International Herald Tribune

SODERLING RIDES THE SHOCK WAVE

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International Herald Tribune THE GLOBAL EDITION OF THE NEW YORK TIMES

WEDNESDAY, JUNE 3, 2009

GLOBAL.NYTIMES.COM

U.S. inquiry faults Afghan airstrikes WASHINGTON

Airmen failed to follow rules in civilian bombing, military concludes

BY ERIC SCHMITT AND THOM SHANKER

GLENN HUNT/OCULI

A Rio Tinto mining operation. Chinese companies’ proposed investments in Rio Tinto and other parts of Australia’s storied mining industry have stirred a rise in Australian nationalism.

Growing unease about life in China’s shadow SYDNEY

Australia starts to turn against Beijing’s shopping spree in mining industry

BY MICHAEL WINES

If outlanders tend to associate Australia with kangaroos, broad-brim leather hats and an opera house, many Australians are different. They think of iron ore and bauxite, copper and coal, nickel, gold and uranium, a trove of mineral riches that is the bedrock of their na-

tion’s prosperity.

Which explains much of the breastbeating that has ensued since the Chinese announced plans this year to buy a chunk of the industry.

Since three state-owned Chinese companies said they would buy stakes in Australia’s storied mining industry totaling $22 billion, some Australians have reacted with aggrieved nationalism.

The government of Prime Minister Kevin Rudd, which generally favors the sales, has been savaged as naĂŻvely cozy with China. Opposition politicians have flogged the specter of an Australian future more or less as a giant mine in

which the locals toil and Beijing takes the profit. ‘‘It’s the Communist People’s Republic of China, 100 percent Communistowned, buying up sections of the country and minerals in the ground which they will then sell to the Communist People’s Republic of China,’’ said Barnaby Joyce, who leads the splinter National Party in the Australian Parliament.

But nearly three months after the first of the deals was announced, the jerking of knees has slowed, and a different queasiness has arisen: An uncertainty over whether Australia’s place in Asia, anomalous but secure for so long, is about to be altered by the new Chinese

giant on its horizon.

Australia is not alone. From the Philippines to Vietnam to South Korea, China’s neighbors are recalculating the benefits — and potential deficits — of life in the shadow of a newly dominant nation.

Australia has always been the West’s outpost in Asia. But China has quickly become Australia’s biggest trading partner, one of its biggest tourism customers, the largest single buyer of its government debt, a major buyer of farmland and real estate. China’s hunger for steel gobbles up half of Australia’s iron ore exports, and its textile factories buy more than half of Australia’s wool. More than AUSTRALIA, PAGE 0

A U.S. military investigation into the May 4 aerial bombing in western Afghanistan that killed dozens of Afghan civilians has concluded that some airstrikes were carried out in error by American personnel who did not fully follow rules designed to prevent civilian casualties, according to a senior American military official.

The senior official said the civilian death toll would very likely have been reduced if American air crews and forces on the ground had followed the guidelines, because at least some of the more than a dozen air strikes over a seven-hour period by three U.S. Navy FA-18 aircraft and a U.S. Air Force B-1 bomber would have been aborted.

In one instance, an aircraft was cleared to attack Taliban fighters but had to circle back and did not reconfirm, leaving open the possibility that the militants had fled or that civilians had entered the target area in the intervening minutes, the military official said.

In another case, a compound of buildings from which militants were firing at American and Afghan troops was struck in violation of rules that put highdensity village dwellings off limits, the official said. ‘‘In several instances where there was a legitimate threat, the choice of how to deal with that threat did not comply with the standing rules of engagement,’’ said the military official, who provided a broad summary of the report’s initial findings on the condition of anonymity because the inquiry was not yet complete.

PARIS

BY NICOLA CLARK, CAROLINE BROTHERS AND DONALD G. MCNEIL JR.

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Three of the 228

Arthur Coakley of England, left, was among those on the Air France flight that disappeared over the Atlantic Ocean after taking off from Brazil. Dr. Aisling Butler, center, and Eithne Walls, both of Ireland, were also on the flight. PAGE 3

REPORT, PAGE 4

The prospect of a dismal performance in elections Thursday for the European Parliament and for local councils in Britain has added to the ferment in the governing Labor party, fueling expectations that Prime Minister Gordon Brown will announce a major cabinet shuffle after the election results are known.

According to a welter of reports in leading British newspapers quoting unidentified officials at 10 Downing Street and within the Brown cabinet, Mr. Brown has been weighing changes in some of the most powerful posts in the government as part of a political maneuver aimed at restoring Labor’s sinking fortunes.

Senior ministers thought to be vulnerable to being moved to other posts — or to leaving the government altogether — are said to include the chancellor of the Exchequer, Alistair Darling; the home secretary, Jacqui Smith; the transport secretary, Geoff Hoon; and the communities secretary, Hazel Blears, according to these reports. Some reports have suggested a still wider shakeup, affecting as many as a dozen ministers.

All four of the senior ministers named in the speculation have been caught up, to one degree or another, in the scandal that has developed around the abuse of second-home expenses among members of the House of Commons. More than 200 of the 646 members of Parliament have been featured in three weeks of day-by-day disclosures in The Daily BRITAIN, PAGE 3

enigma: how a well-maintained modern jetliner, built to withstand electrical and physical buffeting, could have gone down silently and mysteriously. ‘‘It’s like something from ancient history,’’ said Paul Hayes, director of acci-

dents and insurance at Ascend, an aviation industry consultant in London.

There was little hope that any of the 228 people on board would be found alive, and the air force spokesman, Col.

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Iraqis at odds over U.S. role

Euro-area unemployment 9.2%

David Brooks

The United States is walking a fine line between persuading its friends in Iraq of continued support while convincing its skeptics that Americans troops really will leave the country. But as a recent spate of bombings prove, there’s still a lot of work to do in Iraq. PAGE 2

The E.U. statistics office released data Tuesday for April which indicated that nascent signs of economic recovery had yet to be felt in the Continent’s labor market. PAGE 15

The Obama plan for General Motors is bureaucratically smart and financially tough-minded, but it won’t revolutionize G.M.’s corporate culture. PAGE 9

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would be ‘‘essential to our credibility.’’ The commander, Lt. Gen. Stanley A. McChrystal, said American success should be measured by ‘‘the number of Afghans shielded from violence,’’ not the number of enemy killed. General McChrystal said strikes by warplanes and Special Operations ground units would remain essential, but he pledged to make sure that these attacks would

said in a televised address reported by news agencies.

Working through the night, ships and aircraft have been hunting for signs of the aircraft, an Airbus A330-200, as investigators grappled with a devastating

Full currenc y rates Page 19

M 00132 603 F: 2,50 E

Cabinet changes likely after local council vote and E.U. assembly ballot

BY JOHN F. BURNS

An airplane seat cushion, a life jacket, some white pieces of material and signs of fuel were the only clues found in the Atlantic on Tuesday by Brazilian military planes searching for traces of a lost Air France jet.

The debris were sighted almost 1,000 kilometers, or about 600 miles, off Brazil’s northern coast and about 650 kilometers northeast of the Brazilian island of Fernando de Noronha, roughly along the planned flight path of Air France Flight 447 from Rio de Janeiro to Paris, a Brazilian Air Force spokesman

MARK WILSON/GETTY IMAGES-AFP

Lt. Gen. Stanley A. McChrystal on Tuesday.

Labor Party anxiety runs high as 2 elections near LONDON

Amid scattered plane debris, no clues to sudden demise

The report’s findings, which are expected to be made public in coming days, will almost certainly give a new boost to critics who complain that American forces in Afghanistan have sometimes acted indiscriminately in calling in airstrikes, jeopardizing the U.S. mission by turning civilians against American forces and their allies, the Afghan government.

An earlier American military inquiry concluded last month that 20 to 30 civilians might have been killed in the May 4 attacks, in the western province of Farah, far fewer than the 140 killed claimed by the Afghan government.

That inquiry also determined that 60 to 65 Taliban militants had been killed. The Afghans say all dead were civilians.

On Tuesday, the U.S. Special Operations general nominated to command American and allied troops in Afghanistan warned that victory would be ‘‘hollow and unsustainable’’ if it led to resentment among the country’s citizens and said that avoiding civilian casualties

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Pakistan frees Mumbai suspect The leader of a banned Islamic group suspected of involvement in the Mumbai attacks was released. PAGE 5

PLANE, PAGE 3

Next trick for U.S.: GM exit Now that the U.S. is a reluctant majority shareholder in G.M., President Barack Obama said his aim is ‘‘To get G.M. back on its feet, take a hands-off approach and get out quickly.’’ PAGE 16

SMOOTHING A DIPLOMATIC INCIDENT

A solution to the absence of Queen Elizabeth II at D-Day commemorations: Send Prince Charles instead. PAGE 3

ONLINE STAN HONDA/AFP

Big job and little time at G.M. Whether the carmaker can retool itself as a smaller entity will dictate the future of its chief, Fritz Henderson. PAGE 16

Cigarettes without the smoke E-cigarettes have become a popular stop-smoking aid in the United States, but they remain unapproved and virtually unstudied. global.nytimes.com/us

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| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

page two Push to put pressure on kleptocrats Celestine Bohlen L ET T ER F R O M EU ROPE PARIS When the playboy son of Equatorial Guinea’s president bought a $35 million house in Malibu, California, in 2006, his neighbors, who included the actor Mel Gibson and the singer Britney Spears, barely blinked.

They might have taken a closer look — as leaders in Washington and capitals around the world will have to if they are serious about wanting to stop mysteriously wealthy rulers of impoverished lands from stashing loose cash in their countries. Here are a few things the residents of Malibu might want to know about Teodoro Nguema Obiang This kind of Mangue, the guy corruption now living next door. has been on At 38, he is paid display in the $4,000 a month as United States minister of agriculture and forestry. and Europe That hardly finances for years. a lifestyle spread across three continents with property in South Africa, as well as California, and a fleet of cars, mainly in Paris, worth $6.5 million.

This kind of excess could be hard to tolerate in a Wall Street executive. It is all the more glaring from a member of the ruling family of a small coastal African country where three-quarters of the 500,000 inhabitants live below the poverty line, the infant mortality rate is 92.3 per thousand and most people have no clean water or health services.

Equatorial Guinea has undergone an oil boom in recent years which — on paper — has produced the highest per capita income in Africa. So little has trickled down so far that the wealth more likely explains young Mr. Obiang’s purchase in Paris of a Bugatti Veyron 16.4 sports car for ¤1 million, or $1.4 million. This kind of conspicuous corruption has been on display in the United States and Europe for years.

Think of the Florida villas belonging to Central American dictators or the London townhouses owned by Middle Eastern potentates.

But the world has changed in the last year. Now everybody is clamoring for more transparency and accountability from chief executive officers, regulators and British members of Parliament.

That same scrutiny should be applied to corrupt rulers wherever they are. First, their assets should be exposed, as happened recently in France; their access to the international finance system should be blocked; and in the best-case scenario, their money returned to the countries from which it came.

Like any idea whose time has arrived, this one has popped up in several places, with different solutions floating around, all worth pursuing.

One of them, put forward by Global

Witness, an anti-corruption group based in London, calls for better regulation by international banks, which often fail to do due diligence on highranking or flush clients.

Existing rules designed to block money laundering and terrorist financing may be enough, but bankers must do more to check up on clients with connections to known shady regimes, says Anthea Lawson, a Global Witness campaigner, who testified last month before the U.S. House Committee on Financial Services.

