Bahrain MPs Plump for Snapping Ties with Israel

Despite strong opposition from the government, the Bahraini lawmakers have passed a bill to totally disconnect with Israel which includes travel and trade. The bill needs clearance by the consultative council, a 40-member body appointed by the king to get implemented.

The AFP has reported that the draft has given nod to impose prison sentences ranging from three to seven years and monetary penalty of about $27,000 to anyone who deals with Israel. The proposed new law bans all form of relations with Israel or its people at all levels.

Besides, the businessmen will lose their licenses for a period of 10 years if they are caught for trade exchanges with Israel. Any Bahraini travelling to or through Israel will also have to face prosecution under the new bill if implemented. It even forbids the establishment of diplomatic or consular representation between the two countries.

Many officials felt that such a law was not needed since the Bahrainis had vowed solidarity with the Palestinian people to clinch peace deal with Israel. The ban is seen as an obvious demonstration of discontent with Israel and its allies for continuous breach in peace process of the region.

The Deputy Foreign Secretary Hamad al-Amer said there was no need for the law as ‘Bahrain opposes any normalization with Israel before Palestinians regain their rights’. Currently, Egypt, Jordan and Mauritania are the only Arab League states with formal ties with Israel.

The bill is unlikely to be shaped into law as the upper house which has to give the final clearance is against such legislation. Notwithstanding, Nasser al-Fadhallah, a conservative lawmaker described that it would be an embarrassment for the government if it postponed or blocked the bill as it would resist the will of the Bahraini people.

The predominantly Shiite Persian Gulf state has a very small Jewish population, and Houda Ezra Ebrahim Nonoo, a woman of Jewish origin is the country’s current ambassador to the US and Canada. In 2005, Bahrain closed its office in compliance with the Arab League-boycott of Israeli goods, as demanded by the FTA with the US.

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India Plans to Boost Its Industry through New Defence Policy

In an apparent attempt to engage domestic players into its main stream of defence production, India has released the new Defence Procurement Procedures (DPP) that would enable the Indian firms to make an entry through ‘Buy and Make’ policy. It also makes India a potential defence market for joint ventures (JV) which would ultimately help foreign companies to reduce cost of production as India is famed for highly skilled cheap workforce.

The new procedure, to be effective from November 01, 2009 will allow Indian industries with necessary credentials to absorb technology and undertake indigenous manufacture under a new category ‘Buy and Make’. It will be similar to the existing ‘Make Procedure’ clause with a vital difference that the production and development by Indian industry will be through transfer of technology but not by Research and Development.

However, under the present procedure, the issuance of Request for Proposal (RfP) is only to overseas companies but the new one is extended to domestic firms too. While providing RfP to Indian firms it will allow the domestic players to directly participate in the defence manufacturing process of the country.

According to a Ministry of Defence (MOD) of India release, the Defence Minister AK Antony said the move was primarily aimed at encouraging pro-active participation by the Indian industry who could establish JV/Production arrangements with any foreign manufacturer. Through this procedure the MOD aims to indigenize its defence needs while having plans to spend $100bn as defence outlay in the next 10 years.

The declaration by the defence minister gave emphasis to matters including the 15-year armed forces acquisition plan to be made public through Request for Information on its official website in all such cases. Antony said the twin objectives of DPP 2009 intend at promoting and facilitating wide participation of defence Industry, while enabling transparency and integrity in all acquisitions.

Antony expressed hope that these changes would bring in greater degree of probity in the procedure, and also encourage domestic defence industry to develop. He asked defence personnel to keep an eye on the ‘quality’ with the ‘end users’ in mind, and to allow widest range of competition to ensure value for money. He also urged them to guarantee the completion of the whole cycle to be within a stipulated time frame to avoid undue delays, often experienced.

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Plans of Asia-Pacific Integration through Single Currency

Asian leaders have once again brought up the idea of common currency at the 4th East Asia Summit (EAS) which opened on Sunday, where ASEAN members along with others including China, Japan, South Korea, India, Australia, and New Zealand met to discuss about regional cooperation particularly on trade and climate. Even while it was conceived three years ago, India had opined it could not be achieved overnight yet would be a reality when co-operation among Asian nations gets much more plausible.

However, the Australian premier Kevin Rudd’s call for a broader Asia-Pacific region that includes the US was a dampener to the proposal of single currency as the US cannot approve another party spoiler to its currency besides the euro. The US always maintained and expressed that it desired to be part of the bloc which would become the largest group above the EU especially since the Asian economies are tipped as economic recovery agents by the WTO and other financial institutions.

A new EU-styled common currency community which likely to include Australia and New Zealand is an ambitious project though the bloc face far more problems than the EU in respect to border issues among members, political instability, human rights violations and so on. The ASEAN bloc is already committed in establishing a single market and manufacturing base by 2015, but Japan and China are keen to increase the size of the market to include the EAS countries including Australia and New Zealand.

Japan’s new Prime Minister, Yukio Hatoyama, has reportedly initiated the call for the single currency, which experts felt would change the global balance of power, if it ever happened. Hatoyama’s proposal immediately received support from China, which said it was ready for discussions.

