December 14, 2007
Senate Passes $696 Billion Defense Policy Bill

By THE ASSOCIATED PRESS
Filed at 5:40 p.m. ET

WASHINGTON (AP) -- The Senate on Friday passed a defense policy bill that would offer more help to troops returning from combat and set conditions on contractors and pricey weapons programs.

The measure reflects the best Democrats could do this year on their national security agenda while holding such a slim majority. Powerless to overcome GOP objections in the Senate, the bill does not order troops home from Iraq, as Democrats would have liked.

The 90-3 vote follows House approval earlier this week and sends the measure to President Bush to sign, which he is expected to do.

''Caring for our troops and their families must always be our top priority,'' said Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee, which helped write the bill.

The bill, which covers the 2008 budget year, authorizes $696 billion in military spending, including $189 billion for the wars in Iraq and Afghanistan.

While it does not send money to the Pentagon, it is considered a crucial policy measure because it guides companion spending legislation and dictates the acquisition and management of weapons programs.

The bill would authorize a 3.5 percent pay raise for service members. It also would guarantee that combat veterans receive mental health evaluations within 30 days of their request and prohibit fee increases to the military's health care system.

In one provision that is likely to be particularly costly, troops returning from Iraq and Afghanistan are guaranteed three more years of Veterans Affairs health care after being discharged. Current law gives troops two years to file claims.

Advocates say the extra time is needed because conditions can worsen over time or take more time to become obvious, particularly in cases of brain injury and post-traumatic stress disorder.

At the same, Democrats sought to put controls on the Pentagon's hefty weapons and technology budget, including missile defense.

The bill would authorize Bush to spend $10 billion for ballistic missile defense, about $331 million less than requested. The bill would restrict the money from being used to deploy missile defense radars in Poland and the Czech Republic until those governments approved the deal and Congress received an independent assessment of the program.

The bill also includes several provisions intended to increase the oversight of contractors and the rebuilding of Iraq and Afghanistan. More specifically, it would require that private security contractors working in a war zone comply with military regulations and orders issued by commanders.

It would establish an auditing system to oversee reconstruction contracts in Afghanistan that would be modeled after the special watchdog for Iraq reconstruction.

Final action on the bill comes as Democrats struggle for a way to pay for combat operations overseas without appearing to support Bush's policies in Iraq.

Some $70 billion in war spending is expected to be attached next week to a separate government-wide spending bill. While Democrats want to tie the money to troop withdrawals, Senate Republicans are insisting the money be provided without strings attached.

Holding a narrow majority and unable to muster the 60 votes needed to overcome procedural hurdles, Democrats are expected to back down and provide the money.

Let us reminder ourselves how the China and Vietnam success stories were achieved:

(1) Defeat and throw out the foreign impediment -- by utilization of the radical extremist ideology and techniques of the day (pre-capitalist communism).

(2) Thereby, re-claim and re-constitute their respective countries.

(3) Then, achieve peace, prosperity and modernity -- at relative "blazing speed" -- (when compared with the previous stagnant or backward centuries under foreign influence/domination).

Viewed in light of the China and Vietnam success stories, the move by the Middle East toward radical extremism -- as the means to remove the foreign impediment to peace, prosperity and modernity -- could, unfortunately, be seen by some as logical and understandable

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Change brings prosperity to another Asian nation
Vietnam's economy booms; even so, bottlenecks loom
By David J. Lynch
USA TODAY

VINH CUU, Vietnam — This South Korean-owned factory, which produces millions of Nike athletic shoes every year, employs ceiling fans and an open-air design to keep its assembly lines comfortable in the tropical heat. Workers strolling between buildings on the manicured industrial campus wear pastel-hued polo shirts. Nearby, cheerful managers lead upbeat training sessions in air-conditioned classrooms.

Yet, one of the biggest problems for Nike and its Korean partner is hanging onto employees. Every year, more than one out of five workers leave for another job in Vietnam's rapidly developing economy, where wages for some skilled positions are rising by double-digit annual percentages. "Because people have so many more options, it's harder to retain people," says Shirley Justice, Nike's chief representative in Vietnam.

Now enjoying its third consecutive year of better-than-8% annual growth, Vietnam is on its way to becoming the latest Asian nation to swap a history of colonial poverty for hard-earned prosperity. On bustling factory floors and crowded city streets, the Vietnamese are visibly leaving old ways behind and embracing the certainty of better days ahead. Outsiders are noticing: Commerce Secretary Carlos Gutierrez last month brought executives here from 22 U.S. companies, including Ford, Dow Chemical and 3M, to scout business prospects. "Our relationship is growing very rapidly. But it could be a lot bigger, and it should be a lot bigger," Gutierrez says.

