Politics this week
A cyclone devastated southern Myanmar, leaving large swathes of the Irrawaddy delta submerged under salt water. The Burmese government reported more than 22,000 deaths, but an American official suggested more than 100,000 people may have died. The ruling junta was criticised for failing to organise evacuations ahead of the cyclone, for the slowness of its relief effort and for obstructing the arrival of foreign aid workers and supplies. See article
China's president, Hu Jintao, paid the first state visit to Japan by a Chinese leader for a decade. He spoke of an “everlasting warm spring” in relations, and China promised Japan a new pair of pandas to replace one that died in Tokyo. But the visit was not marked by any breakthrough in talks over a disputed gasfield in the East China Sea. See article
For the first time since last July, and since violence broke out in Tibet in March, representatives of the Dalai Lama, Tibet's exiled spiritual leader, met deputy ministers from the Chinese government in the southern Chinese city of Shenzhen. Both sides spoke positively about the talks, but there was no reported agreement on anything. See article
James Huang, Taiwan's foreign minister, and Chiou I-jen, its vice-premier, resigned to take the blame for a scandal involving the loss of $30m in government money. The funds were apparently lost in an abortive attempt to buy diplomatic recognition from Papua New Guinea.
Game over
In America's election, Barack Obama made a big advance towards sewing up the Democratic nomination by winning North Carolina's primary by 14 percentage points, and coming a close second to Hillary Clinton in Indiana's contest. A big turnout among blacks in both states was a decisive factor in the results. With Mr Obama's share of delegates and the popular vote mightily increased, Mrs Clinton's attempts to woo the party's superdelegates were probably rendered hopeless. See article
The Democrats won a special election for a congressional seat in Baton Rouge that had been Republican for more than 30 years. To test strategies for November's general election, Republicans in Louisiana ran political attack ads associating the Democratic candidate in the district with Barack Obama; in this case, the strategy seemed to have failed.
Georgia carried out the first execution in the United States for more than seven months. Last month the Supreme Court upheld the constitutionality of the lethal injection procedure used in Kentucky, giving the green light to 34 other states using similar methods.
Grounds for divorce
Around 85% of voters backed a plan for autonomy in an unofficial referendum in Santa Cruz, Bolivia's richest region. The vote was a rebuff to Evo Morales, the country's socialist president, and his plan for a new constitution. See article
Yoani Sánchez, a Cuban blogger, was prevented from travelling to Spain to receive the Ortega y Gasset journalism prize. Cuban officials did not give her an exit visa.
Colombia's government extradited Carlos Mario Jiménez (alias “Macaco”), a leading paramilitary warlord, to the United States to face drugs charges. Human-rights groups objected to the extradition, saying it meant his victims would not be compensated and that he would not have to give testimony concerning murders and other crimes.
Several thousand people in southern Chile were evacuated after a volcano erupted.
Farmers in Argentina announced a new round of protests against export taxes after negotiations with the government failed.
Jaw-jaw is better than war-war
Talks due to be held between Iran and the United States over security in Iraq stalled amid angry accusations by both sides; America says the Iranians are arming Iraqi militiamen who kill American soldiers. Iraq's foreign minister asked the protagonists to soften their language and resume negotiations, adding that he did not want his country to become the battleground in a proxy war. See article
Britain's Court of Appeal confirmed the judgment of a lower court that the People's Mujahedeen of Iran, a group that opposes the government of Iran, should no longer be listed as a terrorist organisation, as it is by America and the European Union.
Street battles erupted in Lebanon's capital, Beirut, between gunmen loyal to the Western-backed government and others who support the opposition led by the Iranian-backed Shia movement, Hizbullah. Its fighters paralysed the capital by cutting off roads to seaports and airports.
