Tuesday, January 25, 2011

Today's HeadLines

Conciliatory note marks NA session

SLAMABAD: An apparent inter-party warmth overcame some opposition pinpricks as the National Assembly began a second session this winter on Monday with Prime Minister Yousuf Raza Gilani keeping up a conciliatory mode that helped him wriggle out of a political crisis earlier this month.

Responding to some points raised by two opposition figures at the start of the session after a 17-day recess, the prime minister promised an explanation to the house by his interior minister about a confusing law and order situation in Karachi and put on hold a costly project to build more parliamentary lodges in Islamabad until a fresh decision by a committee of the house.

Both the issues were raised by opposition leader Chaudhry Nisar Ali Khan, who also sought explanations about the nature and achievements of President Asif Ali Zardari’s recent visit to the United States and about media reports of the name of the minister of state for ports and shipping, Nabil Ahmed Gabol, being put on the exit control list (ECL) after he had sent his resignation from office.

Foreign Minister Shah Mehmood Qureshi told the house that the president had undertaken the US visit in his “private capacity” to attend a memorial service for Richard Halbrooke, the US special representative for Pakistan and Afghanistan, though Mr Zardari used the opportunity to promote national causes through his interactions with US President Barack Obama and other officials.

The prime minister said he had checked with the interior secretary last week after media reports about Mr Gabol’s name being put on the ECL — to bar his travel abroad — and was told that no such step had been taken.

There was a brief furore in the house when some members of the opposition PML-N refused to hear the foreign minister’s explanation about the president’s visit before knowing what action had been taken against an unidentified bureaucrat whom Mr Gabol had earlier accused of playing a “mischief” in the affair and a PPP member rudely shouted at them.

However, the situation calmed down after Deputy Speaker Faisal Karim Kundi allowed a PML-N member to make a speech before giving the floor to the foreign minister, whose justification for the president’s trip remained unquestioned as Mr Gilani’s PPP-led coalition exuded confidence compared to uncertainty it faced when the house ended its last session on Jan 7 after two of its allies had parted ways to reduce it to a minority government in the 342-seat house.

The 25-seat MQM has since come back to the fold to give the coalition majority, though without rejoining the cabinet, with assurances from the two main opposition parties not to try to unsettle the system, which were repeated in the house on Monday by PML-N’s Chaudhry Nisar and PML-Q’s parliamentary leader Faisal Saleh Hayat even while criticising the government.

The prime minister was thankful for what the opposition offered and assured them that the government would take their views seriously.

The eight-seat JUI-F too did not seem keen to go to the opposition benches after quitting the alliance and the cabinet last month.

Its chief Maulana Fazlur Rehman occupied his front seat on the opposition benches on Monday and, unlike the previous session, none of the party members asked the chair to act on their pending application for the allocation of seats on the opposition benches.

Projects in flood-hit areas shelved

ISLAMABAD: The government has decided not to take up major reconstruction and rehabilitation projects in the flood-hit areas during the current fiscal year because of a financial crunch and negligible fresh aid commitments from the international community.

A Planning Commission official told Dawn on Monday that the entire portfolio of reconstruction and rehabilitation projects costing about $9 billion (Rs765 billion) had been set aside because of shortage of funds.

However, he said, the government had decided to simplify the approval process for such projects to avoid the normal course involving formulation of feasibility studies followed by their technical assessment by the Central Development Working Party and the Executive Committee of the National Economic Council.

“The objective is that these projects may be started without wasting time in case the international community makes available fresh funding.”

Most of the projects relate to public infrastructure and services like roads, bridges, railway tracks, irrigation system, schools, hospitals and power sector installations. Their implementation would take up to four years and require substantial outlays.

Most of the current year`s funding has already been earmarked for strategic projects nearing completion and the Public Sector Development Programme (PSDP) has been restricted to Rs140 billion from the original allocation of Rs280 billion.

The official said the international community, particularly the United States, the World Bank and the Asian Development Bank, had offered to divert funds from existing loan portfolios to reconstruction and rehabilitation activities. However, it had also begun interfering in the implementation process by raising transparency issues.

“This was not acceptable to Finance Minister Dr Abdul Hafeez Shaikh who took a strong position against diversion of international funds from ongoing programmes and warned the international donors against maligning the government and its institutions,” he said.

The minister was of the view that some rehabilitation projects, although at a very small scale, could be made available to the international donors for implementation through community-based organisations under citizens` programmes, the official said. That would have eased the pressure on the government, he said.

The official said that since most of the earlier projects destroyed by the floods had proven benefits because they had been serving the needs of the people and the economy, feasibility studies and concept papers were not necessary for them.

“What we need is to update their construction cost and there are set procedures to extrapolate the amount under the Pakistan Engineering Council`s standards,” he said.

He said institutional lenders like the World Bank had advised the government that its fiscal position would weaken if it had to bear a large part of the rehabilitation and reconstruction cost.

“Estimates of the reconstruction cost range from Rs662 billion (4.5 per cent of GDP) to Rs779 billion (5.3 per cent),” the bank said.

The official said the PSDP did not have room for rationalising and reprioritisation and taking loans for reconstruction would increase fiscal deficit because of a build-up of public debt which would have adverse fiscal and economic implications in future.

The federal government hopes that the provinces will launch some of the important projects from their development allocations over the next two to three years.

A damage and needs assessment led by the World Bank and the ADB had put reconstruction cost of housing, health and education sectors at Rs234 billion; irrigation, transport and communications, water supply and sanitation and energy at Rs300 billion; agriculture, private industries, financial sector and social protection and livelihoods at Rs197 billion; and governance, disaster risk management and environment at Rs25 billion.

Inconsistent policy blamed for lack of investment

ISLAMABAD: First it was just the Balochistan government that was pushing for termination of the contract one of its predecessors had signed with Tethyan Copper and Gold Company (TCC) for Reko Diq. This was followed by a court case and then politicians jumped into the fray.

A group of senators has announced its support for the idea that the mining of gold and copper at Reko Diq be done by Pakistanis instead of TTC.

Such incidents lend credence to the words of people such as this senior diplomat who commented: “The greater hurdle [to foreign investment in Pakistan] is the inconsistent policies of the government.”

He said this as he explained that he would like to encourage better business relations between his country and Pakistan, but could not because of the flip flops in the state`s policies.

His are not merely the words of an outsider. In private conversations, senior government officials and those working for the private sector in the auto industry, energy, mining, manufacturing and oil and gas sectors have expressed the same views. Inconsistent policies are the greater evil.

Abbas Bilgrami, the managing director of the country`s first Liquefied Petroleum Gas (LPG) terminal, said that due to the sudden change in government policies, he was even planning an exit from the scene.

“Policy makers invited us to enter the energy market of the country in 2001; the policy was conducive and we had international investors too,” he said.

“But the LPG pricing formula was changed in Dec 2006 by OGRA and another change in the policy in Jan 2009 resulted in a loss of up to $200 per ton LPG for the importers as it gave leverage to local produced LPG which is cheaper.”

The state of the art LPG terminal at Port Qasim was established by his company at a cost of $30 million in 2004; its current value is around $120 million, but the facility remains under-utilised despite a severe LPG shortage in the country, because importing LPG is not feasible under the current pricing regime.

In a report the Overseas Investors Chambers of Commerce and Industry has highlighted seven factors related to declining investments in the country — five of them are directly or indirectly related with policies and regulations, Thee factors are `Business Environment,` policy and regulation, federal budget, while the law and order and availability of utilities are at fifth and sixth places and the performance of the ministry and regulatory bodies is also part of the list.

Responding to the LPG terminal case, minister for investments, Salim Mandviwala, explained that “Most decisions in the past were taken through the SROs and these can be withdrawn easily.”

He claimed that the present government was bringing regulatory changes and would also present a Specialised Economic Zones Act to the Council of Common Interests.

And then the minister also added that his government did not change policies as had happened in the past.

Yet, under the incumbent government the refining sector has lodged a complaint to the petroleum ministry that the collective loss faced by most of the petroleum refineries in the country exceeds Rs2 billion — in the past few months.

“Gradually the government has been changing the petrol pricing formula since 2008 and we faced a loss of more than Rs2 billion after the one per cent incidentals on petrol have been withdrawn,” said Aftab Husain, Deputy Managing Director, PRL. “While the ECC decision to deregulate petrol , which was linked with withdrawal of one per cent incidental, has not been implemented.”

According to official figures, the refining sector faced a 134 per cent drop in foreign investment in the six months of the current fiscal year over the same period in 2009.

This is why, analysts point out, no major international player has entered the local fuel and electricity scene despite the high demand for fuel and electricity. In fact, some go so far as to say that such figures will get worse in the wake of the state`s flip flops on investments like Reko Diq.


Probe a little deeper and the unpleasant memories of the 90s are said to be keeping them away: “The treatment and persecution faced by the Independent Power Producers (IPPs) after the government change in mid-90s, was a serious blow that continues to scare off investors in the power sector,” said an official of the ministry of water and power.

He added that despite the active interest of the US government in Pakistan`s energy sector, the private sector players in the US were not willing to invest in electricity generation or distribution in Pakistan.

The same has been witnessed in the oil and gas exploration and production sectors, where no new company has entered and the country is constantly suffering from a widening gap between demand and supply of natural gas. reserves.

Most of these people agree that till there is more stability and continuity in policies, foreign investment will not pour in, regardless of how good or bad the security situation is.

And this is why despite a drop in terror attacks in the country in 2010 by 11 per cent against 2009, the foreign private direct investment has declined by 14.5 per cent during July- Dec 2010 compared to the corresponding period in 2009.

If nothing else, these figures prove that the simple relationship that the policymakers like to draw between the poor security situation and the lack of foreign investment has flaws somewhere.

