Politics and Economics Headlines – 29 October, 2005

October 28, 2005

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EU Troops Stage Exercise To Protect ‘Oil-Rich Country’

AGENCE FRANCE-PRESSE via Defence News
European troops are this week conducting air and ground exercises in southern France simulating an international defense of an oil-rich country under attack, officials said.

Some 3,000 soldiers from France, Belgium and Germany are taking part in the exercise, dubbed OAPEX 2005, which will test a scenario in which the European forces are flown in, with armored vehicles and a U.N. mandate, to battle a hypothetical enemy invading an oil-producing nation.

“The aim is to look at situations that already exist,” a French military spokesman, Lt.-Col. Jean-Luc Favre, told Agence France-Presse at an Air Force base in Toulouse. He did not say what country the exercise was modeled on, explaining only that it was “a country which possesses oil fields and which is attacked by another country.”

“It’s the first time we’ve done an operation on this magnitude — multinational and inter-service (ground and air),” he said. “The objective is to be able to command from Paris an operation that is happening 5,000 kilometers away.” A British contingent was to have participated, but received new orders to leave the Toulouse base and fly on to Pakistan, officials said.
(19 October 2005)


Syrians queue for fuel as subsidies cuts are announced
via Reuters
IRIN
DAMASCUS – Anxious motorists have been queuing at Syria’s petrol stations in recent weeks, concerned about rising fuel prices after the government announcement that state diesel subsidies would be phased out by 2010.

Prime Minister Naji Otri was quoted as saying that hugely expensive energy subsidies simply “cannot be endured any longer.” Promised subsidy cuts – along with dwindling domestic reserves, soaring global oil prices and illegal smuggling of subsidised diesel out of the country – has moved some analysts to predict a quadrupling of diesel prices within five years. …

In response to popular concerns, the government announced that the subsidies reductions would be accompanied by a number of measures designed to limit the social consequences of rising prices.

According to statements from the prime minister, state employees would be given purchase-slips enabling them to buy 200 litres of diesel per year at subsidized prices. Plans were also announced to increase state salaries by 15 percent annually for the next five years. Mini-bus drivers, meanwhile, would be exempted from tax on their vehicles so current ticket prices could be maintained.

Diesel fuel sold to bakeries, too, will remain at subsidised levels to avoid jumps in bread prices, while 20 percent of the money saved from the cuts will go towards helping low-income segments purchase diesel.

Otri was quoted as saying that, as subsidies are gradually phased out, “more social aid will be offered, in order to achieve a balance.”
(27 October 2005)
IRIN is the Integrated Regional Information Network, part of the UN Office for the Coordination of Humanitarian Affairs (OCHA).


Jump in US mass layoffs
Up 80% to 250,000, half of those in the South

Associated Press
Hurricanes Katrina and Rita triggered a surge in layoffs in September, with large-scale job cuts jumping to their highest level in nearly four years. Employers announced 2,069 mass layoffs last month, an increase of more than 80 percent from August, the federal Bureau of Labor Statistics said Tuesday. That is the largest number of mass layoffs _ job cuts involving at least 50 workers _ since November 2001. The increase was concentrated in southern states _ particularly Louisiana and Mississippi _ where mass layoffs reached their highest level since the government began tracking them a decade ago.

Underscoring the job loss from Katrina, Louisiana officials said Tuesday that state’s unemployment rate spiked to 11.5 percent in September, up from 5.8 percent in the previous month, the highest it has been since the 1980s. About one in five of the mass layoffs came in manufacturing, lower than in the past. But substantial portions of the job cuts came at restaurants, hotels, casinos and other hospitality businesses that are an underpinning of the Gulf Coast economy. Employers in ship building, hospitals and schools also sent large numbers of workers home after the storms forced them to close or scale back. …
Layoffs can be temporary. But the scope of the job cuts and extent of the damage in the hurricane region suggest that these layoffs may not be as short-lived as past reductions, said Dean Baker, co-director of the Center for Economic and Policy Research, a think tank that tracks employment.

