India wants fighter jets – but without American baggage (The Christian Science Monitor)

Bangalore, India – An Indian Air Force pilot dressed in a flight suit and sunglasses struts up to an F/A-18 flight simulator and a Boeing salesman engages.

“Your call sign must be Maverick,” says the Boeing agent, referencing "Top Gun," an ‘80s film probably older than this Indian jet jockey. “You look like Tom Cruise."

After a curt “no,” the Indian pilot asks to test out the machine. He lauds the F/A-18's maneuverability and touch-screen cockpit display. It's a far cry from what he currently flies: A Soviet MiG-21 that was outdated even in Maverick’s day. India is looking to buy 126 new fighter jets and Boeing is dogfighting against five international firms to land the deal this year.

IN PICTURES: World's Top 10 Military Spenders

Despite some of the sales tactics on display at the recent Aero India 2011 show in Bangalore, there’s more to selling fighter jets than moving Chevys. Giving "test-drives" and offering value for money is important, but so are international politics. And on that score, US firms have hurdles that European competitors do not.

Much is at stake for the American economy, including a $10 billion-plus sale and an estimated 35,000 new US jobs. Trips by presidents Barack Obama and George W. Bush to India have increased US chances of bringing home that bacon. But America’s not-so-humble foreign policies over the years may prove costly in an era of strong European competition in the defense industry.

“The quality of European airplanes today – for that matter the Russians, too – has now reached a point where countries like India really do have choices,” says Ashley Tellis, author of a study on the jet fighter tender for the Carnegie Endowment for International Peace. “In that sense, [US] political choices are more constrained than they were before.”

Think you know Asia? Take our geography quiz.

India's 'trust deficit' toward AmericaRetired Indian generals and industry analysts say Indian officials have two reservations about buying American.

First, New Delhi worries about relying on US parts given the sanctions Washington imposed in 1998 when India went nuclear. In case of a war with archrival Pakistan – a US strategic ally – would Washington curtail military trade again?

Second, US law requires defense agreements to be signed by any country purchasing certain high-tech military equipment. The US failed during Obama’s visit last year to get Indian sign-off on two such agreements: the Basic Exchange and Cooperation Agreement (BECA), and the Communication Interoperability and Security Memorandum of Agreement (CISMoA).

According to Mr. Tellis, the CISMoA would keep India from transferring sensitive US encryption technology to another country. The BECA, meanwhile, has been misunderstood as a deal that would plot Indian military units on a global grid visible to the US and its partners.

“The fact of the matter is that this is not true,â€

He and other analysts doubt the defense agreements will be central to Delhi’s decision on the fighters. But the suspicion about the agreements speaks to the lingering distrust of the US.

An Indian defense industry consultant who works with international firms and the Indian military says the Indians will only buy American for systems where there is no good competitor. The trust deficit, he says, comes not just from the 1998 sanctions, but US treatment of other friends.

IN PICTURES: World's Top 10 Military Spenders

Do European firms have less baggage?It’s a point other nations bring up.

Ravit Rudoy, marketing communications manager for Israeli firm Rafael Advanced Defense Systems Ltd., argues the US will be careful to ensure a military balance between India and Pakistan, while that concern is not shared by the one Russian and three European firms also vying for the fighter jet deal.

Tellis sees Europeans as more willing to provide equipment with no questions asked because their firms need foreign sales more to stay afloat. “The European market is so small, so they cannot afford to make their commercial products playthings of geopolitics.”

Representatives of Boeing and Lockheed Martin say international politics are not a hurdle for US firms here. Rick McCrary, Boeing’s lead on the jet fighter bid, points to the “ongoing, improving relationship” between Washington and New Delhi that has now spanned three administrations, both Republican and Democratic.

Obama builds goodwill toward US firmsMuch has changed since 1998, including the signing of a nuclear deal under Mr. Bush and the lifting of export restrictions on Mr. Obama’s recent visit, he adds.

Ramesh Phadke, a retired Indian Air Force officer, agrees that Indian suspicions about the US have diminished in recent years, signaled by some purchases of equipment.

“America maintaining a special relationship with Pakistan has always been a major factor in all decisions India has made with Americans, but it’s also been accepted up to a point,” says Air Commodore Phadke. “That does not mean that India likes it.”

