Challenges at home and abroad


  • Letters
  • Sunday, 12 Jan 2003

By JOHAN FERNANDEZ

On Friday, North Korea announced it was withdrawing from the 1968 Nuclear Non-proliferation Treaty (NPT), blaming the United States for a vicious hostile policy and alleged nuclear threat. 

The treaty, which is the cornerstone of international efforts to prevent the spread of nuclear weapons, has been ratified by 188 countries, including Malaysia. 

North Korea, in making the announcement, said it would not develop nuclear weapons but added that future developments would depend entirely on the attitude of the US. 

Its UN Ambassador Pak Gil Yon said that North Korea planned to reactivate its nuclear reactor in the town of Yongbyon and complete construction of two other reactors for energy and electricity demands. 

North Korea said it would not work with the Vienna-based International Atomic Energy Agency (IAEA), which monitors member countries to ensure they keep to the NPT, and accused it of being a tool of the US in implementing hostile policies against it.  

Relations between Washington and Pyongyang have been strained ever since President George Bush included North Korea in his “axis of evil” along with Iraq, Iran and Syria. 

The most recent dispute came about in October when US officials said that the North had acknowledged it had a nuclear weapons programme that led to the US ending an earlier agreement to supply heating oil. 

The deal that was struck during the Clinton Administration in 1994 included the freezing of nuclear facilities at Yongbyon and the building of nuclear electricity generating plants. 

Things changed recently when the North removed the seals placed on the Yongbyon facility by the International Atomic Energy Agency (IAEA) and ordered the two inspectors to leave the country. 

North Korea’s withdrawal from the NPT should not come as a surprise as the United States Nuclear Posture Review (NPR) report released last year practically opened the door to other nuclear nations taking unilateral action to develop their own nuclear capabilities. 

While the US has gone aggressively against nuclear countries or those perceived to have such weapons, it has remained silent on other countries that have such weapons and capabilities. 

In fact, Malaysia’s Ambassador to the United Nations Tan Sri Hasmy Agam warned of this at the first session of the preparatory committee for the 2005 review conference of the state parties to the treaty on the non-proliferation of nuclear weapons at the UN on April 8, last year. 

Though he did not mention the US, he said that the NPR had placed a heavy strain on the viability of the Comprehensive Nuclear Test Ban Treaty (CTBT) and would undermine the consensus achieved in 2000 and place the treaty in jeopardy. 

Hasmy said the NPR challenged the very basis of the global effort towards the reduction and elimination of nuclear weapons. 

“Instead of propagating the principle of irreversibility, it advocates the retention and redeployment of many withdrawn warheads as part of the so-called ‘response force’ of nuclear weaponry. 

“It further rejects the CTBT and endorses a higher level of readiness for nuclear testing with the intention of allowing for the development of new nuclear weapons systems. 

“It also supports the ongoing search on low-yielding nuclear warheads and targeting techniques that would zero in on deeply buried targets.” 

Hasmy added: “This initiative will herald for the first time the actual use of nuclear weapons in military operations since Hiroshima and Nagasaki, with all the political and security repercussions that might entail.” 

The North’s stand of defiance is understandable as US Defence Secretary Donald Rumsfeld had said that if needs be, the US could fight two wars, Iraq and North Korea, at the same time. 

Since then, the US has taken a softer stance with Bush and State Secretary Colin Powell indicating repeatedly that the US has no hostile intent. 

The North has warned that any kind of sanctions taken by the Security Council or anywhere would be considered a declaration of war. 

While the US goes aggressively after Iraq for alleged weapons of mass destruction and chemical weapons, it is interesting to see how it handles the situation on the Korean peninsula.  

  • WHEN President Bush announced his economic stimulus package that proposed a big and new round of tax cut for individuals and small businesses, there was general optimism that there was something for everyone, though many doubted that it would create the much needed jobs. 

    His jobs and growth package will provide US$98bil of total tax relief over the next 16 months and US$670bil over the next decade to spur real overall economic growth. 

    Since outlining the plan, there has been an increasing number of dissenting voices, including from among the Republican Party. 

    While one Republican senator said he would vote against the package, four others said there needed to be changes to the plan if they were to vote for it. 

    The President’s tax plan is said to favour the rich, a study by a research group in Washington showed. Citizens for Tax Justice, using government tax data, said that nearly half of the tax benefits would go to the wealthiest 10% of taxpayers with the wealthiest 1%, who earn an average of US$1mil a year, paying US$32,000 less in taxes. 

    The abolishing of dividend taxes has raised some questions as the plan overlooks more than 40 million who put their money in retirement plans. 

    Neither the money set aside nor the dividends that accumulate are subject to any tax until the person withdraws the money after reaching retirement age. The person making the withdrawal will pay the government taxes as ordinary income, regardless whether it was money from dividends, stock market profits or the person’s original contribution. 

    In other words, people who buy stocks and accumulate dividends in a tax-deferred retirement plan will eventually be taxed on those dividends, while the much smaller number of people who pay big taxes will get the new break. 

    According to an analysis by Bloomberg, Bush himself would save US$44,500 in income and dividend taxes on the US$711,000 in taxable income he reported in his 2001 return had the plan been enacted last year. Vice-President Dick Cheney would have saved US$326,555 on 2001 taxable income of US$4.3mil. 

    Last year, Bush passed his US$1.3tril tax cut with the support of 12 Democrats but this time around he may not get their support besides losing a few from his own party. 

    It looks like Bush has his hands full both at home and on the international front.  

    Johan Fernandez is Editor, North America Bureau, based in New York (e-mail: johan10128@aol.com ) 

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