Identifying those regimes isn’t rocket science: One red flag is lack of transparency, particularly in resource-rich countries like Equatorial Guinea, Russia and many others, where profits are easily hijacked by the ruling elite. A second proposal, now pending in the U.S. Congress, would force oil companies and other commodity producers to report all payments to host governments on a country-by-country basis.

The argument has been ignored for too long. Billions of dollars in Western aid to many of the world’s poorest countries could be saved if revenue from the export of valuable resources went into the local economy, not the pockets of rulers. A third approach is to apply the ‘‘Anti-Kleptocracy Initiative,’’ which President George W. Bush in 2006 promised would identify ‘‘critical tools to detect and prosecute corrupt officials around the world.’’ This initiative, like the 2004 presidential proclamation that allows the United States to block visas for certain foreign officials, needs vigorous resuscitation.

There are many reasons why this is a good moment to go after kleptocrats.

One is the recent global financial meltdown, which brought home the need for banks to be more open about the risks they take and the customers they accept. Then, there is the pledge taken by the Group of 20 nations to crack down on tax havens, where tax evaders and dictators get to hide behind banking secrecy.

In France, anti-corruption groups are hoping for a breakthrough with a lawsuit, now heading for the Court of Appeals, that charges three sitting African leaders with misuse of public funds.

The case, brought by Transparency International’s French chapter and the Association Sherpa, could end in the restitution of the pilfered money to the citizens of Gabon, Congo and Equatorial Guinea.

The French lawsuit has already shone an unkind light on the breathtaking wealth, totaling ¤160 million, held in France by the three presidents and their families. Details about the 15 Paris properties, 10 luxury cars and 70 French bank accounts held by the family of President Omar Bongo, Gabon’s president since 1967, have already put him on the defensive: He ‘‘temporarily’’ suspended his duties as head of state on May 7, before going to Spain — not France — for cancer treatment. ‘‘Naming and shaming’’ will almost certainly not be enough.

The next step will require diplomatic backbone both in France, which has a long history of coddling favored African leaders, and in the United States, where geopolitics — and oil — can forgive a lot of sins. In 2006, when young Mr. Obiang was buying the Malibu mansion, his father, President Teodoro Obiang Nguema Mbasogo, in power since 1979 and long shunned internationally for human rights abuses and impropriety, was welcomed in Washington as a ‘‘good friend’’ by Secretary of State Condoleezza Rice.

It may be time to put that kind of friendship to the test. (BLOOMBERG) E-MAIL

MOHAMMED AMEEN/REUTERS

A U.S. soldier walking past a resident on Tuesday while on patrol in Samarra. Some Iraqis think U.S. troops will never leave, while others think they are going to abandon them.

Iraqis at odds over role for U.S. BAGHDAD

With little agreement on anything, country struggles to stabilize

BY ALISSA RUBIN AND ROD NORDLAND

Among Iraqis there are two conflicting views of U.S. policy: The American military is leaving too soon, or the American military is never going to leave.

Persuading its friends of continued American support while convincing its N E W S A N A LY S I S

skeptics that the Americans really will go is the challenge faced by the recently installed American ambassador, Christopher Hill. He takes office at a time of profound change in the American footprint here, the end of an era of military occupation and the beginning of an era of civilian diplomacy. ‘‘The key thing is to ensure a successful hand-off from the military to the civilians and to make sure the Iraqis see that

not as a reduction of U.S. influence or interest, but simply a change in how we present ourselves in this country,’’ he said Saturday, describing his mission in an interview with The New York Times.

Or, as Joost Hiltermann, an experienced Iraq analyst with the International Crisis Group, put it: ‘‘Hill’s role is to close the door softly and not to make a bang so that the whole house collapses.’’ Many Americans view Iraq as yesterday’s war, and some have started calling Iraq a ‘‘post-conflict’’ society. But as Mr. Hill noted, it is still hard to use the word ‘‘normal’’ and ‘‘Iraq’’ in the same sentence. There are more than 120,000 U.S. soldiers here; 24 died this month, the most since last September, according to icasualties.org, a Web site that tracks military casualties. One of Mr. Hill’s first public statements was an announcement of the death of two embassy staffers who were killed by a bomb on May 25.

The problem faced by Mr. Hill and the Obama administration is that the shooting is not over, and if Iraq turns sour again, it will be on their watch and there will not be a Bush administration to blame. Although Americans might wish otherwise, Iraq is not yet a stable society or a united country — or even a

pagetwo@iht.com

IN OUR PAGES - 100, 75, 50 YEARS AGO 1909 Keiser to Visit Tsar This Month

According to the latest news

(June 2), the Keiser will embark at Kiel on the Imperial yacht Hohenzollern on June 11 to meet the Emperor Nicholas.

The meeting will take place either at Reval or off the Finnish coast on June 17.

This is here regarded as a political interview of the first importance, forecasting a return of Russia to old time policy of friendship with Germany. This will be further cemented by a substitution of M. Goremykin in place of M. Izvolsky, who, according to a Russian report, has been pensioned off and given the well-known house on the Elagin Island, which forms the summer residence of Russian Ministers of Foreign Affairs.

1934 Sun Sears 2 Continents

With the drought conditions rapidly becoming world-wide the situation yesterday (June 1) found: — Two thirds of the United States sweltering under torrid heat, with weather officials holding out no prospects of relief from the drought which has spread ruin in middle and northwestern states. — Serious crop damage in wheat-producing provinces of Southern Canada. — Bread prices rising steeply in Russia as wheat crops wither under a scorching sun. — Germany faced with crop failure unless rain falls within a few days. — Balkan peasants reviving ancient pagan ‘‘rain making’’ rites after three

months of extensive drought and heat. — Widespread water shortage in England. — Crops damaged over wide area in France as heavy storms break the drought.

MOISES SAMAN FOR THE NEW YORK TIMES

The recently installed American ambassador, Christopher Hill, in his office in Baghdad. Mr. Hill has the difficult job of fostering peace in Iraq so that American troops can withdraw.

place where the citizens agree on the form of government.

Just last week, Iraqi newspapers reported that Grand Ayatollah Ali Sistani, the influential Shiite religious leader, said that the next parliamentary elections would be a chance for Iraqis to choose what form of government they want, suggesting that even such basic decisions as whether they want a Shiitedominated government or one in which positions are held by people regardless of sect and ethnicity, was still up for grabs.

Sunnis have not yet been integrated politically into Iraq’s power structure, nor have secular political forces. Both harbor profound doubts about the government’s intentions and its willingness to share power with them. Sunni suspicions have deepened with the recent arrests of leaders of the Awakening movement, some of whom are former insurgents who switched sides, at huge risk to themselves and their families, to fight alongside the Americans and the Iraqi government.

Many see recent moves by Prime Minister Nuri Kamal al-Maliki as a dangerous attempt to increase his power. One example is the creation of an anti-terrorism task force attached to his office, with a judge on stand-by to issue arrest warrants on his orders of those of his cabinet. The last thing the Americans want is to go down in history as having waged a messy war that in the end just replaced a Sunni dictator with a Shiite one.

Iraqis agree on very little these days, not least of all on what kind of relationship they want with the United States.

Some distrust its promise that it will withdraw its troops; others view that same promise as a betrayal and abandonment.

Many Iraqis who worked for the Americans, whether military, contractors or even journalists, feel their own society rejects them because of that. More than 2,000 have already taken advantage of a fast-track visa program for Iraqi refugees who need to prove little more than an association with an American employer. Several thousand more are already standing in line for the visas. ‘‘I can never live in Iraq again,’’ said a young man whose pseudonym is Sami,

an army interpreter who began working for Americans when he was only 17 in 2003, and will soon receive his visa to leave. ‘‘I am a dead man in Iraq, I have no future in Iraq. All sides hate the ‘terps,’ even the Iraqi government side, because they blame us for all the humiliations they got from American soldiers, and we had to translate for them.’’ Followers of the Shiite cleric Moktada al-Sadr hold the opposite view. They say they are convinced the Americans will never leave. Some even believe the recent bombs in poor Shiite neighborhoods are the work of the Americans, a plot to give them an excuse for staying.

In a February 2009 poll taken for the BBC, ABC and the Japanese television network NHK, 46 percent of Iraqis, a plurality, thought that the Americans

‘‘Hill’s role is to close the door softly and not to make a bang so that the whole house collapses.’’ should leave before 2011, and 60 percent thought that the Iraqi security forces were already prepared in February to maintain security without American forces. ‘‘We can’t trust Americans any more,’’ said Bahaa al-Araji, a member of Parliament’s Law Committee and another Sadrist. ‘‘There have been previous hand-overs but Americans continue to run things.’’ It is doubts like those that have made the Americans realize they must prove to Iraqis that they will honor the terms of the security agreement they hashed out in November, demanding withdrawal of combat troops from the cities by the end of this month, and complete military withdrawal by the end of 2011.

Mr. Hill tries to assure friends and skeptics alike. ‘‘What we’re trying to do here is make the Iraqis understand we will fulfill the letter of the security agreement,’’ said Mr. Hill as he sat in his office in the heavily garrisoned American Embassy deep in the fortified Green Zone.

As the three wartime ambassadors who preceded him found, nothing in Iraq has ever been easy.

1959 No Vatican Wedding Pope John XXIII helped to

pacify a bitter dispute in Belgium by agreeing today that Prince Albert of Liege’s wedding to an Italian princess should be held in Brussels instead of Vatican. This sudden totally unexpected change in the wedding plans of King Baudouin’s younger brother was occupied with another unique event: the monarch’s first press conference with Belgian reporters. Together these two developments indicated that a new chapter has opened in Baudouin’s eightyear-old reign. At his press conference, the King thanked the people of Brussels for the tumultuous welcome they gave him yesterday on his return from the United States. His words of gratitude — ‘‘I was terribly touched’’ — had the effect of making the city feel that its gesture of affection had not been in vain. At the same time he expressed warm feelings toward the United States. He gently corrected a Belgian newspaper woman who asked whether he had not found the Americans to be excessively materialistic. ‘‘They did not seem too materialist to me,’’ he replied. ‘‘I would say rather that they are an idealistic people.’’

In Mideast, Obama to face a hard sell on Israel issue CAIRO

BY MICHAEL SLACKMAN

President Barack Obama starts his much anticipated Middle East tour on Wednesday in Saudi Arabia, where he is expected to press the Arab states to offer a gesture to the Israelis to entice them into accelerating the peace process.

But when he meets in Riyadh with King Abdullah, Saudi officials and political experts say, he should be prepared for a polite but firm refusal, because the Arab states are convinced that they have made enough concessions already.

It is up to Israel to make a gesture, they say, perhaps by dismantling settlements in the West Bank or committing to a two-state solution. ‘‘What do you expect the Arabs to give without getting anything in advance, if Israel is still hesitating to accept the idea of two states in itself?’’ said Muhammad Abdullah al-Zulfa, a historian and member of the Saudi Shura Council, which serves as an advisory panel in place of a Parliament.

While not dismissing the possibility of some movement on the peace process, the Saudis say the Arab world made substantial concessions in the Arab Peace Initiative, which was endorsed by a 22-nation coalition during an Arab League summit meeting in Beirut in 2002. That proposal offered full recognition of Israel in exchange for Israel withdrawing to its 1967 borders and agreeing to a ‘‘just settlement’’ to the issue of the Palestinian refugees.

