Economist: Euro crisis could erupt again this year

DAVOS, Switzerland (AP) — Is the euro crisis over? A leading U.S. economist says not by a long shot.

Even as the head of the European Central Bank talked Friday of "positive contagion" in the markets and predicted an economic recovery for the recession-hit eurozone later this year, economist Barry Eichengreen warned that the debt crisis that has shaken Europe to its core could easily erupt again this year unless European leaders move faster to solve their problems.

While European governments and markets have been breathing easier in recent months after years of turmoil, it's no time for complacency, said Eichengreen, who has chronicled the Great Depression and explored the consequences of a breakup of the euro currency used by 17 nations.

"Nothing has been resolved in the eurozone, where markets have swung from undue pessimism to undue optimism," Eichengreen told The Associated Press in an interview at the World Economic Forum in Davos, Switzerland. "They said all the right things last year ... and they've been backtracking ever since."

He warns that the crisis over too much debt burdening governments and banks in the 17-country currency group "is going to heat up again in 2013."

He urged eurozone leaders follow up on its proposals to steady its banking system and keep failed banks from adding to government debt through expensive bailouts.

European leaders in Davos this week are seeking to reassure investors and corporate leaders that the continent is on the mend after its punishing debt crises.

European Central Bank chief Mario Draghi on Friday forecast a recovery in the eurozone economy in the second half of the year, and spoke of "a new restored sense of relative tranquility" and "positive contagion on the financial markets."

But he acknowledged "we don't see this being transmitted into the real economy yet."

Draghi said governments need to move ahead with structural reforms to make their economies grow faster, which will help reduce government debt.

Heavily indebted countries such as Spain and Italy faced alarmingly high borrowing costs on bond markets last year, as investors wondered whether they would be able to keep paying their debts. Those bond market rates fell after key steps by European leaders. One was the European Central Bank's offer to purchase bonds issued by indebted countries if they promise to reduce their deficits. Another was a proposal to set up a so-called banking union that would keep failed banks from bankrupting any one country by transferring the supervision of bank behavior and finances to a single, central EU supervisor at the ECB.

The banking union decision was key. Meanwhile, Europe is in a recession that is putting added pressure on government finances.

"Europeans will be shocked out of their complacency, I think, soon enough," Eichengreen said. "There will be a relapse to the greater volatility of the first half of last year."

"None of the underlying problems have been solved. There is no economic growth in Europe. Germany itself is on the verge of recession. The banking union doesn't exist. There's less consensus on completing it than we thought last year, so the markets are going to lose patience at some point and the crisis will be back. "

Eichengreen, a professor at the University of California, Berkeley, studied the possibility of a eurozone breakup long before the crisis that started in late 2009 forced other people to consider what was once unthinkable. He concluded that leaving the euro would be disastrously expensive and cause widespread chaos for any country that tries it.

Political leaders are aware of those high costs, which means a country such as debt-strapped Greece leaving the eurozone "is off the table for the moment," he said.

Concerns about Europe's economic future — and the threat that Britain could one day pull out of the European Union, whose 27 members together make up the world's largest economy — clouded this year's gathering in the Swiss Alpine resort of Davos.

The forum pulls together corporate and political leaders who strike business deals, strategize about world problems and attend lavish parties — and comes under regular criticism from activists and workers who say the elite event is disconnected from the world's economic realities.

Activists at Davos took over a Shell station Friday to protest drilling for oil in the Arctic.

View the original article here

Read More

Compromise helps Dutch stay afloat in crisis

AMSTERDAM (AP) — In the U.S., tax hikes have been the subject of partisan warfare that brought the country to the very edge of a "fiscal cliff." In southern Europe, spending cuts have led to mass protests and labor strikes.

Maybe both could learn from the Dutch — whose compromise culture has kept the country afloat throughout the economic storm.

In the Netherlands, hits from the global financial crisis have so far been absorbed in a more relaxed way, as political parties, trade unions and officials have been more focused on cutting deals than in fighting over principles — and sharing pain as well as prosperity.

After all, the pragmatic Dutch outlook says, we're all in this together.

The Dutch system, known as the "Polder Model," seeks to divvy up the inevitable suffering from a downturn in a way that feels fair to all. Employers agree not to slash as many jobs as they otherwise might in exchange for workers agreeing to take pay cuts and not go on strike. The government, meanwhile, attempts to build public support for tax hikes and spending cuts by distributing them evenly across groups.

"Everyone is going to feel the pinch," Prime Minister Mark Rutte said after a recent meeting with industry and union leaders, while adding: "We're going to share the burdens as equally as possible. As a united country we're strong."

The idea of "Poldering" resonates deeply with the Dutch populace. Historically, dwellers of the low-lying country had to cooperate across social classes to share the costs of maintaining the system of windmills and dikes that protected them from floods and turned marshes into dry farmland known as "polders."

It was a matter of life and death.

Now, with the economy in the doldrums, the housing market in decline and unemployment at a 10-year high of 7.2 percent, Poldering is back in vogue.