Zimbabwe's Electoral Commission said there must be a run-off between President Robert Mugabe and his challenger, Morgan Tsvangirai, who is officially acknowledged to have beaten him in the first round of a presidential election on March 29th. But a date has yet to be set, and Mr Tsvangirai may not agree to run without better international monitoring. See article
Sudan's government was reported to have widened an offensive against rebels in Darfur, using Antonov aircraft to bomb several villages in the region's north. The United Nations High Commissioner for Refugees, António Guterres, said that the worsening situation in Darfur could prompt another massive displacement of civilians.
Russian dolls
Dmitry Medvedev was inaugurated as Russia's new president. However, his predecessor, Vladimir Putin, became prime minister, and made clear that he would keep as much power as he could, raising doubts about who will really run Russia. See article
In a rare piece of good news concerning Russian-American relations, the two countries signed a pact to boost their civilian nuclear trade and fight proliferation. America's Congress is expected to scrutinise the deal closely.
Britain's prime minister, Gordon Brown, admitted that his Labour Party had taken a drubbing in local elections on May 1st. Most galling for the party was the defeat of the incumbent mayor of London, Ken Livingstone, by the Tory, Boris Johnson. A few Labour parliamentarians floated the idea of a change of leader to stem their party's disastrous loss of popularity. See article
Clinton's Vow to Fight On Stokes Democrats' Concern (Update1)
May 8 (Bloomberg) -- Hillary Clinton's campaign may be broken. Now some Democrats are asking if she'll also break the party.
The prospect of the race for the presidential nomination dragging on after Barack Obama's North Carolina victory and his narrow loss in Indiana may jeopardize the party's chances in the general election, said Tennessee Governor Phil Bredesen, an unaligned Democrat.
``What I think a lot of us are worried about is the grinding and grinding on with this, and how tough it's going to be to come back and run a top-notch campaign in the fall,'' he said.
Other Democrats say Clinton has no chance of winning. Representative Louise Slaughter of New York, a supporter, called the election results ``grim'' for the New York senator. ``If you look at all the math and what's out there, it's pretty unlikely'' she can win, said Slaughter.
Former Senator George McGovern said yesterday he is switching his support to Obama from Clinton and urged her to quit. ``There comes a time when you have to call off the rivalry,'' McGovern said in an interview. ``We are just about there.''
House Chief Deputy Whip John Lewis of Georgia, who earlier endorsed Clinton and then shifted to Obama, said it is important that the Democratic race wraps up quickly. ``The time is short, the end is near,'' Lewis said.
Stream of Endorsements
Obama plans to announce a stream of endorsements by superdelegates -- the party officials and officeholders who aren't bound by the results of primaries and caucuses --including three who backed him yesterday. The campaign also confirmed that Jennifer McClellan, a Virginia superdelegate, shifted her support to Obama from Clinton. At that rate, he may have as many superdelegates as Clinton by the weekend.
Clinton, 60, met with superdelegates yesterday, and Obama, 46, an Illinois senator, returned to Washington to meet with them today. He appeared this morning on the House floor, stopping to chat with Clinton supporters John Murtha and Paul Kanjorski of Pennsylvania and Ike Skelton of Missouri.
``We'll find out,'' Obama said, when asked whether his trip to the Capitol netted him any new superdelegates.
Clinton vows to fight on. ``I'm staying in this race until there's a nominee,'' she told reporters in West Virginia yesterday. ``I obviously am going to work as hard as I can to become that nominee.''
Yet her chances of catching Obama in delegates or the popular vote died on May 6.
Vote Count
Obama won North Carolina by 232,700 votes, topping Clinton's 214,000-vote margin of victory in Pennsylvania on April 22 and leaving him with a lead of more than 800,000 votes in contested primaries and caucuses.
Obama has a total of 1,846 committed delegates to Clinton's 1,688.5, unofficial Associated Press tallies show.
Clinton's campaign, which said after her Pennsylvania win that it was collecting millions of dollars in donations, is running out of cash. She confirmed yesterday that she loaned her campaign $6.4 million since April, bringing her personal investment in her bid this year to $11.4 million. She raised another $1 million at a Washington fundraiser yesterday, spokesman Mo Elleithee said.