The Saudis are concerned about the potential threat to the coalition should one nation make further concessions on its own. That, they say, could provide the less committed countries a rationale for abandoning the peace initiative, according to officials and regional analysts. ‘‘Any unilateral decision from any Arab head of state will shred the Arab world and tear its ranks because there will always be those who oppose and those who support,’’ said Anwar Majid Eshki, director of the Middle East Center for Strategic and Legal Studies in Riyadh, the Saudi capital.

Mr. Obama has said he is traveling to

the Middle East to push for settling the Arab-Israeli conflict and to improve the image of the United States in the Muslim world. There are likely to be other issues discussed as well, including efforts to curtail Iranian influence in the region and the price and supply of oil.

After visiting Saudi Arabia, Mr. Obama is to arrive in Cairo, where he is scheduled to meet with President Hosni

‘‘What do you expect the Arabs to give?’’ Mubarak, give a much anticipated speech from the symbolically significant hall at Cairo University and visit the Great Pyramids of Giza and the historic Sultan Hassan Mosque.

Officials in Saudi Arabia and Egypt said that the president has already made some progress on his Middle East agenda, having restored some confidence that the United States is an honest broker interested in and serious about pushing for a Middle East settlement.

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With that reserve of goodwill, any proposal the president offers will be considered, officials said. But it will also be limited by what the leadership here sees as its bottom line: They cannot grant concessions without first gaining some, and all decisions must be agreed to by all members of the Arab League. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;In our estimation we will judge everything by the degree of Israeli commitment, and measures that are taken,â&#x20AC;&#x2122;â&#x20AC;&#x2122; said Ambassador Hossam Zaki, a spokesman for the Egyptian Foreign Ministry. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;In other words, if the Israeli side remains evasive and does not commit to any substantial move to redress the situation and put it on the right track, it is unlikely to see that Arab countries are going to be responsive to any request of gestures.â&#x20AC;&#x2122;â&#x20AC;&#x2122; An official in Saudi Arabia who spoke on the condition of anonymity because he was not authorized to discuss details of the presidential visit said that Arab states might be willing to accept certain incentives to expedite the peace process, but only if they occur simultaneously with Israeli action.

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

europe

World News For families, shock and memories

Labor anxiety runs high as vote nears

PARIS

Telegraph, which obtained computer disks containing details of five years expenses by all M.P.’s.

Faced with opinion polls that show the Labor party at some of the lowest levels of support ever recorded for the party — with levels of backing at 20 percent and lower in several key polls, and predictions of a rout for Labor in the voting Thursday — the expected reshuffle has taken on make-or-break proportions for Mr. Brown, who is 57.

The polls have given him personal ratings that are not much better than Labor’s, and have both the prime minister and the party trailing far behind the opposition Conservatives and their leader, David Cameron. Although Conservative M.P.’s have been responsible for some of the most egregious expense claims exposed in The Telegraph — most notoriously, in the case of one former cabinet minister, claiming for the cleaning of a country house moat — the opinion polls have suggested that British voters lay most of the blame for the scandal on Labor, which has been in power for the past 12 years.

Newspaper commentators have been virtually unanimous in saying that a drubbing in voting Thursday would set off a fresh round of maneuvering for a new Labor leader ahead of a general election that must be held before the five-year parliamentary term expires next June. The commentators have said that a change would have to come by early fall at latest for Labor to have any prospect of winning reelection.

But Mr. Brown has continued to meet speculation about a leadership challenge by saying that he has no intention of quitting and that he remains focused on steps to move Britain out of the deep recession that has engulfed it since the worldwide banking crisis struck in the fall. While this has prompted charges from detractors within Labor that he is politically ‘‘tone-deaf,’’ the prime minister has the advantage of knowing that there is currently no credible successor ready to mount an open challenge.

Alan Johnson, 59, the health secretary, a former mailman and union leader who appears to be the clear front-runner for the Labor succession if Mr. Brown goes, has said repeatedly that he wants no part of a challenge to Mr. Brown. But he has hinted that he would step up if the prime minister quit. With Mr. Johnson as leader, some polls suggest, Labor could mount a strong comeback, and even win the 2010 election.

The reluctance of Mr. Johnson and other potential challengers to step forward has left Mr. Brown to try to shore up his position. He appears to have settled on a major cabinet reshuffle as his best option, though his dwindling

BRITAIN, FROM PAGE 1

THE ASSOCIATED PRESS

Three young Irish doctors, all close friends, enjoying a two-week vacation together in Brazil.

That is how their families want to remember Aisling Butler, 26, Jane Deasy, 27, and Eithne Walls, 29 — three of the 228 passengers who met with disaster as Air France Flight 447 ended up in the Atlantic Ocean.

The women boarded the flight from Rio de Janeiro to Paris on Sunday night after a reunion with a larger group of former students who graduated in 2007 from Trinity College medical school.

Ms. Butler’s father, John, paid tribute to his daughter on Tuesday from his home in Roscrea, County Tipperary. ‘‘She was a truly wonderful, exciting girl,’’ he said. ‘‘She never flunked an exam in her life — nailed every one of them — and took it all in her stride as well.’’

Mr. Butler initially thought his daughter was booked on a Monday flight and had to retrieve her itinerary from his deleted e-mails to check. ‘‘When I opened it up, a nightmare opened up as well,’’ he said.

Ms. Walls, meanwhile, danced around the world with the Riverdance troupe, both before and during her medical studies.

She joined Riverdance in 2000 and performed at Radio City Music Hall in New York until starting Trinity College in 2001. She then danced part-time with the troupe’s ‘‘flying squad’’ until 2007, and was training at Dublin’s Eye and Ear Hospital to be an eye surgeon. ‘‘Eithne, we will miss your easy smile.

We will miss your dancing feet,’’ her parents and siblings said in a statement. ‘‘Her friends will, we hope, remember their special time together with fondness and joy, despite its tragic end.’’

Among the plane’s 216 passengers were 61 French citizens, 58 Brazilians, 26 Germans, 9 Chinese and 9 Italians. A lesser number of citizens from 27 other countries also were on the passenger list, including 2 Americans.

Brad Clemes, a 49-year-old Canadian Coca-Cola executive working in Brussels, was also on the flight, according to a family friend.

The German company ThyssenKrupp Steel said an executive board member, Erich Heine, responsible for major projects in Brazil and the United States, was on the flight, as was an employee, Claus-Peter Hellhammer.

Ten salesmen from CGED, an electrical distributor, were on the plane with their spouses after winning a vacation to Brazil, Europe-1 radio reported.

The five Britons on the plane included a 61-year-old British engineer, Arthur Coakley. His wife of 34 years, Patricia, broke down in tears as she described her ‘‘fabulous husband,’’ father to their three grown children. ‘‘He worked so hard for his family, that’s all he wanted, to retire. It’s not going to happen, is it?’’ she told Britain’s Press Association.

Mr. Coakley, a structural engineer for PDMS, an Aberdeen-based oil company, was helping with a survey in Brazil. He was booked onto an earlier flight but was bumped onto the doomed jet after the first flight was full.

Patricia Coakley said her son Patrick raised the alarm, phoning to ask ‘‘What flight is Daddy on?’’

She tried phoning her husband’s mobile on Monday but gave up Tuesday. ‘‘Yesterday I was really optimistic, today maybe more realistic,’’ she said.

HEINZ-PETER BADER/REUTERS

Last respects

Mourners at Vienna’s central cemetery lined up Tuesday to see the Indian preacher Sant Rama Nand, who was killed May 24 when armed men attacked a temple in Vi-

enna. The preacher was a well-known Sikh sect leader in India.

In parts of India, sect members paraded through the streets with swords and metal rods on the news of the attacks.

Russian Muslims face persecution KAZAN, RUSSIA

BY MICHAEL SCHWIRTZ

Almaz Khasanov stood up to a microphone in the green-painted cage where he and his co-defendants sit and made a statement that sent a wave of anxiety through the cramped courtroom here. ‘‘I am a member of the political party, Hizbut Tahrir,’’ he said in prepared testimony. ‘‘The goal of this organization is the creation of an Islamic way of life, including the creation of an Islamic caliphate.’’

Mr. Khasanov is a self-styled religious revolutionary who has vowed to challenge the longstanding way of life here in Kazan, the capital of Tatarstan, an ancient Muslim region deep in Russia’s heartland.

He is on trial along with 11 others, accused of membership in a terrorist organization and of fomenting plots to violently overthrow the government. Most of the men deny belonging to the group, and their friends and human rights advocates say that the Russian police and intelligence agents used torture to extract false evidence in the case.

By contrast, Mr. Khasanov freely admits being a member of Hizbut Tahrir and insists that should be his right.

While Hizbut Tahrir has been banned as a terrorist organization in Russia and most of the countries of the former Soviet Union, it has sworn off violence as a means of achieving its goals. It is allowed to operate in the United States and most of the European Union, though typically under intense scrutiny.

Still, many people here, both Muslim and Russian Orthodox, are unsettled by the unabashed fundamentalism of Hizbut Tahrir, which preaches a premodern fundamentalism that is generally incompatible with Western notions of civil society. In that sense, the trial has underscored the country’s broader ambivalence toward its Muslim minority.

Though historically Muslim, Kazan, a city on the Volga River about 800 kilometers, or 500 miles, east of Moscow, has been shaped more by its confluence of cultures than any one cultural current.

Crescent-topped minarets compete

with gilt Orthodox cupolas and bland Soviet high rises for control of the city’s skyline, though shopping malls, boutique hotels, bars and night clubs feature just as prominently. The Tatar Muslims here, who have lived under Moscow’s control since Ivan the Terrible wrested the region from the Mongol Empire in the 16th century, appear a little different from their Russian neighbors, with their secular dress and penchant for chilled vodka.

Yet, an influx of conservative ideas from abroad, officials and religious leaders say, is beginning to undermine local traditions and could even threaten the stability of the region.

But all the defendants on trial, their relatives and many Islam experts in Russia deny this. It is still unclear what level of involvement, if any, each of the other men had in Hizbut Tahrir. Many of their relatives denied they were members at all. Rather, they said the men, mostly students, were being persecuted

‘‘These are educated people — some have two degrees — and they were interested in different currents of Islam.’’ for studying and proselytizing Islam outside official religious structures. ‘‘These are educated people — some have two degrees — and they were interested in different currents of Islam,’’ said Gulnaza Faisulina, whose husband is on trial. ‘‘They are seeking philosophical thoughts, and not all the religious leaders are capable of providing this.’’

Valiulla Yakupov, a deputy mufti of the government-backed Muslim Religious Board of the Republic of Tatarstan, agreed that the Muslim establishment had not responded to the interests and desires of young Muslims. ‘‘These people have been jailed for their ideas, not for their actions,’’ he said. ‘‘If I and other religious figures worked with them more actively and explained things to them, this most likely would not have happened.’’

Inevitably, the trial has reflected Russia’s often contradictory policies toward Muslims, who number between 15 and

20 million out of an overall population of 140 million. Authorities have promoted the construction of mosques and religious schools, and Prime Minister Vladimir V. Putin as president lobbied the government of Saudi Arabia to increase quotas on Russian Muslims permitted to take part in the annual hajj, or pilgrimage, to Mecca in Saudi Arabia.

But the government has also embarked on a concerted campaign of intimidation and persecution of freethinking Muslims that has at times failed to adhere to the contours of human rights law, said Yelena Ryabinina, an expert on Muslim affairs in Russia.

It is a campaign shaped in large part

by Russia’s decade-and-a-half long struggle against violent Muslim-backed separatist movements in the North Caucasus. Two bloody wars in Chechnya alone caused thousands of deaths.