The new Dutch coalition government that took office in November consists of two parties who had been bitter foes for a decade: the conservative VVD party under Rutte, together with the leftist Labor party. Their governing pact was designed to put the Netherlands on firmer financial footing by combining, for instance, the spending cuts on welfare desired by the conservatives with the tax increases on homeowners desired by Labor.

It's as if the Republicans and Democrats had sat down together in Washington, hashed out their differences, and adopted the bulk of recommendations for long-term budget reform in America.

Another source of Holland's compromise culture is its long history of international commerce stretching all the way back to the Dutch East India Company — which dominated trade between Europe and Asia in the 17th and 18th centuries and was the first corporation to issue stock.

"Compromise is really in the nature of a nation that depends on international trade for its prosperity," said Randall Filer, economics professor at Hunter College in New York.

"The intangible benefit is that outsiders — whether it be investors, or trade partners or political allies — trust it's going to remain a stable country, with open markets and social stability."

A sign of the benefits such openness can bring: The Netherlands is the world's second-largest agricultural exporter, after the United States.

The origin of the Polder Model in its modern form was an economic crisis in 1982: Amid high unemployment and stagflation, government ministers sat down with unions and industry leaders, and brokered a deal in which unions agreed to wage restraints and ended strikes in exchange for employment guarantees.

The Dutch economy, the fifth largest among the 17 eurozone countries, has been among the best-performing among industrial nations since then. According to IMF figures, it grew more than 1 percent per year faster than Sweden, France or Germany from 1990-2007, and slightly faster than the U.S. — but not quite as fast as Britain. Greece and Spain grew faster initially buoyed by the introduction of the euro, but their economies have since collapsed.

Major credit rating agencies say the Netherlands remains one of Europe's few triple-A rated economies, although Standard & Poor's this month repeated a negative outlook.

To help the Dutch government keep a handle on its finances, the first meeting between labor unions, employers' associations and the new Cabinet in December yielded at least one concrete agreement.

The government said it would devote €100 million ($133.5 million) to job retraining programs mostly for laid-off adults 55 years and older, currently the group having the most difficulty finding work, but also for unemployed youth and workers in the hard-hit construction sector.

Jose Kager, spokeswoman for an umbrella group of Dutch labor unions, said that the move was partly symbolic, given that workers stand to lose 10 times that much in long-term unemployment benefits under the governments' current plans. But she said the talks will continue. Unions are not seeking to preserve all jobs, but rather to get the government and employers to agree to stop over-use of temporary contracts — which she said deprives workers of their shrinking safety net.

"It's always better to have a seat at the table," she said.

View the original article here

Read More

Kuwait to host Syria crisis meeting, envoy meets Assad

BEIRUT (Reuters) - Kuwait will host an international conference next month to tackle Syria's humanitarian crisis, the ruling emir said on Monday, as foes of President Bashar al-Assad voiced frustration with international efforts to end the civil war.

In Damascus, special international envoy Lakhdar Brahimi met Assad but the Syrian opposition vented its anger at what it called a "silence" over the unabated killing of civilians by government forces, most recently in the central town of Halfaya.

Assad is under growing pressure from rebel forces in the 21-month-old war that activists say has killed more than 44,000 people. However, diesel from his main international ally, Russia, has arrived in Syria, providing the first significant amounts of the fuel in months to power industry and the military, generate electricity and heat homes during the winter.

Russian Foreign Minister Sergei Lavrov also said he did not believe Assad's government would use chemical weapons, in remarks broadcast shortly after activists released reports of what they said was a poison gas attack in the city of Homs.

Kuwait's emir, Sheikh Sabah al-Ahmad al Sabah, said the conference for Syrian donors would be held in late January in response to an invitation by U.N. Secretary-General Ban Ki-moon.

"The Syrian wound is still bleeding, and the killing machine still continues, killing dozens of our brothers in Syria each day," the emir told a meeting of the Gulf Cooperation Council in Bahrain.

Last week, the United Nations appealed for $1.5 billion to help save the lives of millions of Syrians suffering a "dramatically deteriorating" humanitarian situation. The appeals are to help 4 million people within Syria and up to 1 million Syrian refugees in five other countries until next July.

Underlining how rebels are taking the battle close to Assad's doorstep, U.N. and Arab League envoy Brahimi had to drive overland to Damascus from Lebanon on the eve of his meeting with the president because fighting around the international airport has made it impossible to fly in.

Brahimi said his talks with Assad had dealt with possible solutions to a crisis. "I told him what I was seeing abroad and about the meetings I had with different officials in the region and abroad," he told reporters. "The situation in Syria still is a reason for worry. We hope that all the sides work toward the solution, as the Syrian people want."

OPPOSITION ANGER

Syria's opposition fumed at what it called silence over the unrelated killing of civilians by Assad's forces. On Sunday, dozens were killed in Halfaya and many more wounded. Activists blamed an air strike on a bakery where a crowd was queuing in the town, which was seized by insurgents last week.

"Silence over the massacres committed against the Syrian people is blackmail and a means to pressure the people, their revolution, and their leaders," said Moaz Alkhatib, who heads the opposition National Coalition.

However, Alkhatib did not accuse anybody directly for remaining mum over what would be one of the deadliest air strikes of the civil war.