Privately, one US executive who is not authorized to speak argues the defense agreements are a “barrier” for the American bids.

“The playing field isn’t level” with the Europeans, says the executive. “We’re perceived by the Indians as being heavy handed. If you actually read the language of the agreements they are not as intrusive as the Indians are making them out to be…. [But] they want a relationship on an equal footing.”

Obama has played to that desire by endorsing India’s bid for a permanent UN Security Council seat. And Tellis says the administration will continue to be accommodating if a US firm is a chosen as a finalist.

“I think the Obama administration will really do its utmost to make sure that whatever concerns India has both on a political and technical level are assuaged, because the US at this point for economic reasons really wants to see this deal.”

Think you know Asia? Take our geography quiz.

(Editor's note: The original article misidentified the nationality of firm Rafael Advanced Defense Systems Ltd., as well as the type of Boeing fighter jet at the Aero India 2011 show.)

View the original article here

Arab League sees grave situation and wants summit (Reuters)

CAIRO (Reuters) – The Arab League said on Saturday it was important that a March summit goes ahead in Baghdad due to what it described as "the grave, fateful developments" in the Arab world.

Libya, which holds the rotating presidency of the Arab leaders' summit, said this week that the Baghdad meeting would be postponed because of the situation in the region, where protests are challenging leaders from Bahrain to Algeria.

The presidents of Egypt and Tunisia have been toppled by mass protests this year.

A statement issued from the Arab League headquarters in Cairo said a formal request for the postponement of the summit had yet to be received by the body's general secretariat.

The summit is set for March 29.

"The general secretariat stresses the importance of the holding of the coming Arab summit on schedule," the League statement said.

Current circumstances required "the greatest degree of coordination and discussion to deal with the grave, fateful developments which the Arab region is going through," it said.

(Writing by Tom Perry; Editing by Peter Millership/David Stamp)

View the original article here

Baghdad wants U.S. to pay $1 billion for damage to city (Reuters)

BAGHDAD (Reuters) – Iraq's capital wants the United States to apologize and pay $1 billion for the damage done to the city not by bombs but by blast walls and Humvees since the U.S.-led invasion that toppled Saddam Hussein.

The city's government issued its demands in a statement on Wednesday that said Baghdad's infrastructure and aesthetics have been seriously damaged by the American military.

"The U.S. forces changed this beautiful city to a camp in an ugly and destructive way, which reflected deliberate ignorance and carelessness about the simplest forms of public taste," the statement said.

"Due to the huge damage, leading to a loss the Baghdad municipality cannot afford...we demand the American side apologize to Baghdad's people and pay back these expenses."

The statement made no mention of damage caused by bombing.

Baghdad's neighborhoods have been sealed off by miles of concrete blast walls, transforming the city into a tangled maze that contributes to massive traffic jams. Despite a sharp reduction in overall violence in recent years only 5 percent of the walls have been removed, officials said.

The heavy blast walls have damaged sewer and water systems, pavement and parks, said Hakeem Abdul Zahra, the city spokesman.

U.S. military Humvees, driven on street medians and through gardens, have also caused major damage, he said.

"The city of Baghdad feels these violations, which have taken place for years, have caused economic and moral damage," he said.

U.S. troops pulled out of Iraq's cities in June 2009 before formally ending combat operations last August. Around 50,000 remain in Iraq but they are scheduled to withdraw by year end.

Baghdad is badly in need of a facelift. Electricity and trash collection are sporadic, streets are potholed and sewage treatment plants and pipes have not been renovated for years.

Iraq has seen growing protests in recent weeks over poor government services.

Zahra said the city's statement issued on Wednesday would be the start of its measures to get the United States to pay for damages but he did not say what other steps might be taken.

(Reporting and writing by Aseel Kami; Editing by Jim Loney)

View the original article here

AP Exclusive: Berlusconi's Ruby wants compensation (AP)

ROME – The Moroccan teenager at the center of a prostitution scandal that has sent Italian Premier Silvio Berlusconi to trial says she has done nothing wrong and that "all the gold in the world" could not compensate her for the hurt she has suffered.

