance of this meeting then, if in your opinion, Mr Badawi isn’t going to change the policies he’s made and Dr Mahathir is going to continue to criticize. Was there anything positive at all that came out of this meeting?

CM: Dr Mahathir had a chance to convey in person his views to Abdullah and it was cordial, according to Dr Mahathir. I think that would have some positive impact on the UMNO rank and file, on Malaysian society. After this, if Mahathir continues to raise the same issues or if he continues to be as sarcastic as he’s been over the last few months, if this is the approach that he adopts, I think his standing would suffer much more in the future, if he continues to do this.

Now this meeting was actually initiated by "Mubarak", which is an association of former elected representatives, now how significant is the role of Mubarak?

CM: As a group, I don't think Mubarak has had much of a public profile. I don't think one should see this as a pressure group in a political sense. It's a group that played a role simply because individuals within the group are known to both Mahathir and Abdullah and they were able to get both sides to agree to this meeting. But I wouldn't give too much emphasis to the group, per se.

Finally, what steps do you think the Badawi government should take now?

CM: Well I think they should keep their channels of communication with Mahathir open. Abdullah has indicated in this meeting with Dr Mahathir, according to the media, that Dr Mahathir was always welcome to come back to see him. And I hope Abdullah will stick to that. In other words, allow Dr Mahathir to continue with communication. But beyond that, I don’t think one can expect or should expect, the Abdullah administration to do anything else. Abdullah is in charge of the country now, he has allowed some space for the articulation of issues that concern people; he’s created much more latitude in this respect than his predecessor. And one hopes that will continue and Abdullah will continue to the best interest of the people of Malaysia.

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Only UMNO can threaten UMNO

Ooi Kee Beng

The escalating conflict between former premier Tun Dr Mahathir Mohamed and his chosen successor Datuk Seri Abdullah Badawi is the latest of the crises that tend to emerge among leading members of Malaysia's ruling party, UMNO.

This recurrence begs questions about the party's brand of stability, and amounts to a challenge that may become as destructive as the conflict in 1987 that literally split the party, as well as that in 1998 between Tun Dr Mahathir and his deputy Datuk Anwar Ibrahim.

Paradoxically, this history of conflicts within UMNO reveals better than anything else its dominance over Malaysian politics. The party has succeeded to such an extent that opposition, and democracy, has to be intra-Malay phenomena to be effective. Only UMNO leaders can effectively threaten UMNO, and only UMNO leaders can effectively criticize UMNO.

The rebuilding of Malaysia after the racial riots of 1969 was, in the eyes of the rebuilders such as Tun Abdul Razak Hussein and Tun Dr Ismail Abdul Rahman, a thorough attempt to redress socioeconomic conditions inherited from the colonial economy. This effort also involved the construction of a new consociation to replace the Alliance.

Throughout the decade preceding the fateful 1969 general elections, the administration had its hands full dealing with security issues as exemplified by Indonesian aggression and Communist insurgency, as well as the painful failed attempt to incorporate Singapore into the Federation of Malaysia. Political opposition between 1957 and 1969 was therefore dynamic, and fatefully not burdened by inter-ethnic sensibilities. Then came 1969.

Two major consequences as far as "political oppositionism" is concerned developed out of the riots.

The first was that the government was determined that such an episode should not be repeated. While this "never again" mentality led to a thorough socioeconomic analysis of the causes, it did not lead to measures that were as thoroughly thought through. Quantitative goals were adopted, and the tools chosen were meant to be tweaked along the way.

Lines of thought favoring preferential treatment for bumiputras, without a responsive system of checks and balances, meant that racial considerations infiltrated most aspects of socioeconomic and political life.

The second was that the earlier understanding between Alliance members was nullified by UMNO leaders, who were convinced that radical changes in democratic structure had to be carried out. Other parties, which continued to remain "neither alive nor dead" in the words of Tun Dr Ismail, were welcome to participate, but largely in supportive roles.

The Barisan Nasional thus came into being to facilitate UMNO's new ambitions, with all other members, which included erstwhile opposition parties, having inferior positions from the start.