Activists also said rebels in central Hama province shot down a government fighter jet on Monday during clashes outside a village loyal to Assad. Rebels have captured a string of military compounds around the country. Damascus is now being dragged into the conflict, with fighting in its southern districts and the suburbs on its eastern outskirts.

Brahimi's plan for an end to the Syrian crisis centers on a transitional government, but has left vague Assad's role. The opposition rejects anything but Assad's overthrow and says the government crackdown has been too fierce to accept dialogue.

POISON GAS REPORTS

With rebel gains growing, the army has been increasingly relying on its superior weaponry. It has used air strikes and even long range, Scud-type missiles, according to U.S. and NATO reports.

Western powers have warned Assad that using chemical weapons would be a "red line", which they implied would draw international involvement in the conflict. Syria repeated on Sunday that it would never use chemical weapons against its people.

In Moscow, Foreign Minister Lavrov told the Russia Today (RT) television channel that recent signs that parts of Syria's chemical arsenal were being moved - a development that alarmed Western governments - was an effort by the government to make the weapons more secure.

"Our information is ... that the latest reports about some movement of the chemical weapons was related to steps undertaken by the government to concentrate the chemical stuff ... at two sites, to make sure it is absolutely protected," he said.

This correlated with information the Americans had, he said.

The activists' reports of what they said was a poison gas attack in Homs could not be confirmed, as the government restricts media access in Syria.

The Syrian Observatory for Human Rights gathered activist accounts of the incident, which said that six rebel fighters were killed after inhaling smoke on the front line of Homs's urban battleground.

The Observatory, a British-based group with a network of activists across the country, called on the International Committee of the Red Cross to send a medical team to the area to determine what had happened.

DIESEL LIFELINE

An Italian shipowner said two cargoes of Russian diesel had reached the Syrian port of Banias this month. It was unclear who was behind the shipments and there was no evidence they violated international sanctions against Syria.

"(Our vessels) loaded two cargoes of gasoil in Russia at the beginning of December for delivery to the East Mediterranean. The charterer then asked us to deliver the volumes to Banias," said Paolo Cagnoni, who heads Mediterranea di Navigazione S.p.A., the family-run Italian tanker firm.

He declined to disclose the names of the vessel charterers and the recipient of the deliveries, which amount to around 42,000 metric tonnes of gasoil worth close to $40 million at current market prices.

(additional reporting by Asma Alsharif and Mahmoud Habboush in the Gulf, Steve Gutterman in Moscow and Jessica Donati in London; writing by David Stamp; editing by Mark Heinrich)

View the original article here

Read More

Flailing Honduras in yet another political crisis

TEGUCIGALPA, Honduras (AP) — Members of the ruling party met behind closed doors, bartering all night for votes to depose four Supreme Court justices who had rejected the president's plan to weed out corrupt police. Ominously, soldiers and police surrounded the National Congress.

As the hours ticked by, representatives inside puffed on cigarettes in violation of their own anti-smoking laws and jokingly accused each other of vote-buying. Then shortly before dawn Wednesday, President Porfirio Lobo's National Party overwhelmingly and, many say illegally, approved the judges' dismissal.

That was a risky move.

"We don't know when we leave after the vote if there will be prosecutors waiting to detain us," admitted Sergio Castellanos of the Democratic Unification party, who voted with the majority. "Here you have to be ready for anything."

On global rosters of failing states, Honduras doesn't even crack the top 50, yet by many grim measures the troubled Central American republic is barely clinging to its status as a functioning country.

Three years after former President Manuel Zelaya was run out of office at gunpoint in his pajamas, Lobo is struggling. He has twice warned that his enemies are conspiring to oust him in a coup, and he then provoked a constitutional crisis with the judges' removal, an act that legal scholars describe as everything from an abuse of power to a betrayal of the country.

Political turmoil is but the latest trouble bedeviling Honduras. Even in the best of times, Lobo's government, police and military control only about two-thirds of the country. In at least three states, drug gangs rule the highways and clandestine airstrips, with firepower greater than law enforcement's, said Cesar Caceres, a former adviser to the Security Ministry.

As a result, three-quarters of all U.S.-bound cocaine passes through the country's lawless outback in an illicit business that has led to an explosion of violence, which in some cities has reached epidemic proportions. Honduras has more homicides than any other country in the world with 91 per 100,000 people, the World Health Organization says.

The country is as poor as it is violent.

The national government is so broke it needs to borrow $100 million to pay its employees, including members of the electoral council, who say they can't issue complete results from last month's primary for 2013 presidential candidates until vote-counters are paid.

Two out of three Hondurans live in poverty, on less than $1.25 a day, and only a quarter of children complete middle school. Every day, hundreds of people give up on their homeland altogether to make the dangerous trek north to look for work in the United States.

Since Lobo's election, the U.S. government frequently has noted Honduran progress on national reconciliation and respect for human rights, while acknowledging continued problems with corruption and impunity.

But many Hondurans say their country's problems are more fundamental.

"Honduras is a weak state in a tremendous institutional crisis," said Hugo Noe Pino, who has served at times as finance minister, central bank president and Honduran ambassador to the United States. He called the country "ungovernable."

Jore Yllescas, a presidential commissioner for the Department of Revenue, concurred.