Kazmi`s bank accounts frozen

ISLAMABAD: In a fresh development in the Haj scam, the Federal Investigation Agency (FIA) on Monday froze three foreign bank accounts of former religious affairs minister Hamid Saeed Kazmi in Multan, a senior official of the agency said.

The tracing and freezing of Mr Kazmi`s foreign currency accounts (FCAs) may create further trouble for him as he has already been accused of involvement in the fraud.

The ex-minister had earlier denied that he had any foreign bank account.

However, talking to Dawn, he conceded that he opened an FCA to have transaction in pound sterling with his brother who lives in the UK.

According to sources in the FIA, Mr Kazmi has some 20,000 pounds in one of his bank accounts in Faisal Bank. The exact amount in his other accounts frozen by the FIA could not be ascertained.

The source said since the former minister had denied he held any foreign currency accounts, the assistance of State Bank was sought to trace his accounts in Multan.

In his defence, the former minister said he held an FCA even before becoming minister. “Where can I take my bank account if I am accused of being involved in the scam,” he said.

“I opened foreign currency accounts because I have to make some transactions with my brother who lives in Britain. But I have made no significant transaction so far.”

About the two other accounts, the ex-minister said he could not recall having any such account. “The accounts might have been opened by a relative of mine who had worked in different banks and died three years ago.”

Under the Haj policy, the government had agreed to provide accommodation within two kilometres of the Haram Sharif. But most pilgrims had to stay three to eight kilometres from the Haram.

Prime Minister Yousuf Raza Gilani sacked Mr Kazmi following an outcry over the Haj fiasco.—Syed Irfan Raza

Govt to accept NA Committee decision on Lodges

ISLAMABAD: Prime Minister Syed Yusuf Raza Gilani on Monday referred the Parliament Lodges Phase-II’s construction project to the Housing and Library Committee of National Assembly, and said the Government would accept its decision.

Speaking in the National Assembly, after Opposition Leader Chaudhry Nisar Ali Khan raised objections to the project, the Prime Minister said he sought details from Cabinet Division, Planning Division, Law and Parliamentary Affairs and National Assembly and was informed that various projects are initiated by different departments in Islamabad.

He said Parliament Lodges project was initiated in 2008, and the Central Development Working Party (CDWP) with Deputy Chairman Planning Commission in the chair approved it in September 2009. Later the project was presented to Executive Committee of the National Economic Council (ECNEC) headed by the then Finance Minister Shaukat Tarin, which also approved it on January 21 2010.

While the Housing and Library Committee of the National Assembly also approved it.

He, however, said contrary to the perception as if the project would cost Rs. 2.90 billion, in fact its actual cost would be Rs. 410 million, which had already been approved.

He said the construction would take place in phases.

Prime Minister said he has directed the Capital Development Authority (CDA) to reserve three percent quota for journalists in all the sectors of the federal capital. – APP

Suicide bomber kills 35 at Russia’s biggest airport

MOSCOW: A suicide bomber killed at least 35 people at Russia’s biggest airport on Monday in an attack that bore the hallmarks of militants fighting for a seperate state in the north Caucasus region.

President Dmitry Medvedev vowed to track down and punish those behind the bombing, which also injured about 130 people, including foreigners, during the busy late afternoon at Moscow’s Domodedovo airport. Dense smoke filled the hall and a fire burned along one wall.

“The explosion was right near me, I was not hit but I felt the shock wave people were falling,” said Yekaterina Alexandrova, a translator who was waiting in the crowded arrivals area to meet a client flying in from abroad.

Thick drops of blood were scattered across the snow-covered tarmac outside the arrivals hall, where traces of shrapnel were found.

“I heard a loud boom… we thought someone had just dropped something. But then I saw casualties being carried away,” a check-in attendant who gave her name as Elena told Reuters at Domodedovo, which is some 22 km southeast of Moscow.

The Kremlin said Medvedev, who has called the insurgency in the north Caucasus the biggest threat to Russia’s security, delayed his departure for the Davos international business forum in Switzerland.

The rebels have vowed to take their bombing campaign from the violence-wracked north Caucasus to the Russian heartland, hitting transport and economic targets. They have also levelled threats at the 2014 Winter Olympics, scheduled for Sochi, a region they claim as part of their “emirate”.

“Security will be strengthened at large transport hubs,” Medvedev wrote on Twitter. “We mourn the victims of the
terrorist attack at Domodedovo airport. The organisers will be tracked down and punished.”

No group has yet taken responsibility for the attack, but dozens of Internet surfers, writing in Russian, praised the suicide bomber on unofficial site kavkazcenter.com.

India won’t let nationalists raise flag in Kashmir

NEW DELHI: The Indian government foiled a nationalist party’s plan Monday to commemorate a holiday by raising the country’s flag in the heart of Kashmir, home to a separatist insurgency.

Leaders from the Hindu nationalist Bharatiya Janata Party, which is in the opposition in the national parliament, flew to Jammu in Indian-controlled Kashmir but were initially not even allowed to leave the airplane and were asked to return to New Delhi. After sitting on the tarmac for two hours, they eventually entered the terminal but will not be allowed to go anywhere else in the state, which is the only one in India with a Muslim majority.

While the Indian flag flies over government buildings in Indian-controlled Kashmir, the BJP leaders had wanted to hoist the colors in a square in Srinagar that is the frequent site of anti-India protests. Anti-India sentiment runs deep in Kashmir, where separatists groups are fighting for an independent homeland or merge with Pakistan.

The BJP ceremony was meant to commemorate Republic Day, which marks India’s adoption of a democratic constitution and falls on Jan. 26.

The Kashmiri and national governments feared that move would provoke violence after more than a dozen separatist groups said they would prevent any attempt to hoist the Indian flag in the Lal Chowk area of Srinagar, the region’s city.

It was not immediately known what the three leaders _ Arun Jaitely, Sushma Swaraj and Ananth Kumar _ planned to do next.

Indian Prime Minister Manmohan Singh and Kashmir’s top elected official, Chief Minister Omar Abdullah, had both appealed to the BJP to drop its plans before the leaders took off on Monday.

More than 68,000 people, mostly civilians, have been killed in Kashmir since an armed revolt erupted in the state in 1989. – AP

Ripple protests could topple U.S. allies

Alexandria, Egypt (CNN) -- Tunisia has brought a blast of reality to Mideast politics. Aging autocrats have been put on notice they can no longer count on docile citizens.

But is an era of unrest approaching? Will the winds of change sweep east along the Maghreb and bring down regimes from North Africa to the Levant and even the Arabian Peninsula?

Beyond doubt, those winds are blowing. Across the region they are being driven by the same social and economic factors, including high unemployment, a booming birth rate, and exploding food prices.

According to the International Monetary Fund, if chronic unemployment and the social tensions that accompany it are to be avoided the Middle East needs to create another 18 million jobs in the next 10 years. From where they stand today that's a very tall order indeed.

Amre Moussa, the Arab League secretary-general and former Egyptian foreign minister, warned regional leaders last week: "It is on everybody's mind that the Arab spirit is broken. The Arab spirit is down by poverty, unemployment and the general decline in the real indicators of development."

Regional parties like the moderate Islamists in the Muslim Brotherhood, scent opportunity.

"The same disease is in all Arab countries, we have different degrees only but the same origin of the disease, it is the same dictatorship, lack of democracy, lack of freedom restrictions on civil society," Esam el-Erian, spokesman for Egypt's Muslim Brotherhood said.

In Egypt as in other countries in the region the Muslim Brotherhood faces constant government harassment.

Hosni Mubarak, the 82-year-old Egyptian president, fears their populist power. He allows them and other opponents of his regime a very limited political voice, enough he hopes to defuse anger at the monopoly of power he has exercised over 30 years in power.

It is a balancing act that is now in peril, according to his critics. Ayman Nour, an opposition leader jailed by Mubarak and only released following U.S. pressure, believes Tunisia's revolt has shortened Mubarak's days in power.

He said: "How change happened in Tunisia was the last resort after all peaceful methods were no longer an option. This is what happened in Tunisia and this is what could happen in Egypt. It is the only solution to a situation that never changes."

There is a presidential election scheduled in Egypt in September this year. The situation is primed, Nour says, everything is ready, all it needs is something to ignite popular passions.

El-Erian of the Muslim Brotherhood talks in more revolutionary terms. "Without solving the main problems we can only delay the revolution, delay the intifada" or uprising he says.

But for all the rhetoric -- and despite several incidents -- the government in Egypt remains very much in control.

In Tunisia the revolt was triggered by anger at the suicide of Mohamed Bouazizi, a young vegetable market trader who torched himself over his dire economic plight.

In the week following the flight of Tunisia's President Zein al-Abidine Ben Ali to sanctuary in Saudi Arabia, more than half a dozen Egyptians set fire to themselves like Bouazizi.

None triggered wider protests, never mind opened the floodgates to the very real reservoir of anti-regime anger.

But Ibrahim Houdaiby, a savvy young analyst from a family with a long political pedigree, says it is too early to draw conclusions. "There is a lot of anger, and there is a lot of frustration, and if this frustration is not yet tangible and did not yet manifest itself in violent and big forms it is possible that it might happen and it is in nobody's interest that it does."

At a funeral near Egypt's second city Alexandria, where the Egyptian police have an unenviable reputation for brutality, I got a strong sense of just how far away that spark for revolt may be.

The gathering was tiny, just family and close friends. Twenty-five-year old Ahmed Hashem Sayed was the only one of the recent self-immolation cases to die of his burns.

As his slender shroud-wrapped body was being laid to rest only yards away on the other side of the high walls surrounding the tiny cemetery plot crowds going about their daily routines thronged the streets, none but a couple of curious kids joined the mourners.