Religious violence, however, is practically unheard of in Tatarstan, where the powerful president, Mintimir Shaimiyev, has managed to preserve broad autonomy from Moscow in exchange for keeping separatist sentiments at bay.

The religious revival here, while broad, has been largely benign. About 50 mosques have been built since the fall of the Soviet Union.

Ruslan Kurbanov, a senior research fellow at the Russian Academy of Sciences Institute for Oriental Studies, accused authorities of stifling a new generation of Muslim thinkers seeking to rejuvenate the religion. Clamping a lid on religious innovation, he said, would only drive more Muslims to extremism. ‘‘Only through acceptance of these new ideas,’’ he said, ‘‘and through permitting pluralism of opinion within official religious structures can the growing tensions and inclination of Muslims to extremism be eliminated.’’

Before the recent hearing, Farida Rafikova, the mother of Dias Rafikov, one of the defendants, was adamant about her son’s innocence, saying he was passionately involved in his religion and nothing else. Following Mr. Khasanov’s testimony, however, she appeared shaken. ‘‘I just don’t know if he will admit to it or not,’’ she said. ‘‘I’m afraid to think about it.’’

Amid scattered plane debris, no clues to sudden demise PLANE, FROM PAGE 1

Jorge Amaral, said that there was no sign of life amid the debris, The Associated Press reported.

The discovery, more than 24 hours after the jet disappeared, came as investigators and aviation industry experts grappled for any new information that might help explain the accident.

The French authorities, who are leading the accident investigation, continued to consider terrorism as an unlikely explanation for the disaster, which occurred while the aircraft was at a cruising altitude of 10,600 meters, or about 35,000 feet, and which was not preceded by any distress calls from the crew.

The French defense minister, Hervé Morin, said there were ‘‘no signs so far’’ indicating a terrorist attack, but said in a French radio interview Tuesday that ‘‘all hypotheses must be studied.’’

Those hypotheses include a combination of factors like a lightning strike that could have damaged or disabled the plane’s electronic navigation systems, an autopilot malfunction or a sudden loss of cabin pressure.

What is known is that Air France Flight 447 encountered bad weather and turbulence about four hours after takeoff from Rio, and the airline said an automated warning system on the 4year-old plane beamed out a message about electrical problems 15 minutes later. The signals were not sent as distress calls, and they were not read for

hours, until air traffic controllers notified the airline that the plane’s crew had not radioed in on schedule.

As is common with transoceanic flights, the plane was too far out over the sea to be tracked on land-based radar from Brazil or the first point across the Atlantic, Senegal. Whether its location was captured by satellite or the radar of other aircraft was not immediately known.

Earlier on Tuesday, TAM, the largest Brazilian airline, said two of its pilots flying from Rio to Paris had reported seeing ‘‘bright spots’’ in the water early Monday not far from the location of the flight’s last radio communication.

Dominique Bussereau, the French transport minister, predicted the search for the aircraft’s flight data recorders would be lengthy.

The paucity of information about the accident is what aviation experts find troubling. ‘‘Quite often there are clues in the circumstances that lead you to what may have happened,’’ said Mr. Hayes of Ascend. ‘‘In the public domain at least, there do not seem to be any clues.

People have speculated about turbulence and other things, but this is still just speculation.’’

The vast majority of crashes occur in either the takeoff or landing phase of a flight. ‘‘Aircraft don’t generally crash when up at cruising altitude,’’ Mr. Hayes said. ‘‘There’s only been a hand-

ful of jet airliners that have ever crashed in the en route phase.’’

The A330 has a excellent safety record. Airbus has produced more than 600 of the planes over the last 15 years, which have flown a combined total of 3.3 million flights amounting to 13 million flight hours. Yet there have been only a handful of in-flight emergencies involving the A330 and only one other fatal crash, which involved an Airbus test plane in 1994.

A spokeswoman for Airbus, Maggie Bergsma, said the company had set up its own crisis team of technicians and was giving its ‘‘full support’’ to the accident investigators.

The fact that wreckage presumed to be that of Flight 447 has surfaced should aid investigators somewhat, though experts said a plane crashing from such a height was likely to disintegrate when it hit the ocean surface. Given such forces, the chances of any human remains being recovered were slim. ‘‘We are talking about a big plane,’’ said Alain Le Guillard, chief operating officer at Louis Dreyfus Armateurs, a French marine cabling company that has twice recovered the black boxes from aircraft crashed at sea. ‘‘If it did fall from its cruising altitude into the sea, you can imagine the impact,’’ he added.

Using satellite data and global positioning technology, investigators usually do find the remains of downed aircraft.

In January 2007, for example, an

3

Adam Air flight disappeared from radar at 10,000 meters while flying from Surabaya, on the Indonesian island of Java, to Manado, the capital of Sulawesi Island. The crew had reported bad weather and had asked air traffic controllers to help them reroute to avoid the storm — but issued no distress call.

The flight data recorders of the Boeing 737 were recovered nine months later, and an investigation eventually determined that the pilots had accidentally disabled the autopilot system.

The bodies of the 102 people on board that flight were never found.

Alain Bouillard, the investigator who led the inquiry into the crash of the Concorde in July 2000, was put in charge of the accident investigation team.

A spokeswoman for the French air accidents bureau did not return calls Tuesday seeking comment on the investigation.

Air France said Tuesday that a memorial service for the victims would be held Wednesday at Notre Dame Cathedral in Paris.

Donald G. McNeil Jr. reported from New York. Christine Negroni contributed reporting from Greenwich, Connecticut; Mark McDonald from Hong Kong; Alan Cowell from London; Sharon Otterman and Micheline Maynard from New York; Alexei Barrionuevo from Buenos Aires; Brian Knowlton from Washington; and Andrew Downie from São Paulo.

band of political allies is said to have warned that firing senior ministers could itself undermine his tenuous position and trigger a leadership challenge.

Until recent days, the prime minister had seemed intent on shielding members of his cabinet touched by the expenses scandal from paying with their jobs, while effectively forcing several backbench Labor M.P.’s into retirement.

But the criticism that has attracted appears to have prompted him to reassess, and he offered only qualified backing for alleged cabinet miscreants in his most recent interviews. On Tuesday, the BBC reported that Ms. Smith, who as home secretary as wide powers over the police and other law-and-order matters, has told Mr. Brown that she wants to quit the cabinet as part of the planned reshuffle, while remaining in Parliament.

The BBC Web site quoted someone close to Ms. Smith, 46, as saying that it was “the right thing for her family,” given what they had endured as a result of embarrassing disclosures about her expense claims, including a claim for two pay-for-play pornographic movies that her husband watched at her Birmingham home.

The case of Mr. Darling, the chancellor of the exchequer, was less clear, though several newspapers ran front-page headlines Tuesday saying he faced firing in the reshuffle after acknowledging that he had repaid £350, about $560, that he had claimed in 2007 on a London flat after he had moved into the chancellor’s

CHRIS RATCLIFFE/BLOOMBERG

Jacqui Smith, Britain’s home secretary.

official residence at 11 Downing Street.

Mr. Darling has said that the claim — puny by the standards of some of The Telegraph’s disclosures, which have run into tens of thousands of pounds of dubious claims by some M.P.’s — was a mistake, occasioned by the fact that he was promoted to the chancellor’s job and moved to Downing Street in the middle of the six-month period for which he made the claim.

Though Mr. Darling is a close political ally and friend of Mr. Brown and has worked closely with the prime minister on multibillion-pound bailouts for British banks, Mr. Brown appeared to be wavering in his backing in television interviews on Monday. He referred to Mr. Darling several times in the past tense.

In D-Day controversy, prince steps in for Queen Elizabeth LONDON

BY JOHN F. BURNS

After a week of controversy over the failure of the French and British governments to make Queen Elizabeth part of the 65th anniversary commemorations of the D-Day landings in Normandy, palace officials announced Tuesday that they had found what amounted to a face-saving solution — Prince Charles, heir to the British throne, would join the commemorations this weekend, instead of his mother.

Nobody, at least for the record, was prepared to say what part was played in the announcement by the pressure applied on Monday by President Barack Obama, who will attend the commemorations in the company of President Nicolas Sarkozy of France.

At a White House news conference, Mr. Obama’s press secretary, Robert Gibbs, said the White House was “working with those involved to see that” Queen Elizabeth was invited.

This was widely interpreted as a diplomatic way of saying that the United States had asked Britain and France to rectify what many critics, at least in

Royal Academy of Music

Britain, had seen as an insult to the 83year-old monarch and her 87-year-old husband, Prince Philip.

Much of the blame was laid on Mr. Sarkozy, for saying through aides that France regarded the commemorations as “primarily a Franco-American occasion,” and on Britain’s prime minister, Gordon Brown, who arranged at a late stage of planning for the commemorations to attend himself.

But Mr. Brown never, by his own officials’ acknowledgment, thought to ask if Queen Elizabeth would like to attend herself.

As the controversy unfolded, British veterans’ leaders vented much of their displeasure on Mr. Brown, a former student radical.

Mr. Brown has had a reputation in government of squeezing British military budgets and of appearing uncomfortable on the occasions when he has visited British troops in Afghanistan and Iraq.

The veterans have made it clear that the only British representatives they would value at the Normandy ceremonies were Queen Elizabeth and Prince Philip, both of whom served in uniform during World War II.

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For application details: www.ram.ac.uk/scholarships

4

....

| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

world news united states middle east B R I E F LY

United States

U.S. to invite Iran to July 4th parties

WA S H I N GTO N

SAN SALVADOR

Top court nominee praised at Capitol meet-and-greet

BY MARK LANDLER

Having sent the Iranian people a video greeting on their New Year, President Barack Obama now is inviting them to help celebrate a quintessentially American holiday, the Fourth of July.

The U.S. State Department sent a cable to its embassies and consulates around the word last Friday notifying them that ‘‘they may invite representatives from the government of Iran’’ to Independence Day celebrations — annual receptions that typically feature hot dogs, red-white-and-blue bunting and some perfunctory remarks about the founding fathers.

Obama administration officials characterized the move as another in a series of American overtures to Iran.

The United States has not had relations with Iran since the U.S. Embassy in Tehran was seized by protesters in 1979; Iranian diplomats have not been formally invited to American events since then. ‘‘It is another way of saying we are not putting barriers in the way of communicating,’’ said one administration official. ‘‘It is another way of signaling that there is an opportunity that should not be wasted.’’

A second official said the ban no longer made sense at a time when the United States was actively engaged with Iranian officials elsewhere. In March, the administration’s special representative for Afghanistan and Pakistan, Richard C. Holbrooke, chatted with Iran’s deputy foreign minister, Mohammad Mehdi Akhondzadeh, at a conference in The Hague.

The authorization to issue the invitations was disclosed by a senior State Department official on the eve of a threeday visit to Latin America by Secretary of State Hillary Rodham Clinton.

The officials spoke on condition of anonymity because the new policy was not public.

Even as the United States reaches out to Tehran, it is trying to reclaim U.S. influence in Latin America, where Iran has made inroads while the United States has been waging wars in Iraq and Afghanistan.

On Monday, Mrs. Clinton was in El Salvador to attend the inauguration of Mauricio Funes, whose election as president represents the first time the country has swung to the left since its civil war ended in 1992.

Mrs. Clinton was to be in Honduras on Tuesday for a meeting of the Organization of American States.

The United States is expected to face intense pressure from Cuba’s neighbors to reinstate the island’s membership in the group.