"Honduras is almost a failed state, incapable of solving its education or health problems, let alone justice, security or control of its own territory," Yllescas said. "I wouldn't dare to stay that it's reversible. I have no evidence to show that."

Long before political scientists began to talk of failed states, Honduras was known disparagingly as a "banana republic."

In the late 19th century, U.S. companies like United Fruit and Standard Fruit owned vast tracts of land and relied on the Honduran military to quell labor rebellions. The elites then formed the country's two major political parties in support of the fruit companies, cementing ties between Honduras' business and political interests, said Marvin Barahona, a historian at a Jesuit think tank in the capital.

With wealth concentrated in the hands of a few families, Honduras remained poor. Decades later, as U.S. aid poured into government coffers, many citizens complained that their country had been converted into Washington's client state, a base for the U.S. military and U.S.-backed Contras fighting the Sandinistas in neighboring Nicaragua.

But the status quo was fine with the oligarchy. Zelaya, a rich landowner from Olancho state, was one of them when he was elected president in 2006. When he began to move away from Washington towards Venezuela's leftist President Hugo Chavez, however, his opponents feared a populist threat. His proposal for a referrendum on changing the constitution was the last straw. He was booted out by leaders of his own party, backed by the army.

The U.S. suspended aid as a sanction for the coup, and in the ensuing political chaos, drug traffickers saw an opening.

"Direct flights from the Venezuela-Colombia border soared to runways in Honduras, and thus began a violent struggle for control of this drug corridor," according to the 2012 U.N. Office on Drugs and Crime report. The report estimates drug trafficking now accounts for about 13 percent of Hondura's gross domestic product.

Cocaine shipments are dropped in the Mosquito Coast region, bordering Nicaragua, then are moved through Olancho or Gracias a Dios states, converging on the border of Guatemala.

In high drug-trafficking areas, many people depend on the cartels, not the government, to provide jobs and services.

"We're like Colombia of the 1980s," said Caceres, the former Security Ministry adviser who now heads a security support program for the European Union in Honduras. "People linked to drug trafficking are seen by part of the population as benefactors, because of the inability of the state to offer solutions to their poverty."

Hondurans say corruption and crony politics have deprived state coffers of revenue thanks to politicians who enact laws to favor their own business interests.

For example, Tito Asfura, a city council member running for mayor of Tegucigalpa, holds the garbage collecting contract for the capital and sits on the corporation that renews the contract. Fast-food franchises proliferating in the city's many shopping malls and street corners get tax breaks for creating jobs that often pay less than minimum wage, or for promoting "tourism."

"The culture of tax evasion is amazing in Honduras," said Mario Lopez Steiner, the 16th director of the country's Department of Revenue in 18 years.

Since taking office in January 2010, Lobo has been under international pressure to fix the broken country. He brokered an agreement to let ousted former President Zelaya return to form his own political party, and tried to regain the trust of foreign investors.

Lobo proposed creating private cities with their own laws and authorities, arguing that the country's justice system didn't work. It was an attempt "to create a Honduras from scratch," said Octavio Sanchez, Lobo's chief of Cabinet. But the Supreme Court declared the move unconstitutional.

In a nation where people have to regularly dodge extortion attempts from police and daily violence, Lobo launched a program of background checks on police officers — a priority of the U.S. government, which gives Honduras about $100 million a year in aid.

Lobo's police reform sowed the seeds of the current confrontation. A constitutional court declared the purge unconstitutional because it did not include an appeals process for dismissed officers, and the full Supreme Court was expected to uphold the ruling. Before it could, congress voted to put the reform to a popular vote, and replaced the dissenting court members. The attorney general reacted immediately, saying he would consider prosecuting the congressmen who approved the ouster.

The Honduran constitution gives the president, judiciary and congress autonomous powers. Since the coup of 2009, and despite a subsequent truth commission report recommending the constitution be changed to allow for impeaching a president or a justice, little has changed.

Lobo interrupted all television programing on Thursday to call for a national dialogue with the country's key players, many of whom he accused of trying to oust him just a week ago, "to find a way out of this crisis."

Average Hondurans call it a power-struggle among the elites, and say they don't want to get in the middle of it.

"God help us, we don't want the chaos of another coup," said bus driver Moises Cruz. "The worst is that we're going through this crisis again because of all these politicians who only look out for themselves."

View the original article here

Read More

EU leaders promise further steps to quell crisis

BRUSSELS (Reuters) - European leaders agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis on Friday, a day after clinching a deal on banking supervision and approving long-delayed aid to Greece.

After more than eight hours of late-night talks at a summit in Brussels, leaders promised to push ahead with setting up a mechanism to wind down problem banks, although it was unclear when the facility would be completed.

They also launched tentative discussions on how to make countries stick to economic targets and on creating a "solidarity fund" to help member states suffering one-off economic shocks, but did not delve deeply into either issue, pushing the debate out to the middle of next year.

With officials concerned about complacency creeping into decision-making now that financial markets have calmed and the crisis seems less acute, leaders appeared intent on showing that they are not relaxing.

That said, no concrete decisions were taken at the summit. Instead, it was more about verbal commitments to push ahead.