Where the parties that decided to remain in opposition were concerned, the Constitutional (Amendment) Bill passed on 3 March 1971 limited what they were allowed to discuss and debate. These issues concerned citizenship, the national language and the use of other languages, the special position of the Malays, legitimate interests of non-Malays, and the sovereignty of the sultans were forbidden. Some members of the dwindling opposition proclaimed that the newly recalled parliament had, in passing the Bill, effectively "cut its own tongue."

The return to parliamentarianism was hastened by the fact that both Tun Razak and Tun Dr Ismail, the major architects of the rebuilding process, were men suffering from serious ailments. Tun Razak had leukemia and was living on borrowed time, while Tun Dr Ismail had a leaky heart valve, which could fell him at any moment. These men were therefore desperately cutting corners in bringing emergency rule to an end before death caught up with them. Democracy would most probably have remained dead should they suddenly have passed away.

The laws passed, the quantitative goals adopted, the reforming of UMNO and the ruling consociation, as well as the muffling of political debate, were all informed by their secret haste to dismantle their own dictatorship.

A permanent result of these measures was that UMNOÕs dominance became unchallengeable.

Although these two men managed to nail the new political infrastructure into place before they died, their premature passing, Tun Dr Ismail in August 1973 and Tun Razak in January 1976, nevertheless allowed younger leaders with other goals and other values to reinterpret their original plans.

The rise of UMNO from the ashes of May 13 was so powerful that strong opposition could not develop outside of it, but only from within. Malaysian democracy since 1969 has therefore been defined by this lopsided power equation. UMNO has reigned supreme, managing even in generating its own opposition.

Under Tun Dr Mahathir, Islam became increasingly important not only in flavoring the country's development, but also in defining the opposition.

In order to increase Malay domination of Malaysian politics, Tun Dr Mahathir sought to make UMNO's significant other, in other words, Malaysia's significant opposition, Malay. The rise of Islam in Malaysian politics and of the Islamist Parti Islam SeMalaysia (PAS) as the opposition during the Mahathir era stems from this. PAS was treated with more respect that its electoral standing warranted.

This focus on Islam allied Malaysia discursively to the Muslim world and offered an anti-Western position that suited Tun Dr Mahathir's worldview well. The Muslimness of the Malays started becoming more important than their Malayness. This further diminished the space available to both non-Malay government allies as well as opposition parties.

Playing with Islamism was also playing with fire, as shown in the 1999 elections when PAS managed to capitalize on the break-up between UMNO's two top leaders. The gains PAS made on that occasion quickly withered away. However, that break-up became a non-issue after Tun Dr Mahathir resigned in 2003. PAS lost badly in the 2004 general elections, and UMNO's dominance became obvious again.

Tellingly, for UMNO members, and especially for UMNO's president, who is also Malaysia's Prime Minister, tension constantly exists between their being Malay Muslims and being Malaysians. No doubt the reality of one overlaps that of the other, but describes it only partially and unsatisfactorily.

The clash of the personalities and the policies of Tun Dr Mahathir and Datuk Seri Abdullah showcases the internal tension and hubris that UMNO, by virtue of its hegemonic power, must always suffer from. More starkly, it reminds us of the impotence of opposition politics in Malaysia.

Ooi Kee Beng is a Fellow at the Institute of Southeast Asian Studies.


Much Ado about Numbers: Corporate Equity in Malaysia

Phar Kim Beng

It began as an earnest academic study of the bumiputera equity in the Malaysian economy by Dr Lim Teik Ghee, a former World Bank social scientist.

Among others, the research sought to inquire if the Malaysian government should continue to redistribute wealth along ethnic lines, a practice that began in 1971 under the then National Economic Policy, which has since been discontinued in 1990, although its central tenets are still retained in Malaysia's industrialisation and growth programs.

The participation of Dr Terence Gomez, a research coordinator at United Nations Research Institute for Social Development (UNRISD) in Geneva, amongst other Malaysian scholars, lent added weight to the report too.

It was also part of a bigger research project which included findings on education, the civil service, low-income communities and the Penan tribe. Indeed, the goal was to help the country address issues that have otherwise been sidelined or put on the backburner for years.

Given its scholarly nature, the report, put together by the Asian Strategy and Leadership Institute (ASLI), was even submitted to the Prime Minister, cabinet ministers and other government leaders in February 2006. None of them were averse to the findings then.