The top Senate Democrat praised Judge Sonia Sotomayor on Tuesday as an extraordinarily well-qualified Supreme Court nominee whose ‘‘underdog’’ background appealed to Americans. ‘‘We have the whole package here,’’ said Senator Harry Reid, a Nevada Democrat, seated beside Sotomayor before the two met in his Capitol office. He called her life story ‘‘compelling.’’

The visit was the start of a daylong schedule of meet-and-greets with Republicans and Democrats designed to let senators get to know President Barack Obama’s nominee before they debate confirming her. (AP) ST. PAU L , M I N N ES OTA

State justices quiz lawyer over Senate recount battle JOSHUA ROBERTS/REUTERS

Lt. Gen. Stanley A. McChrystal preparing to testify before the Senate Armed Services Committee on Tuesday about his nomination to four-star general and the U.S. Afghan command.

U.S. inquiry cites faulty Afghan airstrikes REPORT, FROM PAGE 1

be based on solid intelligence, and would be as ‘‘precise’’ as possible.

The inquiry into the strikes in Farah illustrated the difficult, split-second decisions facing young officers in the heat of battle as they balance using lethal force to protect their troops under fire with a requirement to follow detailed rules restricting the use of firepower to prevent civilian deaths.

In the report, the investigating officer, Brig. Gen. Raymond A. Thomas III, analyzed each of the airstrikes against targets in the village of Granai, in Farah Province, over more than seven hours of combat.

In each case, General Thomas determined that the targets struck posed legitimate threats to Afghan or American forces. But in ‘‘several cases,’’ the senior military official said, General Thomas determined that either airstrikes were not appropriate because of the potential risk to civilians or that American forces failed to follow their own rules in the bombing runs.

Gen. David H. Petraeus, who heads the U.S. Central Command and who has been briefed on the initial findings in recent days, last week hinted at the flaws in the choice of airstrikes or their execution. ‘‘We have to continually examine the directive that is given to our forces and also examine how our forces understand the operationalization of that — how

they understand to employ it,’’ General Petraeus told National Public Radio in an interview broadcast on Sunday.

U.S. military officials say their two investigations show that Taliban fighters deliberately fired on American forces and aircraft from compounds, and other places where they knew Afghans civilians had sought shelter, in order to draw an American response that would kill civilians, including women and children.

The firefight began, the military said, when Afghan soldiers and police officers went to several villages in response to reports that three Afghan government officials had been killed by the Taliban. The police, who were ‘‘outmanned and outgunned,’’ were quickly overwhelmed and asked for backup from American forces.

As the fight unfolded, one U.S. Navy corpsman was shot in the shoulder while trying to rescue a wounded Afghan soldier, and they became trapped by Taliban gunfire. Allied ground forces called in the air support, which fired, in coordination with the ground commander, on buildings and a tree grove from which militants were firing.

American officials have said that a review of video from aircraft weapon sights and exchanges between air crew members and a ground commander established that Taliban fighters had taken refuge in ‘‘buildings which were then targeted in the final strikes of the

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fight’’ that went well into the night.

Under President Barack Obama’s new Afghan strategy, American troop levels will double to about 68,000 this year. In his previous job as commander of the Joint Special Operations Command, General McChrystal oversaw hunter-killer units that scored significant successes in Afghanistan and Iraq.

Before the U.S. Senate Armed Services Committee on Tuesday, he was questioned on reports of abuse of detainees held by his commandos. When he took command in 2003, Special Operations detention facilities in Afghanistan were limited and disorganized, and forces involved in detention lacked experience, the general said.

Under questioning by Senator Carl Levin, the Michigan Democrat who head the committee, General McChrystal said he ‘‘was uncomfortable’’ with some harsh techniques that were officially approved for interrogation. At the time, such approved techniques included stress positions, sleep depravation and use of attack dogs. He said that all reports of abuse during his time of command were investigated and that all substantiated cases of abuse resulted in disciplinary action. ‘‘I do not and never have condoned mistreatment of detainees, and never will,’’ General McChrystal said, pledging to enforce American and international standards for treatment of de-

Muslim convert submits plea of not guilty in soldier’s killing

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tainees if confirmed for Afghanistan. ‘‘Unfortunately, criminal acts take place on the battlefield, just like they do in normal society,’’ he said in separate, prepared answers to questions submitted by the committee . ‘‘Fortunately, through improved training and education, substantiated allegations of abuse have decreased over time.’’

Under questioning from Senator John McCain, Republican of Arizona and his party’s ranking member on the committee, General McChrystal discussed his actions following the friendly-fire death of Cpl. Pat Tillman, the professional football star who enlisted after the attacks of Sept. 11, 2001.

General McChrystal expressed his ‘‘deepest condolences’’ to the Tillman family and to Corporal Tillman’s fellow Rangers and acknowledged that he would do things differently if presented again with such a tragedy.

A four-star U.S. Army review cleared General McChrystal of any wrongdoing, but punished senior officers responsible for administrative mistakes in the days after the death of Corporal Tillman.

General McChrystal explained that he had signed a Silver Star recommendation, even though he already suspected death by friendly fire, because Corporal Tillman’s valor in the field earned him the honor regardless of his manner of death. But he acknowledged that the recommendation had produced confusion.

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A Muslim convert pleaded not guilty Tuesday in what the police had called a likely ‘‘political and religious’’ attack that killed a soldier and wounded another at a military recruiting center here.

The defendant, Abdulhakim Muhammad, a 23-year-old resident of Little Rock, was charged in the killing of Pvt. William Long, 23, outside the ArmyNavy Career Center in a shopping center on Monday. Mr. Muhammad pleaded not guilty to a capital murder charge and was ordered held without bail.

A prosecutor said Mr. Muhammad had admitted shooting Private Long and the other soldier ‘‘because of what they had done to Muslims in the past.’’

An F.B.I.-led joint terrorism task force based in the southern United States had been investigating Mr. Muhammad since he returned to the United States from Yemen, a law enforcement official said. He had been arrested and jailed in Yemen for using a Somali passport, the official said. The time of that arrest was not immediately clear.

The official spoke on the condition of anonymity because of a lack of authorization to discuss the investigation publicly. An F.B.I. spokesman in Little Rock did not immediately respond to a call seeking comment.

Private Long, who was from Conway,

Arkansas, and Pvt. Quinton Ezeagwula, 18, of Jacksonville, Arkansas, had recently completed basic training and had never seen combat. Private Ezeagwula was hospitalized in stable condition.

Stuart Thomas, the police chief in Little Rock, said Mr. Muhammad, previously known as Carlos Bledsoe, was a convert to Islam and was not part of any broader plot to attack the American military. Interviews with the police show he ‘‘probably had political and religious motives for the attack,’’ the chief said. ‘‘We believe that it’s associated with his disagreement over the military operations,’’ Chief Thomas said.

Scott Duncan, a deputy prosecutor, said Mr. Muhammad had told investigators that ‘‘he would have killed more soldiers had they been in the parking lot.’’ Privates Long and Ezeagwula were attacked as they stood outside the recruiting center smoking cigarettes.

Mr. Muhammad did not speak during the brief hearing before Judge Alice Lightle of Little Rock District Court.

As is usual in high-profile cases, said John Rehrauer, spokesman for the Pulaski County jail, Mr. Muhammad ‘‘is in some protective custody, in a higher-security unit in a cell by himself.’’

Mr. Rehrauer said that he did not know of any threats against Mr. Muhammad and that jailers did not believe he was in any greater danger than previous such people held at the jail.

The two soldiers had volunteered for a program to recruit others to the military, said Lt. Col. Thomas F. Artis of the Oklahoma City Recruiting Battalion, which oversees the Little Rock office.

A police report said Mr. Muhammad had told investigators that he observed two soldiers in uniform, drove up to the recruiting center and began shooting. ‘‘He saw them standing there and drove up and shot them,’’ said Terry Hastings, a police lieutenant. ‘‘That’s what he said.’’

The police arrested Mr. Muhammad along a highway moments after the attack. The police also said an assault rifle and other weapons had been found in his vehicle. In addition to the capital murder count, Mr. Muhammad is accused of committing 16 counts of a terroristic act. Chief Thomas said most additional counts resulted from the gunfire occurring near other people.

A lawyer for Norm Coleman, the Republican who is fighting a recount battle for a Senate seat with Al Franken, a Democrat, faced sharply skeptical questioning from justices of the Minnesota Supreme Court in a crucial hearing on the case.

Mr. Coleman, who served one term before the November election, is challenging the rulings of a state recount board and a lower court, which declared Mr. Franken the winner of the race by hundreds of votes.

Associate Justice Christopher J. Dietzen said Monday that Mr. Coleman’s argument that thousands of absentee ballots had been wrongfully excluded had ‘‘no concrete evidence to back it up.’’ He added, ‘‘In my experience, I’ve never seen an offer of proof like this.’’

N EW YO R K

Congressman apologizes for remark about president Representative Charles B. Rangel, a New York Democrat, has apologized for his remark that President Barack Obama, who was in New York City on Saturday, should be careful about visiting Harlem, where a black police officer was fatally shot last week by a white officer. ‘‘It was entirely inappropriate to bring the president and his wife into this discussion during their visit to New York,’’ Mr. Rangel said in a statement issued Monday. ‘‘And I hope my off-thecuff comment did not cause embarrassment to anyone.’’

The slain officer, Omar J. Edwards, was off duty and in street clothes when he was shot on Thursday. Weapon drawn, he was chasing a man who had broken into his car in East Harlem.

Three plainclothes officers on patrol, all white, spotted the two men running and ordered them to stop. One officer opened fire, hitting Edwards three times.

WA S H I N GTO N

Obama picks Republican for army post President Barack Obama on Tuesday said he would nominate Representative John McHugh, a New York Republican, to be the new secretary of the army, adding to the ranks of opposition party figures in his administration. Obama said that Mr. McHugh was committed to keeping the U.S. Army ‘‘the best trained, the best equipped, the best land force the world has ever seen.’’ (AP) B R I E F LY

Middle East

J E R U SA L E M

Israelis race to bomb shelters in large civil defense practice Air raid sirens sounded throughout Israel on Tuesday, directing millions of Israelis toward bomb shelters and blast-proof rooms in the biggest civil defense drill ever in the country. It came as Israel is sounding warnings about the danger of the Iranian nuclear program and missile production.

The drill was part of a five-day operation called Turning Point III. It includes simulated rocket and missile attacks on Israeli cities, including preparations for a nonconventional strike.

Israel has been urging world action to stop the Iranian nuclear program, charging that Iran is building nuclear weapons, despite Iran’s insistence that its intentions are peaceful. Also, Iran has been testing medium-range missiles that put Israel in range.

Israeli officials, however, say the exercise is not a direct response to such concerns. (AP) BAG H DA D

Life term in CARE kidnapping An Iraqi man was convicted Tuesday in the 2004 kidnapping and murder of Margaret Hassan, director of CARE International in Iraq, and was sentenced to life in prison. Mrs. Hassan, 59, was one of the highest profile figures to fall victim to the wave of kidnappings that swept the country as the insurgency was gaining traction. (AP)

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WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

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middle east asia world news

U.S. and Israel hit a wall on ‘natural growth’ of settlements KFAR TAPUAH, WEST BANK

BY ISABEL KERSHNER

Thirty Israeli couples are on a waiting list to move into the Kfar Tapuah settlement, which teems with children on the hilltops south of Nablus. Some on the list grew up here. But there is not an apartment available for sale or rent, or even a stifling trailer to be had.

If Israel built all the housing units approved in its overall master plan for settlements, it would almost double the number of settler homes in the West Bank, according to unpublished official data provided to The New York Times.