As Vietnam seeks to attract more U.S. investment, however, investors such as Nike are increasingly concerned about the country's ability to surmount looming bottlenecks. Chief among them: a shortage of skilled workers and woefully inadequate roads, ports and rail links. "Costs are going up significantly in this country. … In a couple years, if they don't come through on some of the things they say they'll do with ports, there's definitely going to be a bottleneck here," says Justice, whose background in logistics led Nike to assign her here.

Vietnam is a key link in Nike's global supply chain: Last year, the Beaverton, Ore.-based company shipped 75 million pairs of shoes from its Vietnamese suppliers and expects to ship 81 million pairs in 2008. Nike says its footwear and clothing orders keep 200,000 Vietnamese workers employed, so its views carry weight here.

Vietnamese officials recognize the need for action but regard the problems as the inevitable consequence of rapid — and long overdue — economic growth. After Vietnam was forcibly unified by the communist North Vietnamese in 1975, it spent a decade mired in disastrous economic experiments that brought it to the brink of famine. In 1986, communist authorities launched doi moi, a policy of market-based reforms, which seemed to mimic China's earlier market-friendly moves. Like its northern neighbor, Vietnam is a one-party state whose leaders are more interested in economic change than in political liberalization.

Only in recent years has the economy begun to gather steam, averaging 7.8% annual growth from 2001 to 2006. A young, well-educated population of enterprising workers and eager consumers is drawing the gaze of multinational corporations, long mesmerized by China's much larger market. Foreign direct investment exceeded $10 billion last year and is on pace to top $12 billion this year, thanks in part to Vietnam's joining the World Trade Organization in January.

Vietnamese officials say they are determined to avoid the excesses of Chinese-style reforms, such as a politically dangerous gap between rich and poor. But globalization isn't yet an epithet here. At Pace Educator, a business school in Ho Chi Minh City, enrollment of about 7,000 midcareer students is up from 1,000 in 2001. Mercedes-driving Gu Tu Trung, 32, the company's chairman, says he provides Vietnam's budding CEOs the "global vision" they need to succeed.

"I tell them where we live is not Vietnam but the globe. And if you keep the old way of thinking, you can't survive," he says.

The capitalist transformation is molding the next generation. At Le Qui Don high school, one of Ho Chi Minh City's best, teachers overhauled the curriculum to encourage students to search for answers on their own rather than receive information passively, says principal Pham Van Phiet. When a visiting journalist asks a classroom full of teenage students what they want to be when they grow up, one young man stands and confidently replies in English: "I want to be a businessman like Bill Gates."

In the capital Hanoi, the target of fierce U.S. bombing raids in the 1970s, the streets are thick with noisy motorbikes. KFC outlets draw enthusiastic crowds, and flat-screen television monitors tuned to the Bloomberg financial channel adorn sleek investment offices.

Since 1993, economic advances have slashed the share of the population living in poverty by almost two-thirds. This summer, World Bank President Robert Zoellick on a visit to Hanoi hailed Vietnam for achieving "one of the fastest improvements in living standards in the world" and said the country was on course to join the ranks of so-called middle-income nations such as Brazil and Mexico by 2010. "We've been able to totally alter the face of our country," crows Deputy Prime Minister Pham Gia Khiem.

Some changes have been disorienting. Le Tan Phuoc was just 10 years old when the conflict known here as The American War ended in 1975. His father, a captain in the U.S.-allied South Vietnamese Army, was slapped into a labor camp for 2½ years by the communist victors from the country's north.

Today, Le is the CEO of Searefico, a maker of industrial refrigeration systems in Ho Chi Minh City that has enjoyed strong growth since being privatized in 1999. He's also a member of the Communist Party that imprisoned his father.

A few years ago, Le's young son asked him why he and his grandfather were on opposite sides of the country's historic political divide. "It was hard to answer him," Le says.

He still has trouble articulating the reason, though he adds that the party members at Searefico who recruited him were "the best people" in the company, and he harbors hopes that the party will evolve as the economy prospers. "I love my country," he says simply.