But on 23 September 2006 when the study estimated that 70 percent ownership of government-linked companies (GLCs) could be attributed to bumiputeras, and was highlighted in Malaysiakini, a web portal, the report took on a different political complexion altogether.

Senior politicians like Tan Sri Muyiddin Hussein of the United Malays Nationalist Organization (UMNO) instantly scorned the report. He called it "rubbish".

UMNO vice-president and Malacca Chief Minister Mohammad Ali Rustam said ASLI should correct the figures as they were "inaccurate".

Khairy Jamaluddin, the deputy head of UMNO Youth, also averred to the "damage done" to the racial sentiments in the country as a result of this report.

But more importantly, what fermented the outcry was the numbers and methodology of calculations used to reach that conclusions drawn by the ASLI researchers.

The study, entitled "Corporate Equity Distribution: Past Trends and Future Policy" - put bumiputera corporate equity ownership at around 45 percent.

This figure is more than double the official figure of 18.9 percent too. Predictably, it contradicted the report of the Ninth Malaysian Plan, and in turn, the analysis of the influential Economic Planning Unit (EPU).

Thus, what began as a supplement to the Ninth Malaysian plan was soon on a collision course with the Malaysian Prime Minister, and by extension UMNO, which took strong exception to the report.

Since the numbers were not consistent with the government's own statistics, the research was perceived as a "challenge" to the status quo.

On 5 October 2006, Prime Minister Abdullah Badawi eventually waded into the topic to challenge the integrity of the investigation too.

"ASLI adopted an approach based on a survey involving only 1000 companies listed on Bursa Malaysia, unlike the Economic Planning Unit (EPU) which involved 600,000 Malaysian companies in its survey and used government documents", argued Badawi. Five days later, Lim's fate was sealed. Asked by ASLI to retract the study, to which Lim refused, he resigned from his position as the director of the Center for Public Policy Studies in ASLI instead.

Notwithstanding the resignation, the issue has created a firestorm of debate which continues to reverberate.

Although the ASLI report by Lim's admission was based on the figures of a UBS Study in 2005, the heavy handed manner with which Lim was criticized, brought to the fore the issue of tolerance and openness promised by the Badawi administration.

Separately, although the notion that bumiputera equity has exceeded 45 % came only "in the conclusion" of the research, according to Dr Terence Gomez, it was this figure that was heavily criticized.

While the UBS Study in 2005 was not attacked, Lim's research and joint analysis with other Malaysian scholars were singled out for public rebuke. Two Malay professors even openly questioned the racial "motivation" behind the report.

The study's inclusion of Government Linked Companies (GLCs) as bumiputera companies immediately exposed it to methodological problems and scrutiny.

Economist Dr Zainal Aznam Yusof who was formerly with ASLI, claimed that Lim's study was inaccurate because it "considered GLCs as predominantly bumiputera, while the government removed GLCs from its figures."

Indeed, Prime Minister Abdullah Badawi also clarified that "the revenues reaped by all GLCs will be handed over to the government to be saved in funds for use by the people and the country. If they think that GLCs are bumiputera companies, that is not right at all."

While critics of the ASLI study could find fault with the statistical methodology, the government has not been too forthcoming about how it tabulates its own figures. For instance, very little has been said by the EPU with regard to how "600,000 companies" became the benchmark of the government study.

In Malaysia , the Registry of Companies does keep complete records of all legal business ventures. But they do not seem to have the latest information on companies. Indeed, some are already dormant or on the verge of receivership. Such troubling questions raises doubts about how the government arrived at its own figure of 18.9 % to begin with.

In fact, senior members of UMNO often agreed that the figure has not risen by much over the last decade, which in turn begs the question if better economic intervention programs, reminiscent of those in place currently, are actually working to alleviate Malay poverty.

In the larger schema of things, with this distributive debate now stillborn, any new and creative solution to address issues of economic imbalance and affirmative action appear to have been permanently shelved, at least under the current administration.

If any sliver of hope remains, the government would do well to explain how it tabulates its figures viz. corporate equity distributorship, if nothing, at least to engender the culture of accountability and transparency it is desperately seeking to cultivate.

Phar Kim Beng is a consultant to Waseda University in Japan on Southeast Asian matters.