One insider who asked for anonymity said the Clinton team is spending almost $1 million a day and expressed doubt that the campaign can sustain a real effort for much longer.
Race Against McCain
One of Clinton's main rationales for staying in the race, that she would be a stronger candidate in November, is undercut by an analysis of public polls by news organizations and Gallup. They show Clinton and Obama running about the same against Senator John McCain, the presumptive Republican nominee.
In some states, including Florida, Ohio and Missouri, she runs stronger against McCain. Obama does better than Clinton in more states, including Colorado, Minnesota, Iowa, Michigan and Wisconsin, according to state surveys. In big states that Clinton has argued that only she can carry -- California, Pennsylvania and New Jersey -- both beat McCain by about the same margin.
There already are signs the battle may take a toll on Democrats. McCain trounces both Clinton and Obama in Virginia, where Democrats had been optimistic.
Democratic strategist Peter Hart, who is unaligned, says a protracted fight may create difficulties for the party.
Party Fissures
Arizona Senator McCain, 71, can maintain his competitive position in most national polls because the party is fractured, Hart said in a recent memo. One-quarter of the supporters of each Democratic candidate say they would either vote for the Republican nominee or wouldn't participate in the election.
These voters ``represent the difference between a dead-heat election and a comfortable lead for the Democrats,'' Hart's memo said.
To be sure, some officials such as Meredith Wood Smith, chairwoman of the Oregon Democratic Party, say the contest is galvanizing voters and that a nomination battle that ends in June leaves plenty of time to draw contrasts with McCain.
``This state is energized in every single corner and in between,'' she said.
Many more officials argue that the churn of the campaign will hurt the party's chances of unifying.
``McCain is no pushover,'' said Tennessee Governor Bredesen. The longer the fight drags on, the greater the risk of political damage, he said. ``It's like in a marriage -- in a good marriage it's OK to fight, but there are just things you don't say and places you don't go and can't get back from.''
Pelosi Gathers Power, Sets Party to Gain House Seats (Update1)
May 8 (Bloomberg) -- House Speaker Nancy Pelosi's party couldn't bring troops home from Iraq and Congress's public approval ratings are near a record low. Still, the California lawmaker has emerged as the most powerful Democratic House leader since Tip O'Neill.
In recent months, Pelosi, 68, has dominated the House and is poised to lead Democrats to an expanded majority in this fall's elections. She has thwarted President George W. Bush's push for a trade agreement with Colombia and blocked a measure to end wiretapping lawsuits against phone companies that he supported. She also is delaying decisions on major spending bills until next year, when a Democrat may be in the White House.
``She's consolidating her power,'' said House Government Reform Committee Chairman Henry Waxman, 68, a fellow California Democrat.
While Republicans have dubbed her ``Czar Nancy'' for her tactics, they also say she is effective. Representative Tom Cole of Oklahoma, 59, chairman of the National Republican Congressional Committee, said Pelosi is polarizing, though she is also a ``smart, hardball operator.''
Pelosi's ability to bring her members together is likely to help her party add to its 36-seat majority in November, even after a divisive Democratic presidential primary. Charlie Cook, editor of the Washington-based nonpartisan Cook Political Report, said Democrats may pick up as many as 10 House seats.
`Won-Lost Average'
``Pelosi's doing what she has to do,'' said Representative Tom Davis, 59, a Virginia Republican. ``A leader's report card is re-electing members; it's like share price for a CEO or won-lost average for a baseball manager.''
House Republican leaders say she shuts them out of the process. They used delaying tactics yesterday, preventing House action on housing foreclosure legislation to protest her refusal to let them amend that and a pending Iraq War spending bill.
During an angry exchange on the floor, House Republican Leader John Boehner shouted that ``the majority has an obligation to treat the minority with respect.''