"This evening we decided to put in place a single resolution mechanism," Herman Van Rompuy, the president of the European Council and chairman of the summit, told a news conference.

The European Commission will present a proposal on the mechanism, which would wind-up troubled banks by keeping the good parts alive while the unhealthy operations are shut down, during 2013, Commission President Jose Manuel Barroso said.

French President Francois Hollande told reporters the mechanism would "see the light of day" during the year, but it was not clear whether he expected it to be functioning by then or merely be in the early stages of construction.

"We agreed a roadmap for the future development of the currency union," said German Chancellor Angela Merkel, without going into detail about the discussions.

The two-day summit, the sixth and last of 2012, had only ever been intended to be a detailed discussion on how best to overhaul economic and monetary union and correct the problems that have fuelled three years of debt crisis.

The meeting was held just hours after EU finance ministers achieved a significant breakthrough in negotiations over a 'banking union' by agreeing that the European Central Bank would be made the chief supervisor of euro zone banks.

That decision, and another by euro zone ministers to release up to 50 billion euros in new aid to Greece, marked two positive developments after a long year of crisis-management and took some of the pressure off leaders to make major strides.

"CASSANDRAS"

ECB President Mario Draghi hailed the deal on banking supervision, the first stage towards a banking union with more pooled sovereignty, as an important step towards a stable economic and monetary union.

Under the deal, officials said the ECB would regulate some 150 to 200 banks directly - all major cross-border lenders and state aided institutions - with the power to delve into all 6,000 banks in case of problems.

Olli Rehn, the EU commissioner for economic and monetary affairs, said "Cassandras" who had predicted disaster for the euro and a Greek exit had been proven wrong.

But there is little time to relax. The next stages of banking union - creating a resolution fund for winding up troubled banks and coordinating deposit guarantees to protect savers - may be fought over even harder. And then there will be political and financial hurdles to negotiate through the year.

"The fact that the situation in the financial markets is now better than before should not be seen by the governments as a way to procrastinate," European Commission President Jose Manuel Barroso told reporters.

Much of southern Europe faces another year of grinding recession with record unemployment and deepening poverty that will tear at the fabric of wounded societies and may push governments' efforts to reduce deficits further off course.

With Silvio Berlusconi vowing to contest an Italian election early next year, a full bailout of Spain still on the cards and a German election in September casting a long shadow, 2013 promises to be the EU's fourth turbulent year in a row, even without risks from bailout victims Greece, Ireland and Portugal.

Italy is a particular concern if the next government rows back on any of the economic reforms put in place by technocrat Prime Minister Mario Monti, whose time in office has helped stabilize financial markets and stave off the crisis.

Several participants at a pre-summit meeting of center-right leaders in Brussels urged Monti to stand as a candidate in an election expected in February, but he gave no indication of his intentions, a person at the meeting said.

Many European leaders fear a return of the erratic billionaire Berlusconi, who abruptly changed course on Wednesday, saying he would step aside if Monti agreed to lead the center-right into the election.

(Additional reporting by Mark John, Rex Merrifield, Robin Emmott and Jan Strupczewski in Brussels, Madeline Chambers in Berlin and Gilbert Kreijer in The Hague; Writing by Luke Baker and Noah Barkin)

View the original article here

Read More

Gas shortage exposes Pakistan's energy crisis

ISLAMABAD (AP) — It has become a familiar sight across Pakistan in recent weeks: Long lines of cars and minibuses snaking for hundreds of yards as their frustrated drivers wait to fill up their tanks with natural gas.

The reason for the long lines is a pricing dispute involving the government and the Supreme Court that has caused many station owners to shut down their gas supply.

The crisis is a symptom of a much larger problem destined to cause drivers even greater pain in the future: Pakistan's demand for natural gas, and other forms of energy, is quickly outstripping supply.

"We have this problem that is growing bigger and bigger every year," said Khurram Husain, a Pakistani business journalist who's been following the natural gas crisis closely. "Each of the big consumers of natural gas is now vying with each other."

The government of former President Pervez Musharraf began promoting the use of compressed natural gas, or CNG, in private vehicles nearly a decade ago. The idea was to reduce the money the government spent on buying oil internationally and instead rely on Pakistan's domestic natural gas reserves.

So the previous government kept the price of CNG low, promoted the importation of equipment for cars to run on natural gas and rapidly gave out licenses to open stations. The use of CNG has an added benefit of being less polluting, since it tends to burn cleaner than gasoline.

Unfortunately for the current government, the policy was incredibly successful — and is unsustainable. Pakistan has 3.5 million private vehicles running on CNG, more than 80 percent of vehicles in the country and more than any other country in the world. But Pakistan's gas supplies can't support this demand while also feeding power plants, fertilizer companies and other businesses that rely on the fuel.

So officials are now grappling with the painful task of trying to reverse the policy, trying to wean cars back onto gasoline to redirect the limited supplies of natural gas to other sectors where they believe it will be more productive — power plants, for example. Pakistan already suffers widespread power outages in the summer in part because power plants don't have enough fuel to run.