Sayed's neighbor said his death had nothing to do with Tunisia and everything to do with his own poverty.

Later, on the muddy street of the slum where he lived with his family, his father told me his son was out of work more than he was in it. He didn't want to talk to us, didn't want to attract international attention, didn't want to make a martyr or national hero out of his son.

Houdaiby is sure Sayed was aware of Tunisian burn victim Bouazizi, who like Sayed was young and set himself on fire in economic despair, and although he may not have emulated him, he may well have been influenced by his actions.

The big regional lesson of Tunisia, according to Houdaiby, is that people have learnt they can bring about change themselves.

"What happened in Tunisia will of course impact the way people think. They know if they want things to change, at one point they will be able to change things"

But he adds Mubarak's regime has also learnt lessons, offering to subsidize bread and other essentials, albeit Houdaiby suspects, only until the current crisis seems over.

No doubt though, he says, the government's vehement denials ironically show how troubled it is by the Tunisian revolt.

"When you have the minister of foreign affairs saying that Tunisia could not be compared with Egypt and the situation is completely different and it is ridiculous that people are making any sort of comparison that says that they are worried."

And if they are worried in Egypt, with its large, tough state security forces, then other regional leaders may well be troubled too, warns El-Erian, spokesman for Egypt's Muslim Brotherhood. "If Egypt tumbles then watch the region follow, if change comes in Egypt, not in Tunisia, it will be domino sequences."

Indeed in the long run the United States may be the big loser. Many of the regimes on the defensive, like Mubarak's, are long-standing US allies.

And that says El-Erian -- who calculates that in a democratic Egypt the Muslim Brotherhood would have a large say -- could have serious implications for the United States.

"We are reflecting the opinion of the people and opinion and sentiments here are against the politics and policies of the United States in the region," he said.

It may sound like a bold statement, but on the streets of Tunisia, Jordan, Lebanon and Egypt to name but a few, U.S. credibility has taken a hammering over the past decade.

Wars in Iraq and Afghanistan have only served to fuel popular anger with the U.S. over the regional autocrats they support.

The implication is if the winds of change do blow down one or two of the region's rulers the political voices emerging may well bring a new dynamic to such intractable problems as Palestinian-Israeli conflict.

That alone could reset the region in a way unimaginable today.

Davos would be wise to remember why it works

It is easy to take pot-shots at the World Economic Forum in Davos. As most of the developed world groans its way back to growth, there is something a bit obscene about rich, famous and powerful people getting together on a Swiss mountain side to talk about how to make things better. It has a ring of “let them eat cake” about it.

This year’s jamboree will add fuel to the fire - with a large new Congress Centre entrance, with oodles of lights.

But as I say every year - that ignores what happens here. I don’t for one moment think that the sometimes pretentiously titled panels are really what this event is about. (Some are without doubt interesting and stimulate thought and debate, but you don’t need to schlep to Switzerland in winter to do that.)

Rather, Davos is about access, meetings, talking and schmoozing, which is why the most important rooms here are not the big halls where tedious panels will take place, but the bilateral rooms where government ministers and CEOs meet each other.

There is nothing as vulgar as a deal being done - that isn’t what Davos is about. Rather there is a handshake, a knowing nod, a sharing of understanding about future plans. It’s more: “I am doing this. What are you doing and how can we help each other?” Davos becomes neutral territory where opponents can chat. One top CEO told me that he meets all his top clients over the course of a week.

With so much firepower in this one place, there is also the chance for the global agenda to be clarified. Leaders make speeches. CEOs set out their thoughts. Activists present their protests. But by the time we all leave at the end of the week we have a good idea of what the issues in 2011 will be and how they will be tackled.

Last year the Greek Prime Minister George Papandreou said he wouldn’t need a bailout (he would and he did). We all left Davos knowing sovereign debt would be a growing problem and that there was no real plan to tackle it. Basel III wasn’t discussed much during the plenary sessions and panels, but it was the talking point of the coffee bars. Financial reform was on everyone’s agenda and eventually became law.

Perhaps where Davos tries, and some think fails, is when it attempts to become all things to all people. There is nothing sadder than Davos trying to become modern and ending up looking like your parents disco dancing. This year the congress bristles with social networking lounges, risk response network centres, social leaders, global young leaders, global young entrepreneurs, CEO tweeters and networking lounges galore. Much of this is nonsense. The real decision-makers will be having nothing of it and will be closeted away in their bilateral rooms and salons at nearby hotels. Most of us need only a coffee bar and an internet connection. Leave the jargon to the kids.

Davos would be wise to remember why it works. It creates an environment where like-minded people can meet and eat. A hot-house in the cold of winter where, every now and then, something actually gets done.

Friday, January 21, 2011

Today's Special

Pakistan, Japan ink 233-million-dollar soft loan agreement

ISLAMABAD: Pakistan and Japan on Friday signed an agreement under which Japan would provide a soft loan of US $ 233 million for development projects in Pakistan.

The signing ceremony was held at the Economic Affairs Division.

The agreement was signed by Sibtain Fazal Halim, Secretary Economic Affairs Division and Chihiro Atsumi, Ambassador of Japan to Pakistan.

Under the arrangement, Japan will provide a soft loan of US $ 233 million of which $60 million and $173 million would be for budgetary support and the Khyber Pakhtunkhwa Rural Road Project respectively.

This support is out of a total of $500 million pledged by Japan during the Pakistan Development Forum 2010.

Japan is providing these loans on highly concessional interest rate of 0.01 per cent per anum and to be remmitted over a period of 40 years including a grace period of 10 years.

On the occasion, Japan International Cooperation Agency (JICA) and EAD also signed the loan agreement for the budgetary support of $60 million.

The loan agreement for KP Rural Road Project will be signed after the approval of the project by the Executive Committee of National Economic Council (ECNEC) and the Cabinet.

The objective of the budgetary support is to help smooth the process of flood disaster restoration by providing import financing for goods and services essential to the recovery and reconstruction, thereby contributing to normalising and stabilising the living of flood victims and reviving the economy of the country in a timely manner.

Speaking on the occasion, the Secretary EAD thanked the government of Japan for their continued assistance to Pakistan for the socio-economic development of the country. He said that this assistance would also help further enhance the bi-lateral relations between the two friendly countries especially in the economic field.

In his remarks, the Japanese ambassador to Pakistan assured the support of his country to Pakistan for the socio economic development of the country and the people of Pakistan.

He further expressed hope that this assistance would help the government of Pakistan work effectively on rehabilitation and reconstruction of the flood-affected areas and would further strengthen the existing
friendly relations between the two countries.

Committee formed to resolve KESC issue

KARACHI: Chief Minister Sindh Qaim Ali Shah on Friday formed a four member committee headed by provincial minister Shazia Marri in order to resolve the issue of the sacking of 4,000 employees by the Karachi Electric Supply Company (KESC).

A protest by the sacked employees was still going on outside the KESC head office adjacent to the Gizri grid.

The demonstration had started Thursday morning when hundreds of sacked employees erupted into protest shocked by their dismissal. Some of them vented their anger on KESC officials and property.

Earlier, reacting to the sacking of more than 4,000 employees by the KESC, MQM chief Altaf Hussain warned the power utility to reinstate them or face a ‘peaceful movement’.

North Waziristan tribesmen rally against US drone strikes

MIRAMSHAH: Some 2,000 Pakistanis in the North Waziristan tribal region pummelled by US missile strikes demonstrated Friday, calling for an end to the attacks and the arrest of the US officials behind them.

The covert, CIA-run missile program is a source of deep resentment in Pakistan, where many believe large numbers of civilians are killed and maimed in the drone-fired strikes. US officials insist the strikes are precise and kill primarily Taliban and al Qaeda militants hiding along the Afghan border.

The northwest tribal region is said to be home to several militant groups focused on attacking US and Nato forces in neighbouring Afghanistan.

Shop owners, students and other residents shouted anti-American slogans, and called for US Defence Secretary Robert Gates and the former CIA station chief in Islamabad to be brought to justice.

”They should be arrested and punished by the courts in America,” said Abdul Khan, a student leader.

Reportedly, around 150 armed Taliban militants watched the rally in North Waziristan’s main town of Miramshah. It was not immediately clear whether they had helped organise it.

Pakistan officially protests the strikes as violations of its sovereignty, but Pakistani security agencies are believed to secretly cooperate with the program. Last year, the US fired around 115 missile strikes into Pakistan in a major escalation of the campaign.

World ‘running out of Internet addresses’

SYDNEY: The world will run out of Internet addresses “within weeks”, according to one of the founding fathers of the web, a report said Friday.

Vint Cerf, who helped create the web by connecting computers using Internet Protocol (IP) addresses, said it was his “fault” that the 4.3 billion addresses created were running out, the Sydney Morning Herald reported.

“I thought it was an experiment and I thought that 4.3 billion would be enough to do an experiment,” Cerf, who is Google’s vice president and “Chief Internet Evangelist”, was quoted as saying in an interview.

“Who the hell knew how much address space we needed?”

In 1977, Cerf created the web protocol IPv4, which connects computers globally, as part of an experiment while working with the US Department of Defense. He said he never expected his experiment “wouldn’t end”.

“It doesn’t mean the network stops, it just means you can’t build it very well,” Cerf said.

IP addresses are the unique sequence of numbers assigned to each computer, website or other internet-connected devices. They are not the same as website domain names.

The overwhelming number of devices now accessing the internet means the addresses are running out fast.

To resolve the crisis, an updated protocol for the Internet, IPv6, currently being planned by the industry, will create trillions of addresses.

As Google vice president Cerf, who was in Australia to address a conference, said he thought the new chief executive of the California-based giant, Larry Page, was ready to lead the company into the future.