On the contrary, the New Zealand Prime Minister John Key deflected the idea by saying currency union was normally the last step for any community of countries, and a lot of progress had to be made on regulation and trade barriers before moving on to currency union. However, he admitted there was no question about a growing appetite for a broader consensus on this issue, and his country was committed on the progress of a pan-Asia free-trade area.

Kavi Chongkittavorn, former assistant to the ASEAN secretary-general, said the group was divided along “ideological and generational lines” that had left it polarized on issues like human rights, political intervention and territorial disputes. The Thai Prime Minister Abhisit Vejjajiva, the host and current chair of the ASEAN presidency, urged ASEAN countries to get closer to become more influential in the international community.

The resurfacing of the need for a common trading unit indicates that the countries have realized the need to initiate a feasibility study on this matter. Three years later, thus the summit clears the air on working on a plan to evolve a common currency unit.

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Honduran Economy Checkmated by Political Impasse

Since showing steady growth at 7 percent in the past few years, one of the most successful growths in the Latin America, Honduras is divided today between ousted President Manuel Zelaya and the interim government to push the country’s economy into deep crisis. The June 28 coup which expelled Zelaya regime has plunged Honduras into a political quandary besides deepening long-standing economic problems in one of the South America’s poorest countries.

The political instability of the country has already reflected on its exports by showing drastic decline post coup d’état. Mauricio Diaz Burdett, the co-ordinator of an NGO focuses on economic policy, poverty alleviation and corruption eradication, projected that the Honduran economy would shrink by 4.5 percent in 2009, while exports would diminish by $1bn – roughly a 15 percent drop from previous year. According to World Bank, Honduras is the third poorest country in the region behind Haiti and Nicaragua.

The country witnessed a huge slide in tourist traffic at major tourist destinations including Copan Ruins Archaeological Site, the famous Mayan site and the diving hot spots off the Bay Islands. In light of the crisis, the Copan Ruins Chamber of Commerce, Industry and Tourism has published under ‘Important Information’ in its official website that “All tourist services are working normally. And the large cities curfews are NOT affecting the Municipality (county) of Copan”.

Honduras, a predominant catholic state largely depends on its tourism industry, but the repeated listing it as unsafe through advisories by its potential countries of Honduran tourists have seriously impacted the industry as well as its subsidiaries. A local priest, Father Daniel Correa told Catholic News Service that the living standards had improved over the past decade due to increased tourism that provided employment in one of Honduras’ most impoverished regions. However, he added that the current lack of visitors was creating economic hardships for many of his parishioners.

The Tegucigalpa-based Chamber of Commerce and Industry estimated that more than 100,000 jobs were lost nationwide from mid-July to mid-October. An editorial by the Tegucigalpa newspaper Diario Tiempo termed the situation “worse than Mitch,” a reference to the 1998 hurricane that stormed through Central America which Honduras has yet to fully recover.

After the coup, for the past 4 months businesses suffered huge losses particularly due to curfews being clamped as protest erupted often in support and against the ousted leader. Analysts say the forthcoming elections in November are expected to bring political stability provided neutral observers from the international community are involved in the hustings to ensure free and fair elections.

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EU Releases Funds to ASEAN in a Bid to Fight Piracy

The European Commission (EC), the executive branch of the EU has provided $6.7mn to the Association of South-East Asian Nations (ASEAN) to combat the threat of intellectual property (IP) violations in the region. The EU sees the lack of effective mechanism to counter intellectual piracy among 10 member ASEAN states as a major impediment to weld a stronger economic relation in the form of an FTA with the region.

The EC has spent $7.5mn on two previous projects to strengthen the intellectual property rights in the ASEAN – a region notorious for rampant copying of DVDs, CDs, software and brand-name goods from Gucci bags to Rolex watches. The third phase of the project, called EC-ASEAN Intellectual Rights Project, or ECAP III, will focus on five key aspects of development such as – capacity building activities, training of enforcement agencies, support in drafting the Geographical Indication Laws, promotion of IP education and awareness building in the region.

The David Lipman, the EU Ambassador and head of the EC delegation to Thailand opined the union did not have any specific figures on IP violations in each ASEAN member state, or for the region as a whole, the fact remained that piracy was rife and evident. He emphasized the adoption of internationally accepted standards was key for the ASEAN to improve its competitiveness and attractiveness as a hub for investments, and research and development.

The EU-ASEAN FTA negotiations launched in May, 2007 with full implementation of an FTA expected by 2015 is put on hold after serious differences emerged among both sides on various issues. The stalemate on the FTA talks has forced the EU to go in for separate trade agreements between the union and the individual ASEAN members as the region is of strategic importance.

The EU fears the failure in talks between both sides would give leeway to other global competitors including India, China, Japan, the US, South Korea and Australia to exploit the void, as a result, it is determined to go ahead with the separate ASEAN member deals. Though the EU does not have any plans to scrap the broad-based trade deal with the ASEAN, it seems that the individual bilateral deals is likely to give extra leverage to the union in excluding those countries with differences and unacceptable standards. And it is in this regard, the EU is showing keen interest in the upkeep of ASEAN states with a funding for the IP protection projects.

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