And Pakistan's limited supplies are running out. According to the Minister of Petroleum, Asim Hussain, the country's two largest natural gas fields are expected to run dry by 2022. Officials are trying to draw international companies into developing the other fields in part by offering better terms than they have in the past when the government kept natural gas prices low.

Pakistan has been in talks with neighboring Iran to import natural gas through a pipeline that the Iranians are building on their side. But that plan has run into opposition from the U.S., which wants to keep pressure on Iran because of the country's nuclear program. Pakistan lacks the infrastructure to increase imports of natural gas.

Pakistan's energy consumption in general has grown 80 percent over the last 15 years, according to the Pakistan Institute for Petroleum. A big part of the energy crisis is dealing with massive inefficiencies in the system, such as huge numbers of customers who don't pay their bills and widespread theft and losses due to inefficiencies across the energy grid.

The latest crisis sprung up in October when the Supreme Court examined the pricing structure of gasoline and CNG and essentially determined station owners were making too much money. State regulators then drastically dropped the maximum price at which CNG station owners could sell their product.

As a result, at least 1,800 of the country's 3,395 CNG stations closed because they were unable to operate, said the chairman of the All Pakistan CNG Association, Ghayas Paracha. He said the government closed at least 800 more for various reasons such as not paying their bills.

That's when the long lines and frustration began.

School bus driver Feroz Ahmad in the southern port city of Karachi said he waits in line for CNG for up to four hours each time he goes to the pump. His minibus can also run on gasoline but that would be more expensive.

"I can't afford petrol because of the high price. I would have to increase the pickup and drop-off charges" for the children he takes to and from school, he said.

Before the recent price change, CNG cost about 30 percent less than gasoline. Before that, CNG was even cheaper in comparison, but the government had managed to bring CNG prices up bit by bit to wean consumers off it through a variety of means, including raising surcharges on station owners.

"We are the 27th largest producer of gas in the world, and we are number one in CNG cars. So either those 26 countries are mad or our policies are bad. And I think it is the latter," said Hussain, the petroleum minister, in an interview with The Associated Press. "We have wasted our gas, basically."

The CNG station owners have built up an infrastructure that spans the country and are fighting back. Paracha, the head of the CNG association, said if all the vehicles on the road started using gasoline instead of natural gas, there would be a huge increase in pollution, and it would be extremely expensive to import all the fuel.

"This will have a very, very bad impact on the economy," he said.

Most other countries that use natural gas for private vehicles have an abundance of natural gas, said Leslie Palti-Guzman, an energy analyst at the Eurasia Group. Iran, for example, also uses natural gas extensively for private vehicles in part because international sanctions on its nuclear program make it impossible to export natural gas.

Other countries tend to use it more for things like fleets of buses or taxis, Palti-Guzman said. Then they can reap the environmental benefits of using natural gas, which tends to burn cleaner than oil or coal, without having to build an entire network of CNG stations around the country.

But getting Pakistani drivers to use more expensive gasoline is politically difficult, especially with an election coming up soon.

Ask anyone in the lines in Pakistan's largest cities who is to blame for the current crisis and the list is extensive: the CNG station owners for allegedly gouging customers, the government for failing to keep prices in check, even the Supreme Court for failing to find a suitable compromise.

Few seem aware of the larger problem of Pakistan's rapidly dwindling natural gas supplies.

"I really don't know what's wrong with the gas supply," said Nayaz Khatak, a government worker in Islamabad waiting to fill up his car. "There is no shortage as such."

__

Follow Rebecca Santana on Twitter (at)ruskygal

__

Associated Press writers Adil Jawad in Karachi, Zaheer Babar in Lahore and Asif Shahzad in Islamabad contributed to this report.

View the original article here

Read More

Flailing Honduras in yet another political crisis

TEGUCIGALPA, Honduras (AP) — Members of the ruling party met behind closed doors, bartering all night for votes to depose four Supreme Court justices who had rejected the president's plan to weed out corrupt police. Ominously, soldiers and police surrounded the National Congress.

As the hours ticked by, representatives inside puffed on cigarettes in violation of their own anti-smoking laws and jokingly accused each other of vote-buying. Then shortly before dawn Wednesday, President Porfirio Lobo's National Party overwhelmingly and, many say illegally, approved the judges' dismissal.

That was a risky move.

"We don't know when we leave after the vote if there will be prosecutors waiting to detain us," admitted Sergio Castellanos of the Democratic Unification party, who voted with the majority. "Here you have to be ready for anything."

On global rosters of failing states, Honduras doesn't even crack the top 50, yet by many grim measures the troubled Central American republic is barely clinging to its status as a functioning country.

Three years after former President Manuel Zelaya was run out of office at gunpoint in his pajamas, Lobo is struggling. He has twice warned that his enemies are conspiring to oust him in a coup, and he then provoked a constitutional crisis with the judges' removal, an act that legal scholars describe as everything from an abuse of power to a betrayal of the country.

Political turmoil is but the latest trouble bedeviling Honduras. Even in the best of times, Lobo's government, police and military control only about two-thirds of the country. In at least three states, drug gangs rule the highways and clandestine airstrips, with firepower greater than law enforcement's, said Cesar Caceres, a former adviser to the Security Ministry.