In a surprise move, Google announced on Thursday that co-founder Page would replace Eric Schmidt as chief executive in April.

Schmidt, 55, a former chief executive of Novell, will remain with Google as executive chairman, focusing on deals, partnerships, customers and government outreach, Google said.

He will also act as an adviser to Page, 37, who served as CEO previously, from 1998 to 2001.

Cerf said Schmidt had been chief executive for 10 years – “a nice round number” – and Page was ready to lead the company into the future.

“Larry and Sergey are 10 years older than they were when they thoughtfully hired Eric to be the CEO… so everybody’s growing up,” Cerf said.

Google has grown over the past decade from a start-up battling other Internet search engines into a technology giant with nearly 25,000 employees and annual revenue of nearly $30 billion.

The company meanwhile reported its fourth-quarter net profit increased to $2.54 billion from $1.97 billion a year ago, while revenue rose 26 per cent to $8.44 billion.

World Bank approves loan, grant for Pakistan

WASHINGTON: The World Bank has approved a $250 million loan and a $35 million grant for Pakistan to help vulnerable communities in areas rocked by conflict.

The loan announced Thursday aims to bolster Pakistan’s recovery efforts in the Khyber Pakhtunkhwa (KP) province and Federally Administered Tribal Areas (Fata).

The grant, meanwhile, will be co-financed by the Multi-Donor Trust Fund (MDTF), the Washington-based international development lender said.

“This combined support comes at a critical juncture in order to assist the poor and vulnerable households to cope with income shock due to militancy crises in KP and Fata,” the bank added.

These areas have been hit by conflict for about a decade between the Pakistan army and militant groups believed close to al Qaeda and the Afghan Taliban.

LHC adjourns hearing in petition against Latif Khosa’s appointment

LAHORE: The Lahore High Court (LHC) on Friday adjourned the hearing of the petition challenging Sardar Latif Khosa’s appointment as Punjab governor to January 28, DawnNews reported.

During today’s hearing, the petitioner’s counsel argued that Khosa was removed from the position of Attorney General Pakistan due to corruption allegations and therefore he was not qualified to hold the position of the governor.

Justice Umar Ata Bandial subsequently remarked that there were allegations against Khosa which have not yet been proved.

Seeking assistance of the additional advocate general and deputy attorney general on the case, the court later adjourned the hearing to January 28.

Khosa’s appointment as Punjab governor was challenged in the LHC on January 12 by one Nawaz Cheema.

Six killed as gunmen attack oil company convoy in Kohat

PESHAWAR: Gunmen attacked employees of a Hungarian oil and gas company returning from work in northwest Pakistan on Thursday, killing two of them and abducting two others. Four soldiers guarding the convoy were also killed, a top official said.

All those killed and seized in the incident in Kohat region were Pakistani nationals, said the area’s top administrator, Khalid Umerzai.

He said the victims were working for MOL Pakistan, a subsidiary of the MOL Group.

A receptionist at the company’s headquarters in Islamabad said the offices were empty late Thursday. The company’s website said it was developing oil and gas blocks in the Kohat area.

Kohat is a dangerous region close to the Afghan border where militants and criminal gangs are active.

The two-car convoy was being guarded by the Frontier Constabulary when it was attacked, said Umerzai. Four of its officers were killed, along with a driver and a worker, he said. Two other employees were abducted by the attackers, he said.

Pakistan has significant oil and gas reserves in the south and northwest, but exploiting them is risky given the precarious security situation. Militants have attacked employees of foreign and local companies before, leading many of them to scale back operations.

In 2009, a Polish geologist working for an oil and gas company in the northwest was kidnapped by militants and later beheaded. A Chinese engineer kidnapped in a separate incident was released unharmed after six months in captivity.

American Idol’ returns, with J.Lo but not Cowell

It’s a kinder ”American Idol” without Simon Cowell. Television’s top show returned with a makeover for its 10th season on Fox. Cowell, everyone’s favorite villain, is gone as a judge. So are Kara DioGuardi and Ellen DeGeneres, replaced with the star power of Jennifer Lopez and Aerosmith’s Steven Tyler. Original judge Randy Jackson remains. The first, two-hour episode accentuated the positive, an indication that producers are setting a different tone.

Past audition shows have seemed a procession of train wrecks, narrated by Cowell’s biting putdowns. But the first three contestants shown all made it through to Hollywood.

And the New Jersey auditions ended with two emotional stories: the daughter of a cancer survivor from Staten Island and a boy from the Bronx who kept to his dreams despite time spent living with his family in a homeless shelter. Both are only 16, and both were given go-aheads by the judges.

J.Lo in particular had a difficult time becoming J.No. She seemed in agony the first time she was shown rejecting a contestant.

”Oh, my God, I hate this!” she complained. ”Why did I sign up for this? I want to go home.” She got up to hug a contestant who was crying upon meeting her.

When the theatrical Ashley Sullivan auditioned, Jackson voted no. But when the tears started flowing, Lopez and Tyler overlooked their reservations to keep her in the competition.

”It’s our 10th season, and everything feels brand new,” host Ryan Seacrest said, adding that it was ”the most fun we’ve ever had.”

It’s all a gamble for ”American Idol,” no longer as dominant in the pop firmament as it once was. Last season’s finale was seen by 24 million people, down 5 million from the big night the season before.

The show’s offseason turmoil was dismissed in a two-minute review at the show’s beginning.

”Forget what you think you know,” the show proclaimed, ”because the best is yet to come.”

And the show quickly signaled what producers have been saying, that they want more emphasis on the contestants’ stories.

”This isn’t our story,” Seacrest said. ”It’s yours.”
Tyler easily played the part of the rakish rock star, taking quick notice of the appearance of several female singers and being bleeped for off-color remarks twice in the first six minutes.

”Just the right amount (of leg) shows,” the 62-year-old rocker said, looking at the dress of an energetic 16-year-old contestant.

Your ticket to the Golden Globes ceremony

68th annual ceremony is unfolding at the Beverly Hilton Hotel’s International Ballroom, where hundreds of stars, from Sandra Bullock to Michael Douglas are taking part in one of Hollywood’s hottest parties of the year. Here’s a running view from inside the festivities, where some of the most colorful moments happen.

Wednesday, January 19, 2011

Today's Headlines

Fifteen dead in Iraqi suicide attacks

BAQUBA: A suicide bomber rammed an ambulance packed with explosives into a security headquarters on Wednesday, killing 13 people in the second major attack against Iraqi forces in as many days.

A second suicide attack in a nearby town killed two others and wounded a top provincial official, shattering a relative calm in Iraq following the formation of a new government by Prime Minister Nuri al-Maliki last month.

“We have so far received 13 bodies, and are treating 64 wounded,” Firaz al-Dulaimi, a doctor at Baquba hospital, said, referring to the first attack on Wednesday morning in the Diyala provincial capital.

The 10:00 am (0700 GMT) bomb in the middle of Baquba, a restive ethnically mixed city north of Baghdad, targeted an office of the Force Protection Service, the agency responsible for securing the country’s government buildings

About 90 minutes later in the nearby town of Ghalbiyah, a suicide bomber blew up his explosives-filled car in the midst of a crowd of Shiite pilgrims, killing two people and wounding 16, an official in the provincial security command said.

Among the wounded were Diyala deputy governor Sadiq al-Husseini and three of his bodyguards.

Husseini was visiting with worshippers as they gathered ahead of commemorations for Arbaeen, which marks 40 days since the anniversary of the death of the revered seventh century Shiite Imam Hussein.

Baquba, and Diyala province, was an Al-Qaeda stronghold as recently as 2008. While violence has dropped off dramatically both in Diyala and nationwide since then, the province remains one of Iraq’s least secure.

The attacks came a day after a suicide bomber detonated his explosives-packed vest in the middle of a crowd of police recruits in the central city of Tikrit, killing 50 people and wounding up to 150.

It was the deadliest attack to hit Iraq in more than two months, and the first major strike since Maliki named a new cabinet on December 21, ending nine months of stalemate after March elections.

Tikrit’s police chief Colonel Ibrahim al-Juburi and the head of the city’s emergency response squad Brigadier General Mohammed Majeed were fired in the aftermath of the blast.

Maliki condemned the Tikrit attack, saying “terrorists” had once again targeted the innocent.

“Once again the terrorists returned to their usual tactics of killing the innocent and targeting the brave young people who wanted to serve their country and defend it,” he said in a statement Tuesday evening.

“We will follow the case closely until we find who is responsible, and the reasons that let this tragic catastrophe happen.”

Violence across Iraq has declined substantially since its peak in 2006 and 2007, but attacks remain common.

Protests force Tunisian president out of power

Now ousted Tunisian President Zine El Abidne Ben Ali fired his interior minister on Wednesday after a deadly wave of violent unrest, the biggest in decades, reached the capital for the first time. People taking part in the unrest said they were angry about unemployment, corruption and what they called a repressive government. After mounting demands for him to step down, Ben Ali left the country on January 14, 2011.

Demonstrators hold boards reading “Ben Ali get out”. Thousands of angry demonstrators marched through Tunisia's capital, demanding the resignation of the country's autocratic leader.

Arab leaders meet on economy, poverty

SHARM EL-SHEIKH: Arab leaders gather in Egypt on Wednesday to discuss trade and development as the region feels the aftershocks of a popular uprising in Tunisia that emboldened dissidents in the Arab world.

It is the first meeting of Arab heads of state since Tunisian leader Zine El Abidine Ben Ali was forced out of the country on Friday after weeks of protests sparked by the self immolation of an unemployed man.

The death has sparked a rash of copycat attempted suicides in Algeria and Egypt, where two men set themselves on fire on Monday as foreign ministers met in the resort town of Sharm el-Sheik to prepare for the summit.