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China's interests go well beyond the nuclear issue

The potential of growing cross-border trade with North Korea will make it hard for Hu Jintao to back effective sanctions

Christopher Hughes


During Condoleezza Rice's recent tour of north-east Asia to drum up support for the raft of sanctions that the UN security council has imposed on North Korea, China appeared to be both the weakest link but also the country with most leverage over Pyongyang. Yet relatively little is known about its approach to the nuclear crisis, other than that it has spent several years resisting Washington's calls for stronger actions. Beneath this reluctance, however, lies a long-term strategy of integration across the China-North Korea border that is designed to replicate China's own transformation into a more open and stable society and serve its own interests by promoting economic regeneration of the north-eastern provinces.

While Beijing shares Washington's goal of denuclearising North Korea, historical links and geographical proximity mean its interests go well beyond the nuclear issue. This is most obvious for the region of China that borders North Korea. Under the planned economy this was a centre of heavy industry, but it experienced dramatic decline after Deng Xiaoping began the process of economic reform in the late 1970s. While coastal areas in the south boomed, frequent strikes and demonstrations by workers made this region a political flashpoint for a regime that still claims to protect the interests of the working class.

When Hu Jintao became China's leader in 2002 with a mission to redress regional disparities, the prospect of creating a new market and points of access to the ocean for Chinese goods by developing North Korea's economy and infrastructure engendered a different kind of attitude on the part of the Chinese from the kind of logic offered by the nuclear crisis. The fact that the North Korean leader Kim Jong-il had become a regular visitor to China and launched a package of Chinese-style market-oriented economic reforms that very same year was just as significant as Pyongyang's nuclear standoff with Washington.

The economic arguments are indeed attractive. Both sides of the border boast rich mineral resources, so modernisation of large mining enterprises should provide a good foundation for development. There is a pressing need to cooperate on environmental issues, as China has begun to move towards a greener economics while North Korea devastates its land through intensive farming. Having introduced 11 years of compulsory schooling in 1975 and paying great attention to harnessing education to technology development, North Korea has a workforce that is lower paid and better trained than that of the neighbouring Chinese provinces. All that China has to do is divert some of North Korea's hi-tech skills to the civilian sector by applying the management techniques it has developed during its own transition to a market-oriented economy.

The existing curious combination of market mechanisms and sanctions has already given a degree of reality to this vision. Working with South Korean partners, North Korea has become a serious player in the computer games industry, largely because developing a hardware industry was impossible under material shortages caused by sanctions and economic collapse in the 1990s. Isolation has also catalysed cross-border transactions as Chinese entrepreneurs have rushed in to meet the demand for goods that cannot be satisfied by North Korea's domestic industry. In 2004 cross-border trade amounted to $1.4bn, and it is growing at nearly 40% a year, allowing Chinese advocates of engagement to drum up optimism by drawing comparisons with the early stage of their own country's remarkable climb to economic success. They also point out that 80% of the products in North Korea's markets are already of Chinese origin, fetching a higher price than they would at home. A favourable tax regime for firms forming joint enterprises with North Korean partners also makes the costs of doing business lower than in China.

The presence this gives to China can be seen by the fact that the yuan is permitted for use in a large number of shops in Pyongyang and is widely used in the Chinese-style special economic zones in North Korea. While North Korea is not normally seen as a source of foreign investment, Chinese observers point out that the majority of the population have overseas family links and are stashing away remittances from relatives in Japan, South Korea and China until the opportunities for investment are ripe.

This growing involvement in North Korea's reform programme gives China an unrivalled degree of influence at the international level. When Pyongyang announced its withdrawal from the NPT in January 2003, China brought it back to the six-party talks and brokered a new deal with the US. The reward was a three-day visit by Hu Jintao in October 2005 during which he proposed a number of ways China could help upgrade the country's infrastructure. Yet China's strategy is supposed to have a political impact that goes further than this. Although Beijing publicly maintains the principle of non-intervention in the domestic affairs of other states, advocates of engagement openly expect North Korean society to develop along Chinese lines as its population gets used to a market economy and increasing exposure to the outside world. In other words, North Korea is supposed to be a willing partner in an engagement policy that mirrors what the US used to advocate for the liberalisation of China itself.