Despite breathtaking changes, Vietnam's economy remains small. Total economic output each year of about $62 billion is roughly equal to U.S. retailer Target's annual revenue. Foreign investors complain the communist bureaucracy remains opaque and, at times, corrupt. Vietnam ranked 165th of 178 countries in investor protections, according to a recent World Bank survey. "More reforms need to be done on all dimensions of investor protection, so investors can be more confident to invest," the report concluded.

Since signing a bilateral trade agreement with the U.S. in 2001, annual trade between the former battlefield antagonists has grown to more than $10 billion. But Vietnamese executives complain that U.S. trade measures designed to protect domestic producers are crimping their export hopes.

The imposition of U.S. duties designed to thwart what American producers claim was the sale of Vietnamese shrimp for less than the cost of production, for example, have depressed exports at companies such as Saigon Aquatic Products Trading Co. Before the duties were imposed, U.S. orders accounted for up to one-quarter of the company's $60 million annual sales, says Nguyen Van Cong Hau, the company's No. 2 executive. Now, the U.S. share is down to 15%.

"We worry a lot about that," he says. "Next year, if there's more barriers, we'll reduce (shipments to the U.S.) even more."

Vietnam's biggest success has been in the garment industry, which draws sizable orders from U.S. importers looking to avoid complete dependence on low-cost Chinese factories. Through September, Vietnam exported to the USA this year $3.27 billion in textile and apparel products. That represented a 27% increase over the same period in 2006 and ranked Vietnam behind only China and Mexico as a supplier of Americans' clothing.

With temporary limits on Chinese apparel exports to the USA, Vietnam was expected to post even greater increases. But special U.S. monitoring of the country's garments exports, a measure designed to win congressional approval of Vietnam's WTO application, is having a chilling effect on Vietnam's apparel exports. Some retailers have shied from placing new orders here out of concern that the monitoring could evolve into formal tariffs.

At the Garco 10 factory in Hanoi, workers toiling at sewing machines and presses produce 12 million shirts, pants and suits each year. About 45% of that is exported to the USA to be sold as Van Heusen, Perry Ellis and Tommy Hilfiger products in J.C. Penney, Kmart and Gap stores.

Factory boss Nguyen Thi Thanh Huyen, a veteran of 24 years in the apparel trade, frets over pressure from low-cost Chinese rivals and steadily rising costs. Wages are up — workers now make $120 to $150 monthly — plus oil, steel and other inputs are pricier. The falling U.S. dollar also is pinching her profits, as the factory's goods are priced in the American currency.

The company, boasting $90 million in annual sales, is a good example of the market-oriented changes remaking Vietnam's economy. Once entirely state-owned, Garco 10 is now a joint stock company with ownership split between a 51% state share and 49% held by workers. Nguyen says the garment maker is registered for an eventual listing on the stock exchange named for former president Ho Chi Minh.

Managers still treasure the memory of the day in January 1959 when Ho visited. But the cozy operating style of a state-owned enterprise is long gone. Managers have had to learn new ways of operating, balancing costs and profits with an eye toward the iron logic of a global marketplace. Says Nguyen: "Now, the rules have changed. … (But) we can compete with any company, any country, in the world.

U.S. Debating Shift of Support in Somali Conflict
By Ann Scott Tyson
Washington Post Staff Writer
Tuesday, December 4, 2007; A17

CAMP LEMONIER, Djibouti, Dec. 3 -- The escalating conflict in Somalia is generating debate inside the Bush administration over whether the United States should continue to back the shaky transitional government in Mogadishu or shift support to the less volatile region of Somaliland, which declared independence in 1991, U.S. defense and military officials said.

Defense Secretary Robert M. Gates discussed regional issues during a visit to Djibouti on Monday, including Somalia and the presence there of about 8,000 Ethiopian troops, the officials said. Ethiopian forces intervened a year ago to install the fledgling government in Mogadishu and they continue to fight Islamic radicals in Somalia.

"My biggest concern about Somalia is the potential for al-Qaeda to be active there," Gates said on his first visit to the Horn of Africa as defense secretary. Asked about allegations of human rights abuses by Ethiopian troops in Somalia, Gates said: "We're obviously very interested in helping the African Union and Ugandans to try and exercise some constructive influence on the Ethiopians."

U.S. military officials say Somalia is the greatest source of instability in the Horn of Africa, leading them to seek new ways to contain the violence there.