In an email exchange with The Associated Press on Wednesday and Thursday, Karima El Mahrough, who goes by the stage name Ruby, lamented that she has been "treated as a prostitute by all the Italian and foreign media."

"I WANT TO BE COMPENSATED for having been hurt so much and all the gold in the world would not be enough," she wrote to the AP.

Ruby, now 18, requested euro15,000 ($20,340) for a full TV interview, saying: "I don't do anything for nothing."

The AP, a nonprofit media organization, does not pay for interviews.

Berlusconi was indicted Tuesday on charges that he paid for sex with Ruby when she was 17 and under age, then used his influence to cover it up. The trial begins April 6 in Milan.

Berlusconi has denied ever paying for sex. Ruby, in a Jan. 19 television interview on a TV channel owned by Berlusconi, said she met the 74-year-old premier at a dinner party at his villa and that he gave her euro7,000 ($9,500) that evening, but never "put a finger on me."

The scandal broke last year when it emerged that Berlusconi had intervened on Ruby's behalf after she was accused of stealing euro3,000 ($4,100) from a friend and detained by Milan police.

Berlusconi's defense says the premier believed at the time that Ruby was a relative of then-Egyptian President Hosni Mubarak, and that the premier wanted to avoid a diplomatic incident. Ruby has said that she lied when she told Berlusconi this.

The AP does not name alleged victims of sexual crimes unless they have come forward publicly.

View the original article here

AP Exclusive: Berlusconi's Ruby wants compensation (AP)

ROME – The Moroccan teenager at the center of a prostitution scandal that has sent Italian Premier Silvio Berlusconi to trial says she has done nothing wrong and that "all the gold in the world" could not compensate her for the hurt she has suffered.

In an email exchange with The Associated Press on Wednesday and Thursday, Karima El Mahrough, who goes by the stage name Ruby, lamented that she has been "treated as a prostitute by all the Italian and foreign media."

"I WANT TO BE COMPENSATED for having been hurt so much and all the gold in the world would not be enough," she wrote to the AP.

Ruby, now 18, requested euro15,000 ($20,340) for a full TV interview, saying: "I don't do anything for nothing."

The AP, a nonprofit media organization, does not pay for interviews.

Berlusconi was indicted Tuesday on charges that he paid for sex with Ruby when she was 17 and under age, then used his influence to cover it up. The trial begins April 6 in Milan.

Berlusconi has denied ever paying for sex. Ruby, in a Jan. 19 television interview on a TV channel owned by Berlusconi, said she met the 74-year-old premier at a dinner party at his villa and that he gave her euro7,000 ($9,500) that evening, but never "put a finger on me."

The scandal broke last year when it emerged that Berlusconi had intervened on Ruby's behalf after she was accused of stealing euro3,000 ($4,100) from a friend and detained by Milan police.

Berlusconi's defense says the premier believed at the time that Ruby was a relative of then-Egyptian President Hosni Mubarak, and that the premier wanted to avoid a diplomatic incident. Ruby has said that she lied when she told Berlusconi this.

The AP does not name alleged victims of sexual crimes unless they have come forward publicly.

View the original article here

Baghdad wants U.S. to pay $1 billion for damage to city (Reuters)

BAGHDAD (Reuters) – Iraq's capital wants the United States to apologize and pay $1 billion for the damage done to the city not by bombs but by blast walls and Humvees since the U.S.-led invasion that toppled Saddam Hussein.

The city's government issued its demands in a statement on Wednesday that said Baghdad's infrastructure and aesthetics have been seriously damaged by the American military.

"The U.S. forces changed this beautiful city to a camp in an ugly and destructive way, which reflected deliberate ignorance and carelessness about the simplest forms of public taste," the statement said.

"Due to the huge damage, leading to a loss the Baghdad municipality cannot afford...we demand the American side apologize to Baghdad's people and pay back these expenses."

The statement made no mention of damage caused by bombing.

Baghdad's neighborhoods have been sealed off by miles of concrete blast walls, transforming the city into a tangled maze that contributes to massive traffic jams. Despite a sharp reduction in overall violence in recent years only 5 percent of the walls have been removed, officials said.