One of the Egyptians succumbed to his injuries on Tuesday.

Addressing the meeting, Kuwaiti Foreign Minister Mohammad al-Sabah reminded his counterparts of the challenges the region faces.

“Countries disintegrate, people conduct uprisings … and the Arab citizen asks: ‘Can the current Arab regime meet these challenges dynamically?’”

He questioned: “Can the regime address the humanitarian suffering of the Arab citizen?”

The government of Egypt, where roughly half of the population lives on two dollars a day and dissidents complain of similar grievances to Tunisia’s protesters, has denied any similarity with Tunisia.

Foreign ministry spokesman Hossam Zaki said the Tunisian uprising was peculiar to that country and Egypt allowed its citizens more freedoms.

The summit will also take place as early results indicate most southern Sudanese voted for independence in a referendum this month that is expected to partition Africa’s largest country.

Sudanese President Omar al-Bashir arrived in Sharm el-Sheikh on Tuesday to attend the summit.

The meeting is expected to implement the resolutions of its predecessor, which was held in Kuwait in 2009, and which included setting up a $2 billion fund to finance small and medium sized businesses.

In a region where rulers often assume power through coups or inheritance, the Tunisian uprising was unusual in that a highly autocratic ruler was forced out by mass protests.
Tunisian Foreign Minister Kamel Morjane, who briefed his counterparts in Sharm el-Sheikh on developments in his country, told reporters at a press conference that the protests were fuelled by political and economic grievances.

Delegates from one of the countries complained to AFP that they expected the summit’s pledges to lead to nowhere, as previous promises had.

But the economic aspect of the Tunisian revolt, which is mirrored in other countries in the region, may add to the urgency of taking measures to alleviate poverty in the region.

NZ-Pakistan 2nd test drawn; Pakistan wins series

WELLINGTON: Pakistan captain Misbah-ul-haq produced a man of the match performance to ensure his side batted out the final day to draw the second test against New Zealand on Wednesday and claim their first series victory since 2006.

Misbah finished the day on 70 not out, following on from his 99 in the first innings, as Pakistan reached 226 for five at the close of play, 48 runs short of their victory target of 274, to wrap up the two-match series 1-0.

Adnan Akmal was two not out as the visitors claimed their first series win since they beat the West Indies 2-0 at home five years ago.

“It’s pretty pleasing, we’ve been through some rough times but we’ve played some really good cricket in this series, we’ve been very disciplined,” Pakistan coach Waqar Younis told reporters.

“Full credit to Misbah and the boys, I think they all stuck to the task and managed to win the series.”

Misbah had shared in an 118-run stand with Younus Khan (81) – their second century-stand of the match – after New Zealand had threatened to spoil the visitors’ day when they reduced them to 42-3 in the first session.

Chris Martin was particularly aggressive in the first session, taking 2-24 off nine overs and had the Pakistani batsmen frantically trying to see him off.

New Zealand captain Daniel Vettori also provided some concerning moments for the visitors, introducing himself in the eighth over and getting bounce from the harder ball and some turn out of the footmarks.


Misbah and Younus, however, slowly but assuredly ground down the attack and for long periods during the session between lunch and tea looked to have given up any pretence of chasing down the target before they slowly began to increase the scoring rate.

New Zealand were given the slightest hope of a final session victory when Younus was caught by Reece Young off Tim Southee in the final over before tea.

“That was the key partnership, Misbah and Younus Khan,” Vettori said. “They’re pretty experienced players and they know their game pretty well.

“The wicket was good and we just couldn’t get that breakthrough early enough.

“I think even when we got Younus out before tea there was a chance there but we just needed to keep getting those breakthroughs to get into their inexperienced middle and lower order and we didn’t get them.”

Misbah, who faced 172 balls and hit his fifth boundary to bring up his 50 after 255 minutes at the crease, and Asad Shafiq, however, continued to combine stoic defence and flirting with the possibility of launching a frantic final assault.

In the final hour, Vettori trapped Shafiq in front for 24 to leave Pakistan 215-5 and while the New Zealand bowlers attempted to rattle them with several vociferous appeals, Akmal and Misbah negotiated their way through until the close.

Martin finished with 2-63 off 24 overs, leaving him on 199 test wickets.


New Zealand 1st innings

M. Guptill c Adnan Akmal b Umar Gul 29
B. McCullum lbw Umar Gul 2
K. Williamson c Adnan Akmal b Umar Gul 21
R. Taylor c Adnan Akmal b Wahab Riaz 78
J. Ryder c Adnan Akmal b Tanvir Ahmed 0
J. Franklin c Adnan Akmal b Abdur Rehman 33
R. Young c Adnan Akmal b Tanvir Ahmed 57
D. Vettori c Misbah-ul-Haq b Abdur Rehman 110
T. Southee c Misbah-ul-Haq b Umar Gul 1
B. Arnel lbw Umar Gul 1
C. Martin not out 4

Extras (b 7, lb 1, w 10, nb 2) 20

Total (all out; 127.1 overs) 356

Fall of wickets: 1-3 (McCullum), 2-46 (Williamson), 3-98 (Guptill), 4-98 (Ryder), 5-166 (Franklin), 6-180 (Taylor), 7-318 (Young), 8-322 (Southee), 9-338 (Arnel), 10-356 (Vettori)

Bowling: Umar Gul 32-3-87-4, Tanvir Ahmed 25-5-93-3 (1nb, 2w), Younis Khan 1-0-9-0, Wahab Riaz 16-3-46-1 (3w), Abdur Rehman 45.1-11-96-2 (1nb), Mohammad Hafeez 8-0-17-0.

Pakistan 1st innings

Taufeeq Umar c Guptill b Vettori 70
Mohammad Hafeez c Young b Southee 1
Azhar Ali c Taylor b Martin 67
Younis Khan c Ryder b Vettori 73
Misbah-ul-Haq lbw b Martin 99
Asad Shafiq c Taylor b Vettori 0
Adnan Akmal c Martin b Vettori 22
Abdur Rehman c McCullum b Martin 5
Umar Gul c McCullum b Martin 19
Tanvir Ahmed c Taylor b Southee 7
Wahab Riaz not out 7

Extras (b 1, lb 2, w 2, nb 1) 6

Total (all out; 133 overs) 376

Fall of wickets: 1-2 (Mohammad Hafeez), 2-134 (Taufeeq Umar), 3-144 (Azhar Ali), 4-286 (Younis Khan), 5-294 (Asad Shafiq), 6-324 (Adnan Akmal), 7-333 (Abdur Rehman), 8-360 (Misbah-ul-Haq), 9-363 (Umar Gul), 10-376 (Tanvir Ahmed)

Bowling: Martin 32-7-91-4, Southee 28-7-102-2, Arnel 16-4-50-0, Franklin 9-1-30-0, Vettori 47-11-100-4, Guptill 1-1-0-0

New Zealand 2nd innings

M. Guptill lbw Abdur Rehman 73
B. McCullum c Tanvir Ahmed b Abdur Rehman 64
K. Williamson c Adnan Akmal b Tanvir Ahmed 15
R. Taylor lbw Umar Gul 52
J. Ryder b Mohammed Hafeez 17
J. Franklin c Younis Khan b Mohammed Hafeez 6
R. Young c Azhar Ali b Abdur Rehman 20
D. Vettori b Umar Gul 1
T. Southee not out 22
B. Arnel lbw Umar Gul 0
C. Martin c Adnan Akmal b Umar Gul 1

Extras (b 2, lb 6, nb 13, w 1) 22

Total (all out; 90.5 overs) 293

Fall of wickets: 1-120 (McCullum), 2-166 (K. Williamson), 3-166 (M.

Guptill), 4-192 (J. Ryder), 5-208 (J. Franklin) 6-268 (R. Young), 7-268 (R.

Taylor) 8-275 (D. Vettori), 9-275 (B. Arnel) 10-293 (C. Martin)

Bowling: Umar Gul 20.5-4-61-4, Tanvir Ahmed 10-0-36-1, Abdur Rehman 39-6-119-3, Wahab Riaz 8-1-38-0 Mohammed Hafeez 13-3-31-2

Pakistan 2nd innings

Mohammad Hafeez c Taylor b Martin 32
Taufeeq Umar lbw Southee 0
Azhar Ali lbw Martin 10
Younis Khan c Young b Southee 81
Misbah-ul-Haq not out 70
Asad Shafiq lbw Vettori 24
Adnan Akmal not out 2

Extras (lb 6, nb 1) 7

Total (5 wickets; 92 overs) 226

Fall of wickets: 1-4 (Taufeeq Umar), 2-35 (Azhar Ali), 3-42 (Mohammad Hafeez), 4-160 (Younis Khan), 5-215 (Asad Shafiq)

Bowling: Martin 24-6-63-2, Southee 15-2-49-2, Vettori 34-13-57-1, Arnel 9-5-17-0, Franklin 5-1-6-0, Guptill 3-0-16-0, Ryder 2-0-12-0

Toss: New Zealand

Result: Test drawn

Man of the match: Masbah-ul-Haq

Umpires: Daryl Harper (AUS), Rod Tucker (AUS)

Third umpire: Chris Gaffaney (NZL)

Match referee: Roshan Mahanama (SRI)

Giffords feared being shot at public events, husband says

Tucson, Arizona (CNN) -- Rep. Gabrielle Giffords was worried about her safety long before she was critically wounded in a mass shooting that killed six people in Arizona, her husband said in a new interview.

"We've discussed it a number of times," Mark Kelly told CNN affiliate KVOA. "She felt that that was a possibility, pretty much exactly what had happened ... there have been threats against her and other members of Congress."

