"International Monetary Fund Managing Director Dominique Strauss-Kahn said Sunday that leading economies now have coordinated, detailed and comprehensive plans to resolve the severe credit crisis," MarketWatch reported. "He said almost all of the affected nations now have taken strong action to shore up their financial sectors. "Strauss-Kahn made the remarks at a press conference Sunday following two days of intense talks on two continents." The New York Times said: "European financial and political leaders agreed late Sunday to a plan that would inject billions of euros into their banks in a bid to restore confidence to the teetering financial system. "Taking their cue from a rescue plan announced last week by Britain, the European countries led by Germany and France pledged to take equity stakes in distressed banks and vowed to guarantee bank lending for periods up to five years. "Both France and Germany were planning to unveil national rescue packages on Monday worth hundreds of billions of euros, officials said. " 'The meeting that we had was exceptional,' President Nicolas Sarkozy of France, said at a news conference. 'We need concrete measures, we need unity. That's what we achieved. The plan on which we agreed today will be applied in all our respective states.' "The plan 'treats all the dimensions of the financial crisis,' Mr Sarkozy said." In a separate report, The New York Times said: "As international leaders gathered [in Washington] on Saturday to grapple with the global financial crisis, the Bush administration embarked on an overhaul of its own strategy for rescuing the foundering financial system. "Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favour of a new approach that would have the government inject capital directly into the nation's banks - in effect, partially nationalising the industry. "As recently as Sept 23, senior officials had publicly derided proposals by Democrats to have the government take ownership stakes in banks. "The Treasury Department's surprising turnaround on the issue of buying stock in banks, which has now become its primary focus, has raised questions about whether the administration squandered valuable time in trying to sell Congress on a plan that officials had failed to think through in advance. "It has also raised questions about whether the administration's deep philosophical aversion to government ownership in private companies hindered its ability to look at all options for stabilising the markets. "Some experts also contend that Treasury's decision last month to not use taxpayer money to save Lehman Brothers worsened the panic that quickly metastasized into an international crisis." In The Financial Times, George Soros wrote: "Now that Hank Paulson has recognised that the troubled asset relief programme is best used to recapitalise the banking system, it is important to spell out exactly how it should be done. Since it was not part of the Treasury secretary's original approach, there is a real danger that the scheme will not be properly structured and will not achieve its objective. With financial markets on the brink of meltdown it is vital to make the prospects of a successful recapitalisation clearly visible." Klaus Schwab, founder of the World Economic Forum, wrote in Forbes: "The economic changes happening now are structural, not cyclical, and therefore truly transformative. "I believe this transformation will, over time, reveal the following. "First, crises in a global world economy require numerous institutions and governments to respond, because any major crisis will have multiple dimensions to it that are beyond the comprehension or mandate of any single institution or government. Complexity and interdependency are characteristics inherent to globalisation. In fact, there is growing grassroots awareness that global challenges are interlinked, but current governance institutions appear unable to pursue the measures needed to address them holistically. "For example, the connection between climate change, food scarcity and energy security is evident, yet an integrated solution to the three is not. There is a mismatch between the global challenges of the 21st century and the global governance institutions of the 20th century. Putting aside the current financial crisis, the failure to achieve the Millennium Development Goals, the failure to conclude the Doha Round of trade negotiations and the struggle to negotiate a successor to the Kyoto Protocol all point toward this conclusion. "Second, calls for greater global or regional collaboration will not be easily answered. Shortcomings in strategic foresight, global cooperation and managing complexity are together what landed us in the current predicament. Leaders in policy and in industry must first develop a more systematic and strategic view of global issues if any future collaboration is to be effective and sustainable." AFP reported: "The heads of the World Bank and International Monetary Fund on Sunday assured developing countries that their needs would not be forgotten in efforts to tackle the financial crisis. "Picking up on complaints that the crisis will put recent hard-won economic gains in the developing world at risk, World Bank head Robert Zoellick insisted that this would not be allowed to happen. " 'Developing countries ... risk very serious setbacks to their efforts to improve the lives of their populations from any prolonged tightening of credit or a sustained global slowdown,' Zoellick told a news conference. " 'We must ... ensure that as governments and publics turn their attention to problems close to home, they do not step back from their commitments to boost overseas assistance to meet the Millennium Development Goals,' he said. "IMF head Dominique Strauss-Kahn said 'the financial crisis adds a crisis to a crisis (of rising food and energy prices in poor countries.) " 'We should not forget this other crisis,' he told the news conference after a meeting of the World Bank and IMF's Development Committee which advises the two bodies on economic development issues." The Associated Press said: "Attempts to tackle global warming are being made more difficult by the spreading economic crisis even as Democratic congressional leaders say it's still a top goal for next year. "At the very least, fear of a prolonged economic downturn is expected to delay attempts by the United States to cap greenhouse gases blamed for global warming. "Democratic leaders in the House and the Senate as well as both presidential candidates say addressing climate change by imposing mandatory restrictions on heat-trapping pollution - especially carbon dioxide from burning fossil fuels - remains a priority. "Only months ago, the prospect of climate legislation passing in the next Congress and becoming law looked promising. Both presidential candidates Barack Obama and John McCain support mandatory emission cuts and a Democratic majority vowed to act on the problem early in the new year. "But the most popular remedy for slowing global warming, a mechanism known as cap-and-trade, could put further stress on a teetering economy by raising energy prices."