Democrats said her clout results from her success in being inclusive with those in her party.
Representative Elijah Cummings, 57, a Maryland Democrat who is a member of the liberal Congressional Progressive Caucus, said Pelosi had met with him at least six times this year. Representative Allen Boyd of Florida, a leader of the ``Blue Dog Coalition'' of conservative Democrats, said she consulted him about energy legislation, a farm bill, and other measures.
``I've been on the other side of every leadership race she's ever been in, but I've become a Nancy Pelosi fan,'' said Boyd, 62.
Series of Setbacks
Pelosi had a series of setbacks last year, even as she muscled through several bipartisan measures, including an increase in the federal minimum wage.
Bush, 61, blocked her attempts to tie further funding for the Iraq war to troop withdrawals and to boost domestic spending above his requests. She was also criticized for traveling to Syria over his objections.
The lack of progress on the war has eroded the public's opinion of Congress. An April 25-29 New York Times/CBS News survey found approval ratings for Congress were just 21 percent, while Bush's were at 28 percent.
At the same time, though, voters said they would prefer to elect Democrats. The poll found 50 percent of Americans prefer the Democratic candidate in their district, while 32 percent favor the Republican.
Party Backs Her
Part of the Democrats' appeal may stem from Pelosi's skill in holding her party together like no other leader. In 2007, House Democrats backed their speaker on a record 92 percent of votes involving measures where the parties held opposing positions, according to Congressional Quarterly.
While she has selectively worked with the administration -- helping Treasury Secretary Henry Paulson craft an economic stimulus package in February -- her confidence in taking on Bush has grown as Democrats backed her on controversial legislation this spring.
``Who has the leverage?'' she said in April. ``I think the president realizes now that we do.''
In March, all but three House Democrats supported her push for legislation allowing intelligence agencies to intercept suspected terrorists' phone calls that didn't include Bush's demand to end lawsuits against telecommunications companies. Democrats from Republican-leaning districts faced a barrage of Republican attack ads.
Defying Bush
In April, defying Bush's call for Congress to ratify a free- trade agreement with Colombia, she persuaded Democrats to change House rules and delay a vote, allowing her party to avoid an election-year trade battle.
Pelosi is now working to sidestep more spending battles with Bush. She is planning to postpone debate over setting next year's government budget until a new administration takes office in January. She also is dropping earlier plans to append a large package of domestic initiatives, including new highway funding, to Bush's request for $108 billion for the war. Instead, she plans to include the items in a new economic-stimulus measure.
Pelosi concentrates on battles she can win, said John Fortier, a congressional scholar at the American Enterprise Institute, a Washington research organization that generally favors Republican policies.
``She has shown a toughness, and these are issues where it could matter,'' he said.
Representative Jim Cooper of Tennessee, a ``Blue Dog'' Democrat, said Pelosi has solicited his group's views and avoided votes on some social policies that would make his colleagues in Republican-leaning districts vulnerable.
Her approach belies the ``San Francisco liberal'' label Republicans have attached to her, he said.
``Governing is a lot different than guerrilla warfare,'' said Cooper, 53. ``She's made the transition well.''
Trichet Sees `Rather Protracted' High Inflation (Update3)
May 8 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said inflation will remain ``high'' for some time, signaling that the bank is in no rush to lower interest rates as economic growth slows.
``Inflation rates have risen significantly since autumn,'' Trichet said at a press conference in Athens today after the ECB kept its key rate at 4 percent. ``As we have said, inflation rates are expected to remain high for a rather protracted period of time before gradually declining again.''
The ECB is reluctant to follow the U.S. Federal Reserve in cutting borrowing costs as soaring food and energy prices drive inflation above 3 percent in the 15-nation euro region. The International Monetary Fund estimates economic expansion will weaken to 1.4 percent this year from 2.6 percent in 2007 after the U.S. housing slump pushed up the cost of credit worldwide.