Giffords was hosting a constituents' meeting outside a supermarket in Tucson when a gunman opened fire. In addition to the six deaths -- which included a 9-year-old girl -- 13 others were injured.

The couple were concerned over heated and divisive political debates, Kelly told the affiliate, but despite the fears, her passion for public service was a priority.

"She was doing what she loved, she was representing people of southern Arizona," Kelly said. "She felt it was very important for them to have the opportunity to walk up to her and tell her what they think."

Kelly said the lawmaker will resume her public service "stronger than ever" as soon as she's well enough. He predicted she will return to the scene of the shooting.

"She loves southern Arizona more than anything," he told CNN affiliate KGUN. "She's here every week, doing stuff like 'Congress on your Corner' and I'm sure the first thing she's gonna do, when she's ready, is a 'Congress on your Corner' at that Safeway" where the shooting occurred.

The outpouring of support has been tremendous, Kelly said, including an elementary school student who sent his $2.85 in lunch money to Giffords with a card.

"I sealed it back up and we're gonna give it back to him," Kelly said. "It almost made me cry just standing there in the room, just to see the kid put his lunch money in the envelope for her."'

Surveillance video shows suspect Jared Loughner walking up to Giffords and firing at her face from about two or three feet away, the Washington Post reported Tuesday, citing two sources who have seen surveillance videos.

The bullet hits her head just above her left eye and exits from the back of her skull, the sources said.

Giffords remains in serious condition at University Medical Center in Tucson. A second, unnamed victim is listed in good condition.

The video shows that after shooting the lawmaker, the suspect turns the gun at others attending the event.

One of the victims, U.S. District Judge John Roll, was killed while covering Giffords' district director Ron Barber, according to the sources.

"Judge Roll starts to push Barber down on the ground and lay on top of Barber, and they start to scamper under the table, but Roll is on top," one source said, according to the newspaper. "

The director was wounded; Roll was killed.

A law enforcement official said federal and local authorities have conducted more than 300 interviews as part of the investigation.

Destructive device found along Spokane MLK parade route

A backpack containing a potentially deadly device capable of inflicting "multiple casualties" was found in Spokane, Washington, along the route of a Rev. Martin Luther King Jr. parade, the FBI said Tuesday.

The device was discovered Monday morning by three parade workers before the event, FBI supervisory agent Frank Harrill told CNN. The city's explosives disposal unit neutralized the device.

The gray backpack was placed on a bench at the northeast corner of North Washington Street and West Main Avenue in downtown Spokane, the FBI said in a statement.

Agents have leads in the case, but Harrill would not provide details on the device and the investigation, which includes a $20,000 reward for the arrest and conviction of those responsible.

The FBI released photos of the Swiss Army-brand backpack and two T-shirts that were found within. One shirt says "Treasure Island 2009" and the other reads "Stevens County Relay For Life June 25th-26th 2010."

The FBI is asking the public for information on who might have been with the backpack from about 8 a.m. to 9:25 a.m. Monday. It also is asking for photos or videos taken in the area.

The incident forced organizers of the parade to change its route, CNN affiliate KREM said.

Ivan Bush, who has helped organize the King birthday celebration march in Spokane for more than 20 years, told the Spokesman-Review that news of the backpack's potential was "just painful to see and hear."

American Airlines pilot found dead; police investigating

Miami (CNN) -- Florida authorities on Tuesday appealed for the public's help in the case of an American Airlines pilot who was found dead of an apparent homicide in his Pompano Beach home.

Russell Christopher Walker, 50, was found dead by authorities conducting a welfare check about 10:30 p.m. Friday, the Broward County Sheriff's Office said in a statement.

Walker had not been heard from for seven to 10 days before he was found, the statement said. It does not say how police believe Walker died or offer any other details.

Anyone with information about Walker's death is asked to contact the sheriff's homicide department, the statement said.

Sunday, January 16, 2011

Today's HeadLines

Real Madrid linked with Ruud return as Mourinho gets his wish

Real Madrid coach Jose Mourinho has revealed that the Spanish club's bosses have relented and will seek to sign him a new striker after all.

Mourinho had initially been told that he could not replace Gonzalo Higuain, who could miss the rest of this season after having back surgery.

France international Karim Benzema has been filling in for the Argentine, but Mourinho wants more options as Real seek to stop Barcelona retaining the Spanish title and also to win the European Champions League for the first time since 2002.

"I am sticking to my beliefs. I think it would be good to have another forward for what is left of the season," Mourinho told Madrid's website ahead of Sunday's trip to bottom club Almeria.

It is not just any club which have expressed interest, it is Real. They are the only club which can make me change my mind
--Ruud van Nistelrooy

"The club is looking into the possibility of signing a forward, which pleases me to no end."

Real have been linked with a move to bring veteran Dutch striker Ruud van Nistelrooy back to the Santiago Bernabeu, and the player's German club Hamburg confirmed the La Liga side's interest on its website on Saturday night.

Hamburg also referred to comments the 34-year-old made after scoring the only goal against Schalke, who this season signed another former Real striker in Raul.

"The reports are correct. It has been a strange week, it has been hard to concentrate and I am just glad it worked out," Van Nistelrooy, who left Madrid a year ago, said in quotes carried by the AFP news agency.

"We just need to see what happens in the next few days, but it is not easy for me. It is not just any club which have expressed interest, it is Real. They are the only club which can make me change my mind."

Real trail Barcelona by two points ahead of the halfway point of the Spanish season, with the Catalan club hosting Malaga on Sunday.

Third-placed Villarreal won 4-2 at home to Osasuna on Saturday to be 10 points adrift of Barcelona.

The highlight of the match was a superb goal from halfway by Ruben Cani that put Villarreal 2-1 ahead.

Espanyol joined fourth-placed Valencia on 34 points with a 2-1 win at Sevilla as striker Jose Callejon twice beat the offside trap to score in each half, doubling his tally for this season.

Sevilla substitute Alvaro Negredo scored in time added on despite an apparent handball, but his team stayed in 10th place.

Athletic Bilbao moved up to sixth place with a 2-1 win at home to Racing Santander following goals inside the first 10 minutes from Javi Martinez and Iker Muniain.

Ivan Bolado reduced the deficit with 15 minutes to play, but his fellow striker Pedro Munitis was sent off as the match came to an ill-tempered close with five players booked at the end.

Ninth-placed Getafe crashed to a 4-0 defeat at home to Real Sociedad, who ended a run of four defeats as Mikel Aranburu scored a late double.

Real Zaragoza moved up to third from bottom above Levante after beating their relegation rivals 1-0 as Gabi Fernandez scored the winner on halftime for the home team.

Sporting Gijon joined Zaragoza on 16 points, with a better goal difference, after beating Hercules 2-0 thanks to first-half goals from David Barral and Nacho Cases.

JPMorgan profit surges despite mortgage hit

JPMorgan Chase posted a stronger-than-expected fourth-quarter profit, even as it bolstered its reserves for mortgage-related legal expenses for the second straight quarter.

The New York-based bank made $4.8 billion, or $1.12 a share, for the latest quarter. That is up from a profit of 74 cents a share a year earlier and compares with the Wall Street analyst consensus estimate of 99 cents a share.

JPMorgan (JPM), the No. 2 U.S. lender by assets after Bank of America (BAC), said the latest quarter's profit was boosted by its decision to release $3 billion in loan loss reserves on its card services and non-impaired loan portfolios. Offsetting those gains, the bank added $2 billion to its reserves for impaired loans acquired in the 2008 acquisition of Washington Mutual, and boosted its litigation reserves by $1.5 billion.

All told, the one-time items tied to reserve changes and securities gains boosted latest-quarter profits by 12 cents a share -- accounting for the lion's share of the margin by which JPMorgan's profit beat analyst estimates.

"Credit trends in our credit card and wholesale businesses continued to improve," CEO Jamie Dimon said in a Friday morning press release. "In our mortgage business, while charge-offs and delinquencies have improved, credit costs still remain at abnormally high levels and continue to be a significant drag on our returns."

JPMorgan shares have been flat for the past year after far outperforming most other banks during the financial meltdown of 2008 (see chart, right). They were flat at $44.45 in premarket trading.

The report comes as investors mull over a tightening bank profit picture. JPMorgan and rivals such as Wells Fargo (WFC) and Citi (C) have padded their bottom lines in recent quarters by releasing loan loss reserves they took during the financial meltdown back into earnings.

But Wall Street has taken to focusing on what the banks will look like a year or two down the road and how they might change. Among other challenges, the banks must replace lost profit centers such as the credit and debit card fees they used to such great effect in recent years to gouge their hapless customers.

Analysts will be listening in on JPMorgan Chase's call, beginning at 9 a.m. EDT, for Dimon's take on that and other issues, including his latest comments on when the bank might get clearance to start paying a bigger dividend.

"Incremental guidance on how banks plan to navigate the current challenges, including the low interest rate environment, slow loan growth and the negative effects of regulatory reform, will be the focal points in the quarter," Credit Suisse analyst Moshe Orenbuch wrote this week in a note to clients. "Any additional details as to potential re-pricing efforts, product innovation or offsets, particularly in consumer related businesses, would be an incremental positive."

Among the key issues in the call will be the bank's decision to add $1.5 billion to its litigation reserves, in a move JPMorgan said was "predominantly for mortgage-related matters." Dimon previously shrugged off the mortgage putback crisis in October's earnings announcement even as the bank added $1 billion to those reserves.

Inuit lives and diets change as ice shifts

Climate change is altering diets and lifestyles among Inuit people, according to a scientist who has studied the human face of global warming in the Arctic.

Barry Smit, a professor at the University of Guelph, Canada, has spent five years leading research projects into how melting ice and changes in wildlife habits are impacting the lives and livelihoods of far northern communities.