Just as the US has found with China, however, the government that pushes engagement can also end up being constrained. North Korea's nuclear test poses a direct challenge to Hu Jintao, who has identified himself so closely with this strategy, but given the complexity, depth and potential of integration across the increasingly porous China-North Korea border, it is doubtful whether effective sanctions can be imposed without big costs. Yet Rice's scepticism towards reports that Kim has sent Hu an apology and assurances that he has no plans for a second test shows that it will take more than rumours or contrition to alleviate Washington's growing impatience. Meanwhile, the clock ticks away in the security council, where the implementation of measures imposed on North Korea under resolution 1718 will be assessed in the middle of November. As Hu weighs the competing demands of Washington and Pyongyang, though, it may just be the interests of China's north-eastern rust belt that will decide how far he can follow Washington through the measures allowed under chapter 7 of the UN charter.

· Christopher Hughes is a reader in international relations at the London School of Economics



Civil society in danger: 77 NGOs suspended in Russia

CIVICUS expressed serious concern that 77 foreign non-governmental organisations (NGOs) operating in Russia have been forced to suspend their activities, after the government rejected their registration applications yesterday.



“We are deeply concerned by the government’s refusal to register these NGOs,” said CIVICUS Secretary General, Kumi Naidoo, who chaired a meeting of 14 international NGOs with President Vladimir Putin prior to the G8 Summit. “This clearly contradicts President Putin’s guarantee to civil society that the new NGO law would not be used to silence critical NGOs. This repression of civil society voices should stop – and it should stop now.”



Under a controversial NGO law adopted earlier this year, criticised by CIVICUS and other local and international groups, all foreign NGOs in Russia were supposed to re-register by last Wednesday. According to reports, 185 organisations submitted registration applications to the Justice Ministry's Federal Registration Service, but only 108 were granted registration. Seventy-seven reportedly remain under review, including many critical of the government such as Amnesty International and Human Rights Watch.



Government officials reportedly claim those NGOs which were denied registration failed to submit their applications on time, or completed them incorrectly. Many international and local NGOs, however, fear that the new NGO law is being used to crack down on critics.



In a statement issued earlier this year, CIVICUS noted with concern that the new NGO law gives the authorities excessive power to deny registration to those groups whose missions threaten the “sovereignty, political independence, territorial integrity, national unity, unique character, cultural heritage and national interests” of Russia. “These vague provisions,” wrote CIVICUS, “are left dangerously open to the discretion of individual officials and, in addition, do not meet standards set out by the European Convention on Human Rights” regarding the right to associate.



The rejection of NGO registrations follows in the wake of the recent disturbing closure of the Russian-Chechen Friendship Society, a vocal human rights organisation, and the murder of critical journalist Anna Politkovskaya.



“The past couple of weeks in Russia have seen an onslaught of violations of the freedoms of expression and association,” said Naidoo. “We appeal to the Russian government to act decisively to ensure these organisations do not remain in limbo, and are granted registration without further delay. As a regional leader, Russia must set the example of respect for civil society’s freedoms."


Tibetan Refugees Arrive in India, Describe Chinese Attack

Forty one refugees have survived a three-week trek from Tibet to India, despite being attacked by Chinese troops near the Nepal border.

Human rights groups say 75 people originally attempted to escape across the Himalayan Mountains from Tibet to Nepal. The refugees told reporters in New Delhi Monday they do not know what happened to the 32 others, including at least nine children who were arrested by Chinese troops.

The refugees said Chinese troops attacked them September 30, killing at least one person. This incident, which was caught on videotape by a Romanian cameraman, prompted the United States to lodge a formal protest with China. The European Union has urged China to investigate the incident.

Chinese officials say troops shot in self-defense after the refugees attacked the soldiers. However, the International Campaign for Tibet organization says a videotape shows the Tibetans had their backs to the soldiers, were unarmed, and offered no resistance.

The video shows a distant line of figures walking through the snow on a high mountain pass when a gunshot is heard and one of them falls to the ground. Most of the figures in the video are too far from the camera to identify.

Mountain climbers and other witnesses say they saw Chinese forces shoot and kill at least one Tibetan on the pass.

Tibet's exiled spiritual leader, the Dalai Lama, later said Tibetans have been experiencing such cases for more than 50 years.

Hundreds of Tibetans cross the Himalayas from their Chinese-ruled territory to Nepal every year. Some try to make the trip to reach the northern Indian town of Dharamsala, where the Dalai Lama lives.


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