As a result, three-quarters of all U.S.-bound cocaine passes through the country's lawless outback in an illicit business that has led to an explosion of violence, which in some cities has reached epidemic proportions. Honduras has more homicides than any other country in the world with 91 per 100,000 people, the World Health Organization says.

The country is as poor as it is violent.

The national government is so broke it needs to borrow $100 million to pay its employees, including members of the electoral council, who say they can't issue complete results from last month's primary for 2013 presidential candidates until vote-counters are paid.

Two out of three Hondurans live in poverty, on less than $1.25 a day, and only a quarter of children complete middle school. Every day, hundreds of people give up on their homeland altogether to make the dangerous trek north to look for work in the United States.

Since Lobo's election, the U.S. government frequently has noted Honduran progress on national reconciliation and respect for human rights, while acknowledging continued problems with corruption and impunity.

But many Hondurans say their country's problems are more fundamental.

"Honduras is a weak state in a tremendous institutional crisis," said Hugo Noe Pino, who has served at times as finance minister, central bank president and Honduran ambassador to the United States. He called the country "ungovernable."

Jore Yllescas, a presidential commissioner for the Department of Revenue, concurred.

"Honduras is almost a failed state, incapable of solving its education or health problems, let alone justice, security or control of its own territory," Yllescas said. "I wouldn't dare to stay that it's reversible. I have no evidence to show that."

Long before political scientists began to talk of failed states, Honduras was known disparagingly as a "banana republic."

In the late 19th century, U.S. companies like United Fruit and Standard Fruit owned vast tracts of land and relied on the Honduran military to quell labor rebellions. The elites then formed the country's two major political parties in support of the fruit companies, cementing ties between Honduras' business and political interests, said Marvin Barahona, a historian at a Jesuit think tank in the capital.

With wealth concentrated in the hands of a few families, Honduras remained poor. Decades later, as U.S. aid poured into government coffers, many citizens complained that their country had been converted into Washington's client state, a base for the U.S. military and U.S.-backed Contras fighting the Sandinistas in neighboring Nicaragua.

But the status quo was fine with the oligarchy. Zelaya, a rich landowner from Olancho state, was one of them when he was elected president in 2006. When he began to move away from Washington towards Venezuela's leftist President Hugo Chavez, however, his opponents feared a populist threat. His proposal for a referrendum on changing the constitution was the last straw. He was booted out by leaders of his own party, backed by the army.

The U.S. suspended aid as a sanction for the coup, and in the ensuing political chaos, drug traffickers saw an opening.

"Direct flights from the Venezuela-Colombia border soared to runways in Honduras, and thus began a violent struggle for control of this drug corridor," according to the 2012 U.N. Office on Drugs and Crime report. The report estimates drug trafficking now accounts for about 13 percent of Hondura's gross domestic product.

Cocaine shipments are dropped in the Mosquito Coast region, bordering Nicaragua, then are moved through Olancho or Gracias a Dios states, converging on the border of Guatemala.

In high drug-trafficking areas, many people depend on the cartels, not the government, to provide jobs and services.

"We're like Colombia of the 1980s," said Caceres, the former Security Ministry adviser who now heads a security support program for the European Union in Honduras. "People linked to drug trafficking are seen by part of the population as benefactors, because of the inability of the state to offer solutions to their poverty."

Hondurans say corruption and crony politics have deprived state coffers of revenue thanks to politicians who enact laws to favor their own business interests.

For example, Tito Asfura, a city council member running for mayor of Tegucigalpa, holds the garbage collecting contract for the capital and sits on the corporation that renews the contract. Fast-food franchises proliferating in the city's many shopping malls and street corners get tax breaks for creating jobs that often pay less than minimum wage, or for promoting "tourism."

"The culture of tax evasion is amazing in Honduras," said Mario Lopez Steiner, the 16th director of the country's Department of Revenue in 18 years.

Since taking office in January 2010, Lobo has been under international pressure to fix the broken country. He brokered an agreement to let ousted former President Zelaya return to form his own political party, and tried to regain the trust of foreign investors.

Lobo proposed creating private cities with their own laws and authorities, arguing that the country's justice system didn't work. It was an attempt "to create a Honduras from scratch," said Octavio Sanchez, Lobo's chief of Cabinet. But the Supreme Court declared the move unconstitutional.

In a nation where people have to regularly dodge extortion attempts from police and daily violence, Lobo launched a program of background checks on police officers — a priority of the U.S. government, which gives Honduras about $100 million a year in aid.

Lobo's police reform sowed the seeds of the current confrontation. A constitutional court declared the purge unconstitutional because it did not include an appeals process for dismissed officers, and the full Supreme Court was expected to uphold the ruling. Before it could, congress voted to put the reform to a popular vote, and replaced the dissenting court members. The attorney general reacted immediately, saying he would consider prosecuting the congressmen who approved the ouster.

The Honduran constitution gives the president, judiciary and congress autonomous powers. Since the coup of 2009, and despite a subsequent truth commission report recommending the constitution be changed to allow for impeaching a president or a justice, little has changed.

Lobo interrupted all television programing on Thursday to call for a national dialogue with the country's key players, many of whom he accused of trying to oust him just a week ago, "to find a way out of this crisis."