“In terms of people’s lives, let’s say someone had a reasonably good job in the tourism industry, they’re not going to wait around a year and half or two years for their job to come back,” Baker said. “What’s there when it (the Gulf economy) comes back might be qualitatively different than what it was before.” Baker said the layoff figures might be understating job loss because they only track employers with at least 50 workers. That misses the many smaller employers that account for a growing share of the job market, he said.
(25 October 2005)


Republicans ask oil industry for help with fuel prices

Carl Hulse, NY Times
WASHINGTON – After forcing through two pieces of legislation with significant benefits for the oil industry this year, House Republican leaders on Tuesday called for oil companies to return the favor by building new refineries and taking other steps to increase fuel supply and lower gas prices.

“It is time to invest in America,” said Speaker J. Dennis Hastert, who said that in a period of soaring industry profits, “we expect oil companies to do their part to help ease the pain American families are feeling from high energy prices.”

The decision by Republicans to take aim at an industry that is typically a chief ally reflected mounting anxiety among lawmakers about the political fallout from soaring fuel prices.
(26 October 2005)


Oil doesn’t want focus on big profit
Companies stepping up advertising

Frank Ahrens, Washington Post
Gigantic oil companies generally do not enjoy the best PR.

Pick your poison: Oil companies have caused tanker spills, proposed drilling into the Arctic wildlife ranges, crafted ties to shady nations and meddled in the affairs of others, and produced products that pollute.

Now, even as high gasoline prices continue to anger motorists and aggravate financial problems at General Motors Corp. and Ford Motor Co., the oil companies have begun to report record quarterly profit. Yesterday, British energy giant BP PLC reported a $6.53 billion third-quarter profit, up from $4.87 billion in the same period last year. And tomorrow, analysts expect Exxon Mobil Corp. to show that it earned nearly $9 billion over the past three months — the largest corporate quarterly profit ever.

Grumbling already has begun on Capitol Hill: Last month, one senator proposed a windfall-profit tax on oil conglomerates, and yesterday, House Republicans warned energy companies against price gouging.

To deflect the damage, the energy industry is relying on an ad campaign that was escalating even before hurricanes Katrina and Rita blitzed Gulf Coast petroleum refineries. The print and television ads are designed to educate consumers and lawmakers with a “we’re all in this together” tone.
(26 October 2005)


Automobile apartheid — another lesson from Katrina

Joel S. Hirschhorn, Gristmill
Analyses of the failure of all levels of government to prevent or effectively manage the Katrina calamity in New Orleans have generally missed a crucial point. Alongside bias against poor people and African-Americans is automobile apartheid, born of fifty years of suburban sprawl. First-class citizens drive motor vehicles, second-class Americans walk, cycle, or ride public transit. Certainly many of the latter are poor, but millions more are middle-class Americans.

When emergency response largely ignores the plight of second-class citizens, no one should be surprised.

Automobile apartheid means anyone who wants mobility through walking, cycling, or public transportation suffers discrimination in a built environment designed for automobiles. In the past 20 years, as automobile addiction has increased, sprawl has run rampant, the number of trips people take by walking has decreased by more than 42 percent, and obesity has skyrocketed.

Personal freedom and independence should mean more than the ability to go wherever one wants, whenever one wants. Americans should also have the freedom to travel how they want. When cars are the only option, freedom is diminished.

Joel S. Hirschhorn, author of Sprawl Kills: How Blandburbs Steal Your Time, Health and Money and former Director of Environment, Energy, and Natural Resources at the National Governors Association. He can be reached through SprawlKills.com.
(26 October 2005)
The late philosopher and social critic Ivan Illich made a similar argument in his book Energy and Equity (online). In particular, see the chapter, “The Radical Monopoly of Industry”. -BA


Venezuelan nuclear technology is a long shot

Sam Logan and Julio Cirino, ISN Security Watch
When Argentina’s Foreign Minister Rafael Bielsa announced on 10 October that Venezuela was seeking to purchase a medium-sized nuclear reactor from his country, many asked why such an oil-rich nation as Venezuela would make public its aspirations to obtain nuclear power, raising suspicions about President Hugo Chavez’s real nuclear intentions.

This latest move in Venezuelan political maneuvering to further unite the region also has given Washington more cause for concern.

Regardless of the Chavez’s true intentions, the realities of this announcement reveal the tip of an iceberg that entails more than nuclear power and bilateral relations between Venezuela and neighboring Argentina and Brazil.
(26 October 2005)