Among his most striking findings was that increasing difficulty in hunting for traditional food was leading to much more junk food in the Inuit diet.

"People looking at the health of the Inuit have demonstrated that the traditional diet, which is almost exclusively raw meat, is in fact very healthy for them," Smit said. "But because of the new difficulties hunting, people are adapting their diets to what's available in the stores.

"The stores only have food that's easy to transport and doesn't perish, so there are no vegetables. The young people are increasingly eating highly processed junk food, so we are seeing more teeth problems and obesity."

The difficulties in hunting are caused by shifting ice and changing migratory patterns among animals such as seals, walrus, types of whales and polar bears, which form a large part of the traditional diet, Smit said.

He also noted that the shifting ice made hunting and traveling more dangerous.

Smit said: "Ice is fundamental to their livelihoods and culture. Most of their activities involve traveling on the ice.

The call of the Dolphin Mother

Editor's note: Erika Christakis, M.P.H., M.Ed., is an early childhood educator, former preschool director and college administrator. She is a parent of three teenagers and lives with 400 Harvard undergraduates as a residential housemaster at Harvard College.

(CNN) -- Have you heard a Tiger Mother's prescription for superior parenting?

As described by Amy Chua, a Yale law professor, in her recent and controversial book "Battle Hymn of the Tiger Mother," it includes relentless rote practice and generous doses of threats, shame and occasional physical punishment, yielding a successful person who takes pride in her accomplishments.

No play dates or trombone lessons or self-discovery for these kids: just an ultra-lean diet of school work and musical practice, a life stripped of the influences of personal choice, popular culture or peers.

That's how Tiger Mothers do it. Are they superior?

I couldn't say, because I am a Dolphin Mother.

Dolphin Mothers are flexible and playful with their children. As higher mammals, we know that our offspring learn through play, and we make time in their day for this important cognitive and social task. Dolphin Mothers also have a well-developed communication system. We can recognize the unique voice of our child in a sea of thousands of other children.

We can also clearly communicate our expectations, values and love to our children. And we are acutely tuned to their needs and feelings. This is especially helpful as our children go out into a world full of dangers and choices.

Dolphin Mothers benefit from complex social relationships with other Dolphin Parents that give us relief from the backbreaking labor of child-rearing while also teaching us new ways to guide our children's development.

Some of us care for our young full-time, while others depend on our pod for daily support. But all of us Dolphin Mothers value collaboration and welcome the presence of caring adults in our children's lives.

Dolphin Mothers protect our young but also encourage their independence. Our sharp hearing allows us to monitor our kids easily even when they are testing the waters on their own, so we are not too anxious about the occasional exposure to a bad influence.

Banksy's Disney 'execution' tops $120,000 at auction

London, England (CNN) -- Baloo, Mowgli and King Louie of the Apes from Disney film "The Jungle Book" all feature in a print by anonymous graffiti artist Banksy that sold for over $120,000 at auction Tuesday.

The work, "Save or Delete Jungle Book," went under the hammer alongside works by other urban artists as part of an Urban Art sale at Bonhams auction house in London.

The image was originally commissioned by Greenpeace for a poster campaign highlighting the problem of deforestation, with the characters transposed onto an image of a devastated forest. But the posters were never circulated due to copyright issues with Disney.

"Save or Delete Jungle Book," the start lot, achieved £78,000 ($122,000), the highest sale price at the auction. The other notable sales were both Banksy pieces, "Portrait of an Artist" (1998) which went for £60,000 ($93,500) and a canvas depicting a tanks that sold for £42,000 ($65,500).

These high prices indicate Banksy's continuing popularity. The anarchic street artist, who numbers Angelina Jolie and Johnny Depp among his many fans, is famous for stenciled graffiti on buildings and walls across the globe, including the controversial West Bank barrier in Israel.

Bonhams contemporary art specialist Gareth Williams says the high prices also show the healthy state of the market for urban art, which he defines as a more permanent version of street art.

"I think when the recession kicked in, it was a difficult time for all contemporary art, but urban art, because it was such a new market, was badly affected initially," Williams said. The market has "found its feet, it's got steadier" since then, according to Williams.

Bonhams was the first auction house in the UK to mount a sale of urban art in 2008 and has since staged two more urban art auctions. This was the fourth sale for the house.

The sale included many vibrant works by a number of well-known street artists -- including American artist Shepard Fairey's iconic "Change" poster for the 2008 U.S. presidential campaign. But Banksy was the big ticket.

"I think he appeals to a huge cross-section of people," Williams said. "You've got contemporary art collectors who love his work, and he also appeals to people who perhaps haven't really purchased contemporary art before."

And Banksy's anonymity, Williams said, helps to maintain a healthy interest in the artist and his cheeky and often anarchic imagery.

Other works in the sale included a spray-paint-on-board work by U.S. graffiti artist Futura 2000, part of a set for a 1983 concert by punk rockers The Clash; and a three-meter long suspended shark made out of reclaimed metal by artist Tony D'Amico.

Williams said that Banksy, alongside other street artists, regularly makes commercial work in addition to his street-based projects. But Banksy's more commercial work has not been immune to criticism.

Art critic Matthew Collings wrote in London newspaper The Times in 2008 after a previous Bonhams' urban art sale: "What can you get at the auction? You can be the owner of Banksy's Laugh Now, in stencil paint on canvas, for only £40,000. It shows a chimp with a sign round its neck that reads: 'You can laugh but one day we'll be in charge.'

What would you really be buying? A status symbol -- the work has no value as art. But owning it would make you modern and clever. Or stupid. It's a fine line."

Williams says that although it is created for a commercial environment, urban art is still connected to its roots in the street, both through the use of the techniques employed (such as stencil spray painting and wheat pasting) as well as through its politicized sensibility.

He added that street art is an ephemeral art form that disappears as quickly as it appears, and that "urban art is an attempt to redress this by leaving a more permanent legacy."

Art critic Francesca Gavin, who writes on graffiti and street art, said that making commercial art is simply a way for street artists to survive financially.

And while he may have proven himself to be a sound investment at auction, in the end, she said, "Banksy's appeal will always be that he appears to be sticking his tongue out to the establishment.

"Something that, I think, might seem very desirable even to the most straight-laced individual."

U.S.-Israel Tested Worm Linked to Iran Atom Woes

WASHINGTON -- Israel has tested a computer worm believed to have sabotaged Iran's nuclear centrifuges and slowed its ability to develop an atomic weapon, The New York Times reported Saturday.

In what the Times described as a joint Israeli-U.S. effort to undermine Iran's nuclear ambitions, it said the tests of the destructive Stuxnet worm had occurred over the past two years at the heavily guarded Dimona complex in the Negev desert.

The newspaper cited unidentified intelligence and military experts familiar with Dimona who said Israel had spun centrifuges virtually identical to those at Iran's Natanz facility, where Iranian scientists are struggling to enrich uranium.

"To check out the worm, you have to know the machines," an American expert on nuclear intelligence told the newspaper. "The reason the worm has been effective is that the Israelis tried it out."

Western leaders suspect Iran's nuclear program is a cover to build atomic weapons, but Tehran says it is aimed only at producing electricity.

Iran's centrifuges have been plagued by breakdowns since a rapid expansion of enrichment in 2007 and 2008, and security experts have speculated its nuclear program may have been targeted in a state-backed attack using Stuxnet.

In November, Iranian President Mahmoud Ahmadinejad said that malicious software had created "problems" in some of Iran's uranium enrichment centrifuges, although he said the problems had been resolved.

The Times said the worm was the most sophisticated cyber-weapon ever deployed and appeared to have been the biggest factor in setting back Iran's nuclear march. Its sources said it caused the centrifuges to spin wildly out of control and that a fifth of them had been wiped out.

It added it was not clear the attacks were over and that some experts believed the Stuxnet code contained the seeds for more versions and assaults.

The retiring chief of Israel's Mossad intelligence agency, Meir Dagan, said recently that Iran's nuclear program had been set back and that Tehran would not be able to build an atomic bomb until at least 2015. U.S. officials, including Secretary of State Hillary Clinton, have not disputed Dagan's view.

Neither Clinton nor Dagan mentioned Stuxnet or any other cyber-warfare possibly used against the Iranian program.

Israel has voiced alarm over a nuclear Iran and Israeli Prime Minister Benjamin Netanyahu has said only the threat of military action will prevent Iran from building a nuclear bomb.

Israel itself is widely believed to have built more than 200 atomic warheads at its Dimona reactor but it maintains an official policy of "ambiguity" over whether it is a nuclear power.

Any delays in Iran's enrichment campaign could buy more time for efforts to find a diplomatic solution to its stand-off with six world powers over the nature of its nuclear activities.

U.S. and Israeli officials refused to comment officially on the worm, the newspaper said.

Before shooting, suspect embarked on chaotic night

He wandered through the dark streets of his hometown, meandering from one store to another on a furious all-night excursion as he prepared what authorities say were the final steps in taking revenge on a world from which he'd become progressively alienated.

Jared Loughner checked into a down-and-out motel. He picked up photos showing him holding a Glock 19 while wearing only a bright red G-string. He bought ammunition on one of three trips to two different Walmarts.

He called a high-school pot-smoking buddy, ran away from his father into a cactus-dotted desert and updated his MySpace profile to say, "Goodbye friends."

Michelle Martinez ran into Loughner during his rambling odyssey. She and some friends were hanging out in the neighborhood when a sullen figure emerged from the darkness in a black hooded sweatshirt and startled them. Loughner picked his way through the group rather than walk around them, offering a deep, distant "What's up?" He then quickened his pace and disappeared into the darkness.

"I had a feeling he was thinking about something," said Martinez, who knew Loughner from their school days. "It was just kind of weird."

