Gloves off in Lebanon

New clashes between the government and Hizbullah

Lebanon has taken another lurch towards civil war, following the most serious conflict thus far between the government of Fouad Siniora, the Western-backed prime minister, and the opposition, which is led by Hizbullah, the Shia political and military movement backed by Iran and Syria. Developments in Lebanon could have significant regional implications, as any move by Hizbullah to extend its physical control over large parts of the country, notably including Beirut's international airport, would be likely to elicit a strong reaction from Israel and from pro-Western Arab states. Hizbullah's leader, Sayed Hassan Nasrallah, has reiterated his assurance that the group will not use its weapons against other Lebanese parties, but the scope for any political resolution of the conflict has perceptibly narrowed.

Hizbullah and its principal ally, the Free Patriotic Movement (FPM) of Michel Aoun, a Christian former army commander, started their campaign against the Siniora government at the end of 2006, with the ostensible aim of forcing a redistribution of executive power in favour of the parliamentary minority. Behind this argument about cabinet seats lay a number of bigger questions: the position of the Shia in the Lebanese political system; the role of Hizbullah's armed forces; Syria's interest in reasserting control over Lebanon and in subverting the operations of the tribunal on the assassination of Rafiq al-Hariri, a former prime minister; and Iran's ability to project its influence through regional allies. ...

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[Source: The Economist: News analysis

Biggest grain exporters halt foreign sales

By Javier Blas in London, Isabel Gorst in Moscow and Lindsay Whipp in Tokyo, Financial Times, 16 Apr 2008

The global food crisis intensified on Tuesday as Kazakhstan, one of the world's biggest wheat exporters halted foreign sales and rice prices shot to a record high after Indonesia stopped its farmers from selling the grain abroad.

In another sign of turmoil, a big food company in Japan, Nihon Shokuhin Kako, said high corn prices had forced it to buy cheaper genetically modified corn for the first time, breaking a social, though not legal, taboo and signalling that opposition to GM foods could weaken in the face of record food prices.

Meanwhile, fresh wheat export curbs in Kazakhstan, the world's fifth largest exporter, and the rice bans in Indonesia, threaten to trigger bans in other food exporting countries, which will now face much higher demand from importing countries.

Hussein Allidina, at Morgan Stanley in New York, said pressure for export bans was likely to increase elsewhere as developing countries suffering high inflation tried to combat rising local prices by cutting back on exports of agriculture commodities.

Indonesia – which joins Vietnam, Egypt, China, Cambodia and India in banning foreign sales – was expected to export the grain this year due to a bumper crop. Corn futures prices in Chicago last week hit a record $6.16 a bushel, up 30 per cent in the past three months.

Indonesia's export ban boosted the price of rice futures in Chicago to a all-time high of $22.17 per 100 pounds, up 63 per cent since January. Wheat prices moved higher to $9.11 a bushel and traders warned prices could rise further as the Kazakhstan ban together with restrictions in Russia, Ukraine and Argentina have closed a third of the global wheat market.