``The level of uncertainty resulting from the turmoil remains unusually high,'' even though ``the economic fundamentals of the euro area are sound,'' Trichet said.
The Bank of England also kept its benchmark rate unchanged today. The euro rose to as high as $1.5441 after Trichet started speaking from $1.5313.
Inflation Concern
Consumer prices in the euro area rose 3.3 percent in April from a year earlier after increasing 3.6 percent in March, the most in almost 16 years. The ECB, which aims to keep inflation just below 2 percent, has left rates unchanged since June last year. By contrast, the Fed has cut its main rate seven times since mid-September, to 2 percent from 5.25 percent, in an attempt to fend off a recession.
Trichet said the governing council didn't ``draw particular conclusions from the fact that headline inflation came down,'' and that the current interest-rate level ``will contribute'' to bringing inflation back to the ECB's comfort zone. At the same time, inflation is ``likely to remain significantly above 2 percent in the coming months, moderating only gradually over the course of 2008.''
Thorsten Polleit, chief Germany economist at Barclays Capital in Frankfurt said inflation may not have peaked yet. ``I expect that inflation will even rise to 3.7 percent in August.''
`Imperative'
It's ``imperative'' that elevated inflation rates ``do not become entrenched in longer-term expectations,'' Trichet said.
Inflation expectations, as measured by French inflation- indexed bonds, have risen to 2.37 percent today from 2.19 percent a month ago.
``The inflation outlook appropriately is central to the ECB's policy considerations,'' John Lipsky, first deputy managing director of the International Monetary Fund, said in New York today. ``Policy prospects could shift, however, if inflation expectations remain well anchored and slowing growth reduces inflation pressures.''
The International Monetary Fund in Washington last month cut its global growth forecast and said the world economy faces a 25 percent chance of recession.
Economic data suggest Europe's economy is cooling. Executive and consumer confidence declined to the lowest level in more than two years in April and European retail sales dropped 1.6 percent in March from a year earlier, the most since at least 1995.
Exports from Germany, Europe's largest economy, unexpectedly fell for a second month in March, the country's statistics office said today.
Persistent Tension
Adding to the ECB's concerns, the world's biggest financial companies have posted more than $318 billion in writedowns and credit losses since the start of last year after the U.S. market for subprime mortgages, aimed at people with poor credit histories, collapsed. That has made banks reluctant to lend, pushing up the cost of credit and roiling financial markets.
Trichet said that financial turmoil is ``ongoing,'' even if ``we're observing elements that are in some respects encouraging and seem to show that a number of markets are going progressively back to normal. But it's not unanimous, it's not all the markets concerned. We'll continue to see persistent tensions.''
``Today looks to us like a tiny step toward a more dovish stance to be adopted once it will become clearer that the euro zone will not be immune from the slowdown other economic areas are experiencing,'' said Aurelio Maccario, co-head of European economics at Unicredit Markets & Investment Banking in Milan. ``We stick to our view of a first cut in December.''
Still, the ECB is concerned that companies will raise prices to pass on record raw-material costs and unions will push through bigger wage increases to compensate workers for the higher cost of living, leading to more persistent inflation.
Wage Woes
Wages in Germany, Europe's largest economy, rose 3.3 percent in January from a year earlier, the biggest increase in 12 years. Worldwide, food prices in March were 57 percent higher than a year earlier, according to the United Nations, and oil prices breached $120 a barrel for the first time this week.
Policy makers including Axel Weber and Juergen Stark have said they're not sure rates are high enough to contain inflation.
``We'll monitor very closely all developments in the coming weeks and decide whether the current level of interest rates ensures we'll meet our objective'' of taming inflation, Weber said on April 21.
``Trichet is unlikely to be drawn on anything until the ECB will publish its new staff projections next month which will raise inflation forecasts and cut the growth forecasts,'' said Ken Wattret, chief euro area economist at BNP Paribas in London. ``Trichet will have a lot more explaining to do then.''
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