The encounter epitomizes Loughner's final hours as he became increasingly unhinged, culminating, authorities say, with him opening fire on a crowd of people at an event for Rep. Gabrielle Giffords. Six people were killed and 13 were wounded amid a barrage of bullets from a Glock 19.

Officials do not know what pushed the 22-year-old mentally disturbed loner over the edge, but interviews, records and a police chronology released Friday provide a fuller picture of his movements that in many ways reflect his scattered mind.

It would all play out within a few miles from the modest, single-story home where he grew up and lived all his life — save for a brief attempt he made at living in an apartment by himself.

The chaotic night, according to the official law enforcement chronology, began at 11:35 p.m. when he dropped off a roll of 35 mm film at a Walgreens.

In the next hour he stopped at a Circle K gas station/convenience store and checked into a Motel 6, a $37.99-a-night spot popular with truckers near a Long John Silver's and other fast-food restaurants.

If he slept at all that night, it wasn't for long.

At 1:45 a.m., he was back outside his parents' home, where he ran into Martinez and her friends.

At about 2 a.m., Loughner called an old friend, Bryce Tierney. They had been confidants in high school but hadn't talked for months — another in a series of friends with whom Loughner severed ties amid his increasingly bizarre behavior.

Loughner used to bang the drums in Tierney's garage while his friend jammed on the guitar. They used to talk philosophy, about how the modern world was draining people of individualism. They got high, as police found out when they pulled the two over in September 2007 and Tierney admitted they smoked a joint in a van on the way back from a convenience store.

Early Saturday, Tierney was up watching a real-life ghost chasers show on TV. When his cell phone rang, the incoming number was listed as blocked, so he didn't answer.

Tierney picked up the message immediately. It had a melancholy tinge: "Hey Bryce, it's Jared. We had some good times together. Peace out."

After the call, Loughner headed back to the Walgreens, where — at 2:19 a.m. — he picked up the developed photos. And 15 minutes later, he stopped to make more purchases at yet another convenience store.

At 4:12 a.m. Loughner was at a computer keyboard in an unknown location, typing a farewell bulletin on his MySpace page — "Goodbye friends." Authorities said the photo included in that posting was from the shots developed at Walgreens hours earlier.

After one additional stop, at another Circle K, Loughner began his quest for ammo. His first stop, a Walmart between his house and the scene of the shooting, doesn't sell bullets before 7 a.m. It was only 6:12 a.m. He returned at 7:04 a.m., but left the store without making a purchase.

He then drove 5 miles west to a Walmart superstore, where he purchased 9 mm ammunition and a black, backpack style diaper bag. It was now 7:27 a.m.

Just three minutes later, he was pulled over for running a red light in his 1969 dark gray Chevy Nova.

Loughner was cooperative, and the officer from the Arizona Game and Fish Department took his driver's license and vehicle registration information. Loughner had no outstanding warrants and was let go with a warning. And without a search.

The only thing the officer saw in the car was fast-food wrappers.

Around 8 a.m., Loughner had returned home. And there was his father, Randy, who had questions for his son.

The confrontation happened in the driveway.

The son pulled a black bag from the trunk of the Nova; Randy Loughner demanded to know what was going on.

"The father went out and said, 'What's that?' and he mumbled something and took off," Sheriff Clarence Dupnik said.

Loughner was desperate to escape. He hustled toward the corner where he used to catch the school bus with his neighbor Martinez, then hung a right and a quick left before entering a sandy wash that runs behind the houses on the other side of his street, North Soledad Avenue.

Winding his way through the desert scrub and cactus, Loughner arrived at a dry tributary 300 feet later that dead-ends into a bigger wash. His father jumped into his truck to catch up with his son.

But his son had disappeared from view.

Jared Loughner was alone again.

The only clue about the desert pursuit that has turned up is the black bag recovered Thursday at the intersection of the two washes. Inside, they found the same caliber of ammunition Loughner bought at Walmart.

Loughner's escape route took him up the wash, past the back of a post office, to where the dry stream bed opens into a broader swath of desert. In this part of suburbia, brush-choked expanses are never far away.

Eventually, Loughner returned to the Circle K he'd visited three hours earlier.

He was carrying two extended pistol clips that hold up to 31 bullets, along with two 15-round magazines, a four-inch buck knife, a Visa card, his driver's license and cash in a plastic bag.

Authorities said a cab picked him up at 9:41 a.m.

His destination was a Safeway store — and a violent confrontation with Gabrielle Giffords.

US pomp meant to improve tone of China relations

Chinese leader Hu Jintao is being feted in Washington this week with a lavish state banquet at the White House and other pomp usually reserved for close friends and allies — all intended to improve the tone of relations between a risen, more assertive and prosperous China and the U.S. superpower in a tenuous economic recovery.

The shaky trust between the United States and China has been eroding recently because of an array of issues — currency policies and trade barriers, nuclear proliferation and North Korea, and both sides seem to recognize the need to recalibrate relations.

The U.S. is one of China's biggest markets, with $380 billion in annual trade largely in Beijing's favor. Washington increasingly needs Beijing's help in managing world troubles, from piracy off Africa to Iran's nuclear program and reinvigorating the world economy.

"It is absolutely critical for the two sides to be setting a tone that says 'hang on a second, we are committed to an effective, positive relationship,'" said Center for Strategic and International Studies scholar Charles Freeman, a former trade negotiator in the George W. Bush administration.

The state banquet President Barack Obama is hosting will be Hu's first. In the days before his visit, senior officials from both countries have spoken publicly in favor of better ties.

Secretary of State Hillary Rodham Clinton said in a speech Friday that the countries needed to manage their conflicts but their shared interests were so entwined as to constitute entanglement.

"History teaches us that the rise of new powers often ushers in periods of conflict and uncertainty," Clinton said. "Indeed, on both sides of the Pacific, we do see trepidation about the rise of China and the future of the U.S.-China relationship. We both have much more to gain from cooperation than from conflict."

Chinese officials have emphasized what they see as common concerns while acknowledging the complexity of the relationship.

"When the relationship is strained we need to bear in mind the larger picture and not allow any individual issue to disrupt our overall cooperation," Vice Foreign Minister Cui Tiankai said in a speech Friday.

Such maxims, however, don't apply to issues China defines as its "core interests," including Taiwan, Tibet, and the overarching authority of the Communist Party. That's a condition Hu's visit won't change.

Hu, whose four-day trip starts Tuesday, is expected to talk up China's intended peaceful rise in a speech to business leaders and opinion-makers in Washington on Thursday and to highlight the benefits of China's market and investment when visiting Chicago.

Aware of China's plummeting image in American opinion, Chinese Foreign Ministry functionaries have in recent weeks been looking for ways to make the usually stiff Hu, and China as a country, appear more human, something akin to reformist patriarch Deng Xiaoping's donning a 10-gallon hat in Houston in 1979 just after the opening of diplomatic relations.

For the protocol-obsessed Chinese leadership, a highlight of the visit will be Wednesday's state banquet — an honor denied Hu on his last trip to the White House in 2006. President George W. Bush thought state banquets should be reserved for allies and like-minded powers and instead gave Hu a lunch. Even worse, a member of Falun Gong, the spiritual movement banned by China, disrupted Hu and Bush's joint appearance, and an announcer incorrectly called China "The Republic of China," the formal name of democratically ruled Taiwan.

In this visit, no major agreements are expected. Talks over a joint statement ran aground until last-minute negotiations in Beijing last week. But the shared recognition to put things right and the bumpy relations of the last year augur for a better outcome.

The recent disputes make the summit more necessary than ever, said Shi Yinhong, professor of international relations at Beijing's Renmin University.

"If you look back to relations over the last year, any progress is significant," he said.

A successful visit also stands to raise Hu's standing domestically as he heads toward retirement late next year and seeks to place his political proteges in positions of influence. "A demonstration that Hu can handle the U.S. well and show that China is now well respected by Washington should help Hu to consolidate his legacy," said Oxford University China scholar Steve Tsang.

Still more difficult will be stopping the larger drift in relations amid the countries' changing fortunes. Beijing feels its economic, military and diplomatic strength entitles it to more deference while Washington tries to shore up its superpower authority, forging alliances and ties with other countries amid the changing global order.

While the U.S. is weighted down by high unemployment, massive budget deficits and sluggish growth, China has roared ahead, with the economy expanding 9.6 percent in the third quarter of last year.

China now holds the world's largest foreign currency reserves at $2.85 trillion and a major chunk of U.S. government debt. At current rates, economists estimate China will overtake the U.S. as the world's largest economy within 20 years, possibly by the end of this decade. That transition could be bumpy, with China's authoritarian one-party communist political system and sense of historical grievance setting it at odds with the democratic West.

Feeling its oats, Beijing has largely rebuffed U.S. appeals for help in reining in bellicose North Korea, curbing Iran's nuclear program and faster appreciation of China's currency and dismantling of trade barriers. Chinese officials and the nationalistic state-run media have criticized Washington's renewed attention to Japan, South Korea and Southeast Asia, its arms sales to Taiwan and its continued naval patrols in the Yellow and South China seas as attempts to constrain China's influence in its backyard.

Chinese officials have accused the U.S. of orchestrating the awarding of the Nobel Peace Prize to imprisoned Chinese dissident Liu Xiaobo. And just last week, Chinese military commanders greeted U.S. Defense Secretary Robert Gates' offer for closer military dialogue by sending a prototype for a new stealth fighter on its first test-flight.

In recent months, about the only thing the two seem to have agreed on is that the U.S. and China did not have enough common ground to form a Group of 2, or "G-2", to solve the world's troubles.

The U.S.-China relationship "is as important as any bilateral relationship in the world," Clinton said Friday. "But there is no such thing as a G-2. Both of our countries reject that concept."