The decision about whether to build, and how much, goes to the heart of the tensions between the administrations of Prime Minister Benjamin Netanyahu and President Barack Obama, an unaccustomed and no-budge conflict between Israel and the United States.

Washington is standing firm against any additional settlement construction in the West Bank, including what Israel argues is necessary to accommodate what it terms ‘‘natural growth.’’

That term has been defined vaguely

by Israeli officials, meaning for some that settlements should expand to accommodate only their own children. But Mr. Netanyahu, who leads the Likud party, made his own wider position clear Monday. He said that while Israel would not allow new settlements and that some small outposts would be removed,

building within the confines of established settlements should go on. Israel ‘‘cannot freeze life in the settlements,’’ he said, describing the American call as an ‘‘unreasonable’’ demand.

And in fact, whatever the American demands and Israeli definitions, the reality is that no full freeze seems likely.

The issue is, in part, political: Mr. Netanyahu is trying to hold together a fractious coalition, including parties that favor settlement building and oppose the establishment of a Palestinian state. He

‘‘These decrees make things difficult, but they strengthen us. We will continue to build and grow.’’ must contend with an aggressive settler movement, emboldened by support from Israeli governments for decades and determined to continue building, if necessary through unofficial means. ‘‘It is important for the world to know we won’t stop,’’ said Doron Hillel, 29, the settlement council head and one of the first children born here after it was founded about 30 years ago. ‘‘These decrees make things difficult, but they strengthen us. We will continue to build and grow.’’

This view is shared by people like Aviva Herzlich, 67, most of whose 10 children and more than 40 grandchildren live in and around Kfar Tapuah. ‘‘This is our land from the beginning of days,’’ she

said. ‘‘We do not have anywhere else.’’

A partial freeze has been in place for several years, but settlers have found ways around the strictures. Twenty trailer homes for young families have been assembled over the past year in Kiryat Arba, near Hebron. The Samaria Council, which represents settlers in the northern West Bank, has brought in 150 trailers. Thousands of permanent houses have been illegally constructed within existing settlements, and settlers have bulldozed new roads through fields to link up the outposts.

Critics argue that successive Israeli governments have turned a blind eye to this construction and that they have contributed more broadly to settlement growth. The settlers’ annual population growth, at 5.6 percent, far outstrips the Israeli average of 1.8 percent. But official data from the Central Bureau of Statistics of Israel show that while about two-thirds of that is a ‘‘natural’’ increase, as defined by settler births in relation to deaths, onethird stems from migration.

And many critics of the settlement movement dispute the notion that settlers’ children have an absolute right to continue living in their parents’ settlement. ‘‘A newborn does not need a house,’’ said Dror Etkes of Yesh Din, an Israeli group that fights for the rights of Palestinians in the occupied territories. ‘‘It is a game the Israeli government is playing’’ to justify construction, he said.

Underlining the competing pressures on Mr. Netanyahu, extremist settlers ri-

RINA CASTELNUOVO FOR THE NEW YORK TIMES

Aviva Herzlich, 67, with some of her 40 grandchildren in the settlement of Kfar Tapuah.

oted on Monday in various parts of the northern West Bank, stoning Arab vehicles, burning tires and setting fields on fire, according to a witness and the police. They were protesting the government’s actions against some tiny outposts. Several Palestinians were

wounded. Six Israeli settlers and a rightist member of Parliament were arrested and released.

The Israeli population of the West Bank, not including East Jerusalem, has tripled since the Israeli-Palestinian peace effort started in the early 1990s,

and it now approaches 300,000. The settlers live among 2.5 million Palestinians in about 120 settlements, which most of the world considers a violation of international law, as well as in dozens of outposts erected without authorization. Israel argues that the settlement enterprise does not violate the law against transferring populations into occupied territories.

According to the newly disclosed data, about 58,800 housing units have been built with government approval in the West Bank settlements over the past 40 years. An additional 46,500 have already obtained Defense Ministry approval within the existing master plans, awaiting nothing more than a government decision to build.

The data began to be compiled in 2004 by a retired brigadier general, Baruch Spiegel, at the request of the defense minister at the time, Shaul Mofaz. The Defense Ministry has long refused to make the data public, but it has since been leaked and obtained by nongovernmental groups. Mr. Etkes analyzed the master plans in the Spiegel data, together with a colleague from Bimkom, an Israeli group that focuses on planning and social justice.

Under international pressure, construction in the settlements has slowed but never stopped, continuing at an annual rate of about 1,500 to 2,000 units over the past three years. If building continues at the 2008 rate, the 46,500 units already approved would be completed in about 20 years.

Pakistan frees cleric linked to India attack LAHORE, PAKISTAN

BY WAQAR GILLANI

A Pakistani court on Tuesday ordered the release of the leader of a banned Islamic group who was placed under house arrest on suspicion of involvement in the terrorist attacks in Mumbai in November.

For India, the ruling reinforced its skepticism that Pakistan was sincere in its promises to combat groups that mount attacks against India from Pakistan.

The leader, Hafiz Muhammad Saeed, runs a charity that, India and others say, operates as a front for the terrorist group Lashkar-e-Taiba. That group is

RAHAT DAR/EPA

The release of Hafiz Muhammad Saeed reinforced India’s skepticism on Pakistan.

among the accused organizers of the attacks, in which 10 gunmen made coordinated assaults that lasted for days on luxury hotels, a cafe popular with tourists, a railroad station, a Jewish center and other targets, leaving 163 dead.

The ruling also placed the United States in a sensitive position as it presses Pakistan to take action against a growing insurgency, while persuading India, an ally that has a bitter history with Pakistan, to support the American effort. India and Pakistan, both nuclear powers, have fought three wars in six decades and tensions between them send concerns across a far wider region.

Mr. Saeed’s charity group, Jamaatud-Dawa, was put on a United Nations terrorism list after the attacks in Mumbai, with India arguing that it was inter-

changeable with Lashkar-e-Taiba, which he founded in the 1980s with the help of the Pakistani Army to fight India in a war in the disputed territory of Kashmir. Lashkar was banned in 2002, and Jamaat-ud-Dawa emerged then.

After it was placed on the terrorism list, the Pakistani government ordered it shut, cut off its financing and placed monitors in an education facility that it had used for training.

The ruling was handed down Tuesday morning in a crowded courtroom in Lahore. Dozens of Mr. Saeed’s associates chanted ‘‘God is great,’’ and cheered. Mr. Saeed’s lawyer, Abdullah Khan Dogar, joined in the applause. ‘‘The court has ordered the release of Hafiz Saeed, terming his detention unconstitutional,’’ Mr. Dogar said. He said the judges had ruled that there was insufficient evidence to continue the detention of Mr. Saeed.

Mr. Saeed was put under house arrest on Dec. 12, after India cited evidence that Ajmal Kasab, a Pakistani citizen arrested during the attacks, was connected to Jamaat-ud-Dawa. The detentions of Mr. Saeed, and his aide, Col. Nazir Ahmed, were twice extended. Other aides were released by the court.

The order releasing Mr. Saeed came despite arguments by the prosecutor, Sardar Latif Khosa, that Jamaat-udDawa was linked to Al Qaeda.

Mr. Dogar, the lawyer for Mr. Saeed, said the ruling was a victory from an independent judiciary. He said Jamaatud-Dawa was a peaceful organization and that the only binding order against it by Pakistan had been to shut down its financing, not to detain its leaders.

The Indian Ministry of External Affairs said it was ‘‘disappointed’’ with the release of Mr. Saeed, saying his organizations were listed by the United Nations as ‘‘affiliates of Al Qaeda and the Taliban.’’ ‘‘It is regrettable that, notwithstanding this background and the international obligations it entails on Pakistan, he has been released,’’ the statement said.

The Indian External Affairs Ministry said the release ‘‘raises serious doubts over Pakistan’s sincerity in acting with determination against terrorist groups and individuals operating from its territory.’’

Sabrina Tavernise and Salman Masood contributed reporting from Islamabad and Somini Sengupta from New Delhi.

Dozens are released in Pakistan after being abducted by Taliban ISLAMABAD

BY SABRINA TAVERNISE AND IRFAN ASHRAF

Dozens of students and teachers from a military college who were abducted by the Taliban in the mountains of western Pakistan were freed Tuesday morning, the Pakistani Army said.

A convoy of about 30 minivans was ferrying students and teachers Monday from the Razmak Cadet College, in North Waziristan, along the border with South Waziristan. The area is a stronghold for several groups of Taliban as well as Al Qaeda. Pakistan’s government, after a month of battling the Taliban in the Swat Valley, has said it is planning an operation in the area.

In anticipation of the military action, the 80 students and teachers had been told by the local governor to leave early for summer vacation, according to an col-

lege employee who rode in the convoy but spoke on condition of anonymity.

The convoy was accompanied by a local Taliban group for protection, but around 5 p.m., when the convoy reached a checkpoint at a place called Khajuri, that group left and armed men with another Taliban group approached, the employee said.

He said four armed men waved over the minivan he was riding in and got on board, arguing with the driver.

When they began asking men to leave the van, women began to weep, he said, and the gunmen ultimately let the van go. They reached the town of Bannu, the destination for the convoy, but only seven other vehicles had made it, leaving about 20 unaccounted for.

The military said Tuesday that the other students and staff members were freed not far from Bannu.

Salman Masood contributed reporting.

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| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

world news asia

Australia starts to agonize over China’s shopping spree AUSTRALIA, FROM PAGE 1

120,000 Chinese students attend Australian schools and universities.

Now China is starting to buy Australian assets, and, though its purchases remain dwarfed by the cumulative investments of the Americans and British, they are growing much faster. And Australians are now stepping back, realizing that their new best friend is someone they really do not know well, much less trust. ‘‘The momentum has shifted from being broadly receptive to these deals to having a hard think at this,’’ Alan DuPont, who heads the Center for International Security Studies at the University of Sydney, said.

More than a century ago, Australians fretted about becoming vassals of the resource-hungry British empire. Then, in the mid-1900s, they feared becoming an American subsidiary. When Japan began snapping up Australian companies in the 1970s, suspicion of Tokyo ran rampant.

The British and Americans proved good corporate citizens, and Japan’s ex-

‘‘The momentum has shifted from being broadly receptive to these deals to having a hard think at this.’’ pansion faded amid economic problems.

Now, Australians are asking whether China will be different. In one way, it assuredly is. Western companies, if at one time equally ravenous for Australia’s resources, are not direct appendages of their national governments. The dominant shareholder in major Chinese resource companies is the government.

China has 115,000 state-owned companies. There are more than 150 giants controlled by the government. Those corporations seek to make profit much as Western companies do. Government boards audit them, appoint their top executives and evaluate their performance, But in general, the companies insist, Communist Party leaders do not meddle in business strategy.

Even if that is true, China has long insisted on maintaining state control over companies in strategic industries, blurring the line between national and corporate interests.

Take steel. China makes more steel than any other nation but is highly dependent on iron ore imports to keep its mills humming. That raises suspicions

that China may want big stakes in mining companies now to help ensure stable prices in the future.

But if China works to keep iron ore prices stable, that might benefit steel producers more than it does Australian mining companies. That concern has only grown in recent months, as China’s largest steel producers have rejected as insufficient offers of lower prices from Australian mining companies.

There is also the question of whether China’s stake in strategic industries — like its investment in U.S. Treasury bonds — could one day morph from a business deal to instrument of diplomatic influence.