The heavy blast walls have damaged sewer and water systems, pavement and parks, said Hakeem Abdul Zahra, the city spokesman.

U.S. military Humvees, driven on street medians and through gardens, have also caused major damage, he said.

"The city of Baghdad feels these violations, which have taken place for years, have caused economic and moral damage," he said.

U.S. troops pulled out of Iraq's cities in June 2009 before formally ending combat operations last August. Around 50,000 remain in Iraq but they are scheduled to withdraw by year end.

Baghdad is badly in need of a facelift. Electricity and trash collection are sporadic, streets are potholed and sewage treatment plants and pipes have not been renovated for years.

Iraq has seen growing protests in recent weeks over poor government services.

Zahra said the city's statement issued on Wednesday would be the start of its measures to get the United States to pay for damages but he did not say what other steps might be taken.

(Reporting and writing by Aseel Kami; Editing by Jim Loney)

View the original article here

Baghdad wants U.S. to pay $1 billion for damage to city (Reuters)

BAGHDAD (Reuters) – Iraq's capital wants the United States to apologize and pay $1 billion for the damage done to the city not by bombs but by blast walls and Humvees since the U.S.-led invasion that toppled Saddam Hussein.

The city's government issued its demands in a statement on Wednesday that said Baghdad's infrastructure and aesthetics have been seriously damaged by the American military.

"The U.S. forces changed this beautiful city to a camp in an ugly and destructive way, which reflected deliberate ignorance and carelessness about the simplest forms of public taste," the statement said.

"Due to the huge damage, leading to a loss the Baghdad municipality cannot afford...we demand the American side apologize to Baghdad's people and pay back these expenses."

The statement made no mention of damage caused by bombing.

Baghdad's neighborhoods have been sealed off by miles of concrete blast walls, transforming the city into a tangled maze that contributes to massive traffic jams. Despite a sharp reduction in overall violence in recent years only 5 percent of the walls have been removed, officials said.

The heavy blast walls have damaged sewer and water systems, pavement and parks, said Hakeem Abdul Zahra, the city spokesman.

U.S. military Humvees, driven on street medians and through gardens, have also caused major damage, he said.

"The city of Baghdad feels these violations, which have taken place for years, have caused economic and moral damage," he said.

U.S. troops pulled out of Iraq's cities in June 2009 before formally ending combat operations last August. Around 50,000 remain in Iraq but they are scheduled to withdraw by year end.

Baghdad is badly in need of a facelift. Electricity and trash collection are sporadic, streets are potholed and sewage treatment plants and pipes have not been renovated for years.

Iraq has seen growing protests in recent weeks over poor government services.

Zahra said the city's statement issued on Wednesday would be the start of its measures to get the United States to pay for damages but he did not say what other steps might be taken.

(Reporting and writing by Aseel Kami; Editing by Jim Loney)

View the original article here

White House wants less gov't in mortgage system (AP)

By DANIEL WAGNER and DEREK KRAVITZ, AP Business Writers Daniel Wagner And Derek Kravitz, Ap Business Writers – Fri Feb 11, 11:48 pm ET

WASHINGTON – The Obama administration wants to shrink the government's role in the mortgage system — a proposal that would remake decades of federal policy aimed at getting Americans to buy homes and would probably make home loans more expensive across the board.

The Treasury Department rolled out a plan Friday to slowly dissolve Fannie Mae and Freddie Mac, the government-sponsored programs that bought up mortgages to encourage more lending and required bailouts during the 2008 financial crisis.

Exactly how far the government's role in mortgages would be reduced was left to Congress to decide, but all three options the administration presented would create a housing finance system that relies far more on private money.

"It's clear the administration wants the private sector to take a more prominent role in the mortgage rates, and in order for that to happen, mortgage rates have to go up," said Thomas Lawler, a housing economist in Virginia.

Abolishing Fannie and Freddie would rewrite 70 years of federal housing policy, from Fannie's creation as part of the New Deal to President George W. Bush's drive for an "ownership society" in the 2000s. It would transform how homes are bought and redefine who can afford them.

Treasury Secretary Timothy Geithner said the plan would probably not happen for at least five years and would proceed "very carefully." In the meantime, he said the companies would have the cash they need to meet their existing obligations.