British conceal evidence of covert Pakistani presence in Taliban command
"British officials covered up evidence that a Taliban commander killed by special forces in Helmand last year was in fact a Pakistani military officer, according to highly placed Afghan officials," The Times reported. "The commander, targeted in a compound in the Sangin valley, was one of six killed in the past year by SAS and SBS forces. When the British soldiers entered the compound they discovered a Pakistani military ID on the body. "It was the first physical evidence of covert Pakistani military operations against British forces in Afghanistan even though Islamabad insists it is a close ally in the war against terror." Last week, The New York Times reported: "A draft report by American intelligence agencies concludes that Afghanistan is in a 'downward spiral' and casts serious doubt on the ability of the Afghan government to stem the rise in the Taliban's influence there, according to American officials familiar with the document. "The classified report finds that the breakdown in central authority in Afghanistan has been accelerated by rampant corruption within the government of President Hamid Karzai and by an increase in violence by militants who have launched increasingly sophisticated attacks from havens in Pakistan. "The report, a nearly completed version of a National Intelligence Estimate, is set to be finished after the November elections and will be the most comprehensive American assessment in years on the situation in Afghanistan. Its conclusions represent a harsh verdict on decision-making in the Bush administration, which in the months after the Sept 11, 2001, attacks made Afghanistan the central focus of a global campaign against terrorism." The Los Angeles Times said: "Confronting the prospect of failure after seven years in Afghanistan, the US military is crafting a new strategy that is likely to expand the power and reach of that country's tribal militias while relying less on the increasingly troubled central government. "Under that approach, US forces would scale back combat operations to focus more on training Afghan government forces and tribal militias. The plan is controversial because it could extend the influence of warlords while undermining the government of President Hamid Karzai in Kabul, the capital. "The strategy also could set up a hair-trigger rivalry between national security units and the improved tribal forces, proponents acknowledge." In The Guardian, Max Hastings wrote: "While most of the world spent the weekend trembling for its wealth, in Afghanistan the Taliban busied themselves dying in quite large numbers, during an ill-advised assault on Helmand's provincial capital, Lashkar Gar. Around 50 insurgents were killed, for no loss to Nato and Afghan security forces. "This fits the war's pattern. Almost every time the Taliban fights a battle, it loses to overwhelming firepower. Unfortunately, such western successes are strategically meaningless. Nato is absent from vast areas of this intractable country, where the insurgents prosper. There is greater gloom about the conflict than at any time since the Taliban was ousted in 2001. "I spent a week in Afghanistan in September, and was shocked by the deterioration since my last visit two years ago. The British army, which justly prides itself on its 'can-do' philosophy, has been sobered by recent experience. Its casualties are acceptable within a context of progress. But they become dismaying against a background of growing Taliban influence and slumping confidence in the Kabul government." An editorial in The Christian Science Monitor said: "The McCain campaign may want to be careful with its charge that Barack Obama was once 'pals' with a 1960s American terrorist. Whoever is the next president faces a difficult choice in the Afghanistan war: Should the US support possible talks with the Taliban, pals of al Qa'eda? "General David Petraeus does. And as President Bush often says, he takes the advice of top generals. "As architect of the troop surge that helped turn the Iraq war into an exitable and low-level conflict, Gen Petraeus will soon become head of the US Central Command and thus responsible for American military operations in Afghanistan. "Several Nato commanders there say this seven-year old war, launched after 9/11 to oust both the Taliban regime and al Qa'eda, has become unwinnable and that only political reconciliation with Taliban insurgents can bring it to a close."
pwoodward@thenational.ae