One approach, Pentagon officials argue, would be to forge ties with Somaliland, as the U.S. military has with Kenya and other countries bordering Somalia. A breakaway region along Somalia's northwestern coast, Somaliland has about 2 million people and an elected president, and offers greater potential for U.S. military assistance to bolster security, even though it lacks international recognition, they say.

"Somaliland is an entity that works," a senior defense official said. "We're caught between a rock and a hard place because they're not a recognized state," the official said.

The Pentagon's view is that "Somaliland should be independent," another defense official said. "We should build up the parts that are functional and box in" Somalia's unstable regions, particularly around Mogadishu.

In contrast, "the State Department wants to fix the broken part first -- that's been a failed policy," the official said.

The official U.S. government position is that the United States should withhold recognition from Somaliland because the African Union has yet to recognize it. "We do not want to get ahead of the continental organization on an issue of such importance," said Assistant Secretary of State Jendayi E. Frazer in an e-mailed response to questions.

The issue is diplomatically sensitive because recognizing Somaliland could set a precedent for other secession movements seeking to change colonial-era borders, opening a Pandora's box in the region.

In Djibouti, U.S. military officials say they are eager to engage Somaliland. "We'd love to, we're just waiting for State to give us the okay," said Navy Capt. Bob Wright, head of strategic communication for the Combined Joint Task Force Horn of Africa. The task force is composed of about 1,800 U.S. troops who conduct military training and reconstruction projects such as digging wells and building schools in 11 countries in the region.

Meanwhile, the United States continues to back Somalia's weak Transitional Federal Government, set up in late 2004 with support from international organizations and the African Union.

Lawlessness in Somalia, where a political vacuum since the government's collapse in 1991 has been filled by rival warlords and militias, is a concern for the U.S. military because the country has provided sanctuary for terrorists and has fostered groups that seek to impose strict Islamic law, or sharia.

In late 2006, Ethiopia dispatched thousands of troops into Somalia to unseat a group known as the Islamic Courts movement, which the U.S. military says is affiliated with al-Qaeda.

That incursion also created an opportunity for the U.S. military to take action in Somalia with counterterrorism raids by small Special Operations teams. Together with the CIA, they are attempting to eliminate members of what is known as the East Africa al-Qaeda cell, thought to be responsible for the U.S. embassy bombings in Kenya and Tanzania in 1998, according to defense officials.

"They are precise, laser-like focused, small, a handful of guys who go in and out," the defense official said. "Some things the agency [Central Intelligence Agency] does, some things they allow us to do," the official said, adding that counterterrorism operations are ongoing.

In Somalia, the U.S. military has also staged at least two AC-130 gunship airstrikes and a naval strike targeting suspected al-Qaeda operatives in the past year.

In recent months, human rights groups have accused Ethiopian forces of abuses such as rape and indiscriminate killing of civilians as they bomb and burn villages in counterinsurgency operations.

Despite those allegations, the Pentagon continues to back the Ethiopian presence. "Any government that provides Somalis with assistance we support, including Ethiopia," a senior defense official said. "I am unaware of specific allegations regarding the conduct of the Ethiopian troops."

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Russian Consulate Opens in Kurdistan
A consulate of the Russian Federation opened yesterday in Erbil, the administrative center of Iraqi Kurdistan, where, unlike the rest of the country, the government is in full control. The Russian consulate joins those of Iran, Great Britain and South Korea, and others will open soon in the rapidly developing city. “We were ready to open last year, but several insignificant situations prevented us,” Russian Ambassador to Iraq Vladimir Chamov said. The search for premises was one of those problems. The Russian general consul in Erbil is Vagif Garaev. The necessary equipment to issue visas should be installed at the consul at the beginning of the year.
Prime Minister of the Iraqi Kurdistan Nechirvan Barzani said at the opening of the consulate that “Support from abroad is extremely important to us now to restore the economy and create new industries.” Kurdistan, the three northern provinces of Iraq, is probably the safest part of Iraq now. There are direct flights between Erbil and Stockholm, Frankfurt, Amman, Istanbul and Dubai. A Moscow-Erbil flight is also planned. More than 2000 foreign companies operate in Iraqi Kurdistan.

Oil is driving the regional economy. About 20 companies have reached agreements with the regional authorities on oil production. A subsidiary of Alfa Group will begin geological exploration in the area next year. Agricultural enterprises are also emerging in the region and a construction boom is in full swing as more and more Iraqis come, looking for a peaceful life. The cost of housing has risen by ten times in the last ten years as a result, and there is still a housing shortage.