Average Hondurans call it a power-struggle among the elites, and say they don't want to get in the middle of it.

"God help us, we don't want the chaos of another coup," said bus driver Moises Cruz. "The worst is that we're going through this crisis again because of all these politicians who only look out for themselves."

View the original article here

Read More

NFL, teams offer support for players in crisis

KANSAS CITY, Mo. (AP) — Brady Quinn can't help but wonder whether he missed something in the final days of Jovan Belcher's life.

Could the Kansas City Chiefs' quarterback have listened better to his teammate? Could he have noticed a change in the linebacker's temperament? Did Belcher utter something under his breath that may have let on that he was capable of killing his girlfriend and himself?

"When you ask someone how they're doing, do you really mean it?" Quinn wondered. "When you answer back, are you really telling the truth?"

The murder-suicide last Saturday raised similar questions among players and coaches across the NFL. In an era in which physical safety is of paramount importance, it's become clear that ensuring the emotional well-being of the men who play the game is just as essential.

"The relationships you have with people face-to-face, on a daily basis, kind of get brushed aside for everything else that's out there," Quinn said. "A lot of times people hide their issues, their problems. They don't talk to anyone until it's too late."

This past July, the NFL established an emergency hotline that operates 24 hours a day and connects players, staff and family members in crisis with mental-health professionals who are not affiliated with the league or its teams. The group, which provides a similar service to the Veteran's Administration, is required to keep its conversations confidential unless the individual calling indicates they may harm themselves or others.

Robert Gulliver, the NFL's chief human resources officer, said "absolutely, players and staff are taking advantage of the opportunity" provided by the hotline.

Gulliver couldn't say whether Belcher had called, citing its confidentiality policy, and could not provide any data that indicates how much it is being used. But Gulliver did say that what happened to Belcher may cause the NFL to consider more offerings in the future.

"Mental health continues to be, in general society, an area that often has a stigma attached to it," Gulliver said. "We're trying to change that culture and break down that stigma and show people that mental is part of total health."

That stigma is pervasive in the NFL, where a macho culture has been long ingrained.

In numerous interviews with current and former players, The Associated Press found many who said they would refuse to seek support for various reasons. Maybe their issues would get back to their coaches and affect their playing time or their contracts. Maybe their teammates would view them differently.

Several players indicated that the same attitude that carried them to the NFL — that in some ways they are indestructible — makes it difficult for them to reconcile needing outside help.

"In all my years playing football, I've never really seen a guy come out and say he needed help with this or he was having issues with this," said Rams offensive tackle Wayne Hunter, who's in his ninth year in the league. "Guys, including myself, generally keep our personal issues to ourselves."

Hunter said that when he was with the Jets, he took advantage of a team psychologist who provided support. Otherwise, he leaned on teammates.

"It was nice to have another set of ears other than the team psychologist," Hunter said. "The psychologist analyzes and sometimes over analyzes — I'm talking generally speaking — and they give you what they think is a right answer. But going to a friend gives you another perspective, gives you his side and a more personal side."

Then there's the tight-rope between offering help and prying into personal lives.

"A football locker room is a microcosm of the rest of society," said Rams defensive lineman Chris Long. "When do you come up and help somebody out and when do you feel like you're intruding?"

Browns coach Pat Shurmur and Cowboys coach Jason Garrett both reminded players this week to seek help, whether their problems are with drugs and alcohol, their professional life or things happening at home.

"You have to make clear that there is no judgment involved," Garrett said. "We're not judging you. We're helping you. We're here to help."

The NFL has numerous programs to help players and personnel deal with everything from personal and family relationships to the proper use of firearms. They begin even before athletes play a single down in the NFL with symposiums at most college all-star games, and continue with the NFL scouting combine and a three-day rookie boot camp that is required of any player selected in the draft.

The NFL's security team often works with local and state law enforcement to address issues and questions that players have with guns. The league also has a mandatory life skills program for all players and coaches, along with a 12-week Rookie Success Program that first-year players must complete.

"The resources the league and the teams offer are always good," Chiefs offensive lineman Ryan Lilja said, "it's just up to guys to take advantage of it."

Too often, that doesn't happen.

"Literally, I said I'll get down on my hands and knees and beg you to do this because it's the most important thing there is," Garrett said. "There's no issue that you have in your life that we can't somehow solve in some way and in some way make it better. I just say that from the bottom of my heart, because you never know what guys are going through and you just want to let them know they have a place to turn."

Chiefs linebacker Derrick Johnson, who was close to Belcher, found himself asking in the days after the shootings whether there was something he could have done. Like Quinn, Johnson wondered whether his teammate was giving off signs that something was amiss in his personal life.

Ultimately, Johnson said, the shootings may serve as a wake-up call to people everywhere to put down their cell phones and start having real conversations.

"We need to talk to each other more as men, not as football players," he said. "Generally men don't talk about their feelings. They don't cry. They don't show their emotion. As a teammate, we have to do more."

___

AP Sports Writers Howard Fendrich and Schuyler Dixon, and freelance writer Jason Young contributed to this report.

___

Online: http://pro32.ap.org and http://twitter.com/AP_NFL

View the original article here

Read More