The Chinese bids for parts of the three Australian mining companies — Fortescue Metals, Oz Minerals and Rio Tinto — have been raptly watched for Australia’s answers. So far, the responses have been mixed. The smallest deal, an $840 million bid for Fortescue Metals, a struggling iron ore miner, got quick approval from Australian regulators. But Australia’s foreign investments review board, the top gatekeeper for overseas purchases, vetoed part of a $1.8 billion bid for Oz Minerals, the second-largest zinc miner in the world. The reason: Australia’s military raised the prospect of Chinese espionage at an Oz mine not far from an aerospace test site. A smaller deal was approved after the suspect mine, the core of Oz Minerals’ assets, was excised from the deal.

But the proposed purchase by the Aluminum Corp. of China of $19.5 billion in Rio Tinto stock, bonds and mining rights — China’s biggest investment in a foreign company — has caused the most angst. Chinalco, which bought 9.3 percent of Rio Tinto in 2008, proposed taking a much larger stake after the global economic collapse drove Rio into financial straits. If approved, the investment would give China an 18.5 percent share of the third-largest mining company in the world.

Chinalco unequivocally asserts its independence. ‘‘Chinalco operates as a commercial entity, at arm’s length from Chinese political processes,’’ the company’s Australian spokesman said in a written response to questions.

Many Australian experts agree. Modern Chinese corporations are state-run in name only, Ross Garnaut, an economist, former Australian ambassador to Beijing and himself the head of a goldmining company, said in an interview. In practice, he said, they were just like their Western counterparts — fiercely

REUTERS

Steel wire rod coils in Shanxi Province, China. China makes more steel than any other nation and is highly dependent on iron ore imports.

competitive and focused on profit. ‘‘You don’t know anything about the dynamics of relations between major corporations in China if you think a major aluminum company like Chinalco would sacrifice its profits to increase profits for one of its rivals in the steel industry,’’ he said. Even Australia’s antitrust regulators have concluded that the Chinese would be unable to influence the price of iron ore, a top Rio Tinto product, were the Rio deal to go through.

Yet other experts have a much different view of China’s intentions. Paul Glasson, an Australian based in Shanghai who brokers deals between Chinese and Australian businesses, notes that China’s domestic reserves can meet demand for fewer than half of 45 strategic minerals. By 2020, it will have sufficient supplies of only six.

Mr. Glasson says state ownership ac-

tually brings advantages — among them, deep pockets and a focus beyond the next quarterly statement — that any merger partner might find attractive.

But Beijing’s denial of a role in its stateowned companies, he said, is creating a credibility problem.

Chinalco would be very much a junior partner if the Rio deal goes through, with just two seats on a 17-seat board of directors. Chinalco would have to recuse itself from any Rio issues that posed a conflict of interests. Nor would Chinalco be able to guarantee a supply of ores to other Chinese companies, although the companies envision new efforts to market iron and aluminum ores inside China.

Shareholders at Rio’s annual meeting last month were unimpressed. They denounced the proposed deal as a fire sale of assets to a government buyer whose interests were starkly at odds with theirs.

As if to underscore the point, Rio’s share price has risen sharply since the Chinalco agreement was announced, suggesting that Chinalco shrewdly struck a deal at the nadir of the financial crisis. With every gain in Rio’s stock price, the Chinalco deal looks less attractive.

Some institutional investors have suggested they will oppose the bid, which requires shareholder approval, even if the Australian regulators approve it later this year. And that seems in some question.

Allies of Mr. Rudd argue that increased Chinese investment pumps money into Australia’s economy and opens new trade opportunities. But Mr. Rudd’s opponents have used the Chinese investments to attack his administration as naïvely cozy with Beijing.

Among a drip of well-timed leaks were claims that Chinese spies sought

to hack into Mr. Rudd’s laptop during the Olympic Games last year and that his defense minister failed to disclose gifts from a Chinese friend with ties to Beijing’s military establishment.

A newly issued Australian defense strategy proposes the biggest military buildup since World War II, driven in large part by a forecast of rising Chinese economic and military power and a slow American fade in the Pacific.

And recently, a wealthy Australian businessman began a television advertising blitz opposing the Rio-Chinalco deal, featuring Mr. Joyce, the opposition politician. The theme, that Australia is selling its mineral wealth to a ‘‘foreign government’’ that may not have Australians’ interest first — is unlikely to affect regulators’ deliberations. But it stokes a larger disquiet of which Mr. Rudd’s government is acutely aware.

Mr. Rudd, a Mandarin-speaking former diplomat to Beijing, has not helped his cause: After an unannounced meeting with the Chinese propaganda minister in Canberra, he lobbied for a greater Chinese role in global finance at the London economic summit meeting, leading critics to dub him China’s ‘‘roving ambassador.’’

Australia’s foreign investments board has given itself another 60 days to consider the Chinalco-Rio deal. But hopes that some of Australians’ unease might ebb during that breather took a hit this month, when another state-owned Chinese company, China Non-Ferrous Metal Mining Group, proposed a $184 million purchase of 51.6 percent of another Australian miner, Lynas. Lynas, which mines rare-earth minerals, also has been left short of cash by the global economic crisis. Critics were quick to note that China Non-Ferrous operates huge nickel and iron ore mines in Myanmar, widely denounced as one of the world’s most repressive nations, and has extensive goldmining operations in North Korea.

The executives at Chinalco, which also has operations in Myanmar, might be expected to rue the bad timing of China Non-Ferrous. On the other hand, it could be touted as evidence that the government does not stage-manage corporate strategy.

But at least one Chinalco executive no longer has those worries. The company’s chairman, Xiao Yaqing, the architect of the 2008 and 2009 purchases of Rio assets, left the company in March after getting a promotion — to deputy head of the State Council, the team of cabinet ministers that sets policy for all of China.

Media frenzy on North Korea heir SEOUL

BY CHOE SANG-HUN

South Korea’s main government spy agency told lawmakers this week that Kim Jong-il, the North Korean leader, had apparently chosen his third son, still in his 20s, as his heir, based on reports that North Korea had told its embassies to pledge their allegiance to the son, Kim Jong-un.

The question of succession has preoccupied the South Korean news media, and speculation has been rampant that the North Korean leader has been maneuvering to establish Kim Jong-un, a decision that would continue a family dynasty unique in the Communist world.

Some analysts cautioned that they did not believe any decision, if in fact made, was final. ‘‘Our intelligence service has been following the matter for some time,’’ said Song Young-gil, an opposition lawmaker briefed by the spy agency on Monday. ‘‘They said that this message instructed the diplomats to pledge their allegiance to Kim Jong-un.’’

Another lawmaker, Park Jie-won, also briefed by the spy agency, made a similar comment to SBS Radio in South Korea.

Yet another lawmaker, Moon Kookhyun, said he was obligated not to reveal details of the briefing but agreed with the reports that Kim Jong-un was being prepared as the next leader in North Korea. A few other members of the National Assembly’s intelligence committee did not return calls seeking comment.

The spy agency, the National Intelligence Service, declined to confirm the reports. The government’s official position, including that of the office of President Lee Myung-bak, remained that ‘‘nothing has been confirmed.’’

Despite public reticence, however, South Korean officials privately say that

they too now believe that Kim Jong-un stands the best chance. ‘‘We are not 100 percent sure, but we have intelligence that Kim Jong-un is most likely the man,’’ a senior South Korean policy maker on the North said, speaking on the condition of anonymity because he was not allowed to discuss intelligence matters with news organizations.

These officials offer little evidence.

Some cite ‘‘news reports’’ that say Kim Jong-un resembles his father the most in looks and temperament and thus is the father’s favorite, but the articles rely on unnamed sources. Few reports about the inner workings of the ruling family of North Korea, one of the

‘‘We are not 100 percent sure, but we have intelligence that Kim Jong-un is most likely the man.’’ world’s most isolated countries, can be independently confirmed.

So little is known about the Kim family that analysts in Seoul even disagree on the exact age of the son, Kim Jongun. South Korean news media in general say he is 25 or 26 and has charisma and a ‘‘dictatorial streak like his father.’’

Recent reports in South Korea come down to the effect that Pyongyang has begun a secretive operation, known only among key party officials, to groom Kim Jong-un as heir. But they differ in details: Some say the son began his apprenticeship in the Workers’ Party, others say the military, and still others say the National Defense Commission, the most powerful ruling agency headed by Kim Jong-il.

And there are experts who say Kim Jong-un’s path is not clear in a regime where the road to power for his father and his grandfather was strewn with

political machinations and violent purges. Kim Sung-han, a North Korea specialist at Korea University, said he believed that there might be a ‘‘fierce power struggle going on’’ between those who back Kim Jong-un and those who support the first son, Kim Jong-nam, 38. ‘‘It appears that Jong-un is the guy for now,’’ said Sohn Kwang-joo, a longtime researcher on the Kim family who runs Daily NK, a Web site based in Seoul that specializes in North Korean news. ‘‘But in a secretive country like North Korea, I won’t vouch for him until I see him take a prominent official title in the party or the military.’’

Speculative reports in the South Korean new media have been so frequent recently that some even suspect that rival factions jockeying for power in Pyongyang may be leaking stories to the South.

Others have differing theories. ‘‘I am skeptical about these reports,’’ said Lee Seung-yong, an official at Good Friends, a Buddhist-affiliated relief agency that collects news about North Korea from informants inside the country. ‘‘I even think that rumors spreading among party officials in North Korea about who’s succeeding Kim Jong-il actually originate in South Korean media, which then report these rumors.’’

The intense curiosity reflects the outside world’s anxiety over who will inherit a regime that is one of the world’s most unpredictable and is armed with nuclear weapons. Some analysts said that North Korea’s recent nuclear test and its increasingly belligerent posture toward the outside world had less to do with its traditional tactic of using brinkmanship to win concessions from the United States and more with Mr. Kim’s efforts to bolster his standing among his people and thus legitimize his plans to enforce another dynastic succession.

U.K. report of a Taliban leader’s death is doubted KABUL

BY ADAM B. ELLICK

A helicopter strike killed ‘‘one of the most dangerous Taliban leaders’’ in southern Afghanistan, British military officials said Tuesday, but a local government official said the target might have been a lower-level fighter with the same name.

The strike was carried out on Monday, British officials said, when the helicopter shot a Taliban leader named Mullah Mansur as he was riding with two others on a motorcycle. ‘‘We know it’s him,’’ one official said, adding that the man had organized several recent attacks, including one that killed two British soldiers in the south in May. The British defense secretary, John

Hutton, also expressed certainty, saying in a statement, ‘‘Mullah Mansur was the heart of the insurgents’ attempts to kill and injure British and NATO troops in Afghanistan and his presence brought misery to innocent Afghan civilians.’’

But Dawoud Ahmadi, a spokesman for Helmand Province, where the strike took place, said two militants in the region are known as Mullah Mansur. The Taliban leader is Mullah Akhter Muhammad Mansoor, the top commander in the south. A lower-level commander who operates in the province is Mullah Ahmad Mansur. The Taliban could not be reached for comment.

The attack came less than two weeks after NATO troops in Helmand killed a senior Taliban leader named Maulawi Hassan, who was responsible for nu-

merous roadside bombings and suicide attacks against NATO forces.

Separately, six members of an Afghan family died Tuesday in an explosion that wrecked their car on road near the U.S. air base at Bagram, Afghan and American officials said. But accounts of the incident, the second time in a week that a device was detonated near the base, varied sharply. An Interior Ministry spokesman, Zemarai Bashary, blamed a suicide bomber, presumably on foot, for the attack. But the Bagram district governor, Kabir Ahmad, who visited the scene, said there were indications that ‘‘someone put explosives in the car, because there was no crater.’’