"We think there's very broad consensus on the Hill and in the broader private market that there needs to be a transition to a much smaller role for the government," he said.

Ever since the housing market went bust and the country fell into a financial crisis, pressure has been building for the government to do away with Fannie and Freddie and reduce taxpayer exposure to risk.

Fannie and Freddie own or guarantee about half of all mortgages in the United States. Along with other federal agencies, they played some part in almost 90 percent of new mortgages over the past year.

The two agencies buy mortgage loans from primary lenders, pool them, and sell them with a guarantee that investors will be paid even if borrowers default. The idea is to give people a chance to buy homes at affordable interest rates.

But the two nearly collapsed in 2008, after the subprime mortgage market collapsed and defaults and foreclosures piled up. So far, they have cost taxpayers almost $150 billion and could cost up to $259 billion, the FHFA says.

The first option proposed by the administration would give the government no role beyond helping poorer and middle-class borrowers through agencies like the Federal Housing Administration, which provides insurance on mortgage loans.

The second and third options would give the government a role as an insurer of mortgages, and each would prompt mortgage companies to pass along fees to borrowers.

Under one, the government would step in to guarantee private mortgages during a severe economic downturn, such as another housing slump, but would provide limited support during normal times.

The third option would be more complex. The government would insure a targeted range of mortgage investments that already are guaranteed by private insurers — serving as a "reinsurance" broker to those financing companies. In the event the private insurers couldn't pay the owners of the mortgage investments, the government insurance would pay.

The third option would leave the government with the largest role and probably have the smallest impact on mortgage rates. While lenders would have to pay fees, which would ordinarily drive rates higher, the government guarantees would also make mortgages a safer investment. That would attract more private money and hold rates down.

"Compared to the way things operated in the past, credit would be a little less easy to obtain, and the terms would be a little less attractive," said Nigel Gault, chief U.S. economist with IHS Global Insight.

This option would face sharp opposition from lawmakers. They fear that private lenders would inevitably take on too much risk if they had the government as a backstop. Democrats and consumer groups said they feared mortgage rates would soar if the housing finance system were left mainly to the private market, and that fewer people could afford traditional 30-year, fixed-rate mortgages. Mortgage rates today are rising but are still some of the lowest ever recorded. The national average for a 30-year, fixed loan is about 5 percent.

The changes would be felt by nearly everyone who applies for a mortgage, from first-time homebuyers to middle-aged buyers trading up for a bigger house to older buyers scaling back to a smaller home, said Joseph Murin, a former president of Ginnie Mae, the government-owned corporation that guarantees bonds backed by home mortgages.

Gault said there is an upside to making housing a less attractive investment: People who can't afford houses would be less likely to buy them, and might rent instead. Bankers would presumably lend more carefully.

Removing those buyers from the market could cause home prices to fall, however — which would help first-time buyers but hurt those who already own homes.

By sending Congress three proposals instead of a single recommendation, the administration sidesteps a politically delicate task that the new financial overhaul law left undone.

It also put pressure on Republicans in Congress, who have blamed Fannie and Freddie for the financial crisis but have yet to offer a viable plan for reforming them. Democrats control the Senate, so any new policy would have to be approved by a split Congress.

Republicans praised the White House for at least starting a serious discussion.

Conservative Rep. Jeb Hensarling, R-Texas, criticized the report for lacking detail but said it moved the debate "from if to when and how we wind down any taxpayer commitments to Fannie and Freddie." Hensarling had pushed legislation last year to sharply reduce the government's role in the housing market.

"If the White House is truly signaling they are ready to do something, it could probably happen in a matter of months," he said in an interview.

The administration can take some steps immediately without Congress' approval. It could require bigger down payments for loans that get federal guarantees, bar Fannie and Freddie from buying mortgages that are too big, or increase the fees they charge.

Those steps would make a government-backed mortgage more expensive and draw more private money into the market.

"When the administration stops talking task forces and begins to flesh this out, you'll see significant private capital injected into the mortgage market," said Karen Shaw Petrou, who advises banks on government policy for Federal Financial Analytics.

___

Associated Press Writer Alan Fram contributed to this report.

View the original article here