Taimoor Shah and Abdul Waheed Wafa contributed reporting.

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WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

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asia africa world news

China detains dissident after he publicizes plight of political prisoners BEIJING

BY MICHAEL WINES AND ANDREW JACOBS

With the 20th anniversary of the Tiananmen Square democracy movement approaching, government security agents have detained a noted Chinese dissident after he complained openly about the treatment of former political prisoners, human rights groups said Tuesday.

B R I E F LY

The dissident, Wu Gaoxing, was seized Saturday at his home in Taizhou, a coastal city south of Shanghai, said the New York advocacy group Human Rights in China. Mr. Wu was among five men, all once imprisoned for their roles in the Tiananmen movement, who released a letter last weekend asserting that former prisoners had been singled out and made to endure economic hardship long after their prison terms ended.

Human Rights in China said Mr. Wu

was taken away and his computer confiscated about an hour after the letter, addressed to President Hu Jintao and other senior leaders, became public. Mr. Wu, a writer and former educator, is in his 60s. He was imprisoned for two years in 1989 after he joined protests in Zhejiang Province against the military crackdown on Tiananmen demonstrators.

The men, among them a former Communist Party member and a factory worker, said they had been denied pen-

sions, health care and regular employment since taking part in local rallies that were inspired by the protests in Beijing.

One, Mao Guoliang, 51, a teacher, said he has been fired from 17 schools since he served a four-year term for ‘‘counterrevolutionary activities.’’ His crime, he said, was posting seven poems he wrote that lionized the protesters.

Another of the men, Wang Donghai, was even more brazen. In 1999, long after he had served time for leading

workers through the city of Hangzhou, he decided to form a political party with six friends. They applied to the Ministry of Civil Affairs and then went home. Not long afterward they were arrested, though Mr. Wang said he had avoided a long sentence by renouncing the application. But since then he has been jobless. ‘‘At this point we just want our pensions,’’ said Mr. Wang, who is 62.

Mr. Mao has not been arrested. The status of Mr. Wang and the other two,

Chen Longde and Ye Wenxiang, all from Zhejiang Province, could not be determined.

The Chinese government has taken extraordinary steps before the Tiananmen anniversary, on June 4, to avert protests and any other public displays related to the military crackdown. Censorship of the Internet, television and printed matter, already strict, has been increased, and human rights groups say that a number of dissidents have been detained.

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J O H A N N ES B U RG

Dozens of prospectors found dead in abandoned gold mine At least 61 prospectors have been found dead in an abandoned gold mine, the police said Tuesday. The bodies were found by other illegal miners, who brought 36 bodies to the surface over the weekend, according to Harmony Gold, a mining company that had ceased work at the shaft.

The 25 other bodies had been left at drop-off points underground and were brought up Tuesday, said Tom Smith, chief of operations for Harmony’s southern region.

Harmony said more bodies could be in the Eland shaft, located at Matjhabeng in Free State Province.

Company officials suggested that an underground fire could have caused the deaths. The company said it would not send anyone to search the shaft because of the danger. (AP) A LG I E R S

U.S. vessel leaves Libya after rare training mission A U.S. Coast Guard cutter left the Libyan port of Tobruk on Tuesday after becoming the first U.S. military vessel to visit the North African country in more than 40 years.

The three-day visit by the Boutwell was ‘‘part of a theater security cooperation mission to strengthen the maritime partnership between the United States and Libya,’’ the U.S. military’s Africa Command said in a statement.

The vessel, which is in the region under U.S. Naval Command, arrived in Tobruk on Sunday and its crew conducted training exchanges with their Libyan counterparts, the navy’s statement said.

It appeared to be the latest symbol of Libya’s transition from international pariah to a country with growing security and economic ties to the West. (REUTERS)

THE EUROPEAN PARLIAMENT RESOLUTION ON CAMP ASHRAF CALLS ON THE IRAQI GOVERNMENT TO:

Respect the legal status of the Camp Ashraf residents as “protected persons” under the Geneva Conventions Not to forcibly displace, deport, expel or repatriate them End its blockade of the camp

CO NA K RY, G U I N E A

Citizens told to burn armed robbers Guineans should burn any armed robbers they catch to avoid filling the country’s prisons, the military government’s anti-crime chief said Tuesday. ‘‘I’m asking you to burn all armed bandits who are caught red-handed committing an armed robbery,’’ said Captain Moussa Tiegboro Camara, appointed by the military junta to oversee the fight against drugs and serious crime. ‘‘The prisons are full and cannot take more people, and the situation cannot continue like that,’’ he said at a meeting of city officials. (REUTERS) B R I E F LY

Asia-Pacific

N EW D E L H I

Downturn has swelled ranks of world’s hungry, Unicef says More than 100 million people have joined the ranks of the chronically hungry in South Asia because of the global financial crisis, bringing the figure to a 40-year high, a United Nations official said Tuesday.

The region’s poor, who have borne the brunt of the economic trouble, desperately need governments to spend more money on food, health care and education to alleviate the crisis, said Daniel Toole, a regional director for the U.N. Children’s Fund, or Unicef.

At least 405 million people in South Asia suffered from chronic hunger from 2007 to 2009, up from 300 million from 2004 to 2006, according to the Unicef report. (AP) U N I T E D NAT I O N S

U.N. chief denies covering up death toll in Sri Lankan war Secretary General Ban Ki-moon has denied reports that the United Nations has covered up a high civilian death toll during the final phase of Sri Lanka’s war against the Tamil Tiger rebels.

Last week, Le Monde in France reported that an unofficial U.N. tally for civilian deaths in the final months of the government’s siege against the Liberation Tigers of Tamil Eelam had exceeded 20,000. The Times of London reported the same figure. Mr. Ban rejected the reports in a U.N. speech Monday. (REUTERS)

24 April 2009 Excerpts from the European Parliament Resolution:

“havingregardtoitsresolutionsof12July2007andof4September2008 includingreferencestoCampAshraf residents having legal status as Protected Persons under the Fourth Geneva Convention, ..... whereasCampAshrafinNorthernIraqwasestablishedduringthe1980sformembersoftheIranianopposition group People’s Mujahedin Organisation of Iran (PMOI), Urges the Iraqi Prime Minister to ensure that no action is taken by the Iraqi authorities which violates the human rights of the Camp Ashraf residents and to clarify the government’s intentions towards them; calls on the Iraqi authorities to protect the lives, and the physical and moral integrity of the Camp Ashraf residents and to treat them in accordance with the obligations under the Geneva Conventions, notably not to forcibly displace, deport, expel or repatriate them in violation of the principle of non-refoulement; Calls on the Iraqi government to end its blockade of the camp and respect the legal status of the Camp Ashraf residents as “protected persons” under the Geneva Conventions, and to refrain from any action that would endanger their life or security, namely full access to food, water, medical care and supplies, fuel, family members and international humanitarian organisations.

Calls on the Council, the Commission and the Member States together with the Iraqi and US Governments and the UN High Commissioner for Refugees and the International Committee for the Red Cross to work towards finding a satisfactory long-term legal status for Camp Ashraf residents.”

The National Association of Iranian Academics in Britain Tel: 0044 7785231606

8

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| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

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editorial opinion

Obama’s Muslim speech Obama must persuade Muslims to view our existing policies in a new light.

RICHARD ALLEN News Editor SERGE SCHMEMANN Editor of the Editorial Page

Stephen Dunbar-Johnson, Président et Directeur de la Publication

OWNING GENERAL MOTORS President Obama needs to give a detailed explanation of the government’s goals for G.M. Now that General Motors has filed for bankruptcy protection, the U.S. government has taken a controlling stake in one of the largest car companies in the world.

If all goes according to plan, the American and Canadian governments will own nearly 75 percent of the company that emerges from the process and could end up holding their stake for several years.

President Obama owes Americans a candid and detailed explanation of the government’s goals. He should make clear that the overarching objectives are to create a profitable company that makes cars that people want to buy and that are more fuel-efficient. In particular, he should be explicit about how the government will handle the conflicts between those goals and the administration’s perception of the public interest.

Owning a car company like G.M. is likely to be politically tricky. The administration’s insistence that it has no intention of getting involved in the dayto-day decisions of General Motors is a reasonable response to concerns that the vagaries of the political process could run the company into the ground.

If taxpayers’ interests as shareholders are to be protected, G.M. cannot be micromanaged from Washington.

Neither the Treasury nor members of Congress should decide which plants or dealerships are to be closed, how many workers are to be laid off or hired, what specific designs G.M. adopts and where it should make them. If the objective is

to turn G.M. into a profitable car maker as soon as possible so it can be sold back into private hands, let professionals run the company.

The government would still have the votes to appoint a majority of the members of the board, and should make certain that its appointees are dedicated to the goals of profitability and fuel-efficiency. Mr. Obama must declare that these, indeed, are the overriding objectives. The decisions of G.M.’s new managers should not become entangled with the government’s other policy priorities — such as maximizing employment in the United States or reducing job losses in Michigan. And he should specify what is supposed to happen if the goals of profitability and fuel efficiency collide.

It was only March when the Obama administration let G.M. slide toward bankruptcy by denying it more taxpayer money, partly on the grounds that the company was too heavily dependent on S.U.V.’s., while its biggest stab at fuel economy, the Volt, was too expensive to work in the near future. Since then, a government task force has been deeply involved in all sorts of strategic decisions about the structure of the company’s operations.

It is not unimaginable that the government could have similar qualms about G.M.’s strategy in the future and may want to intervene again. The president should tell Americans what to expect if that time comes.

INTEL AND COMPETITION

to the charges against Intel. That reluctance was the product of an extremely narrow reading of antitrust law, validated by a conservative Supreme Court that has become increasingly hostile to antitrust enforcement. In the Bush administration’s view, to get in trouble a monopolist must do worse than use unfair methods to undermine a competitor. Regulators must usually prove that consumers were directly hurt, typically through high prices. When the wrongdoing is to offer a client conditional rebates — meaning lower prices — that can be especially hard to prove.

That view of consumer harm is too restrictive. It often seems to ignore the fact that a dominant firm that uses unfair tactics to marginalize its rivals deprives consumers of choice, another form of harm. Without competitors there is no competition. Without competition there is no incentive for innovation, or to reduce prices.

The Obama administration has a different view. The Justice Department’s antitrust division has rescinded Bush administration guidelines intended to shield monopolies from antitrust accusations. The F.T.C. is also likely to be more active under its new chairman, Jon Leibowitz. He is already considering pursuing future antitrust cases with a little-used provision of antitrust law that directly outlaws unfair methods of competition. The American economy cannot thrive without antitrust laws. It is time to start enforcing them.

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On Thursday, President Obama will deliver a speech on American foreign policy to a predominantly Muslim audience in Egypt. Aside from fulfilling a campaign pledge, why has the president decided to give such a speech?

When he approaches the microphone, what are the key issues he should address?

I have attended a number of conferences designed to promote understanding between the United States and people who live in Muslimmajority states. According to Muslim speakers at such events, one fact stands out: When the cold war ended, America needed an enemy to replace Communism and chose Islam.

How else, they ask, to explain the two Gulf wars, Afghanistan, Guantánamo and the plight of the Palestinians? To support their thesis, they cite the bellicose post-9/11 rhetoric of U.S. officials, the Western media’s preoccupation with Muslim extremists and the plethora of pundits who have identified Islam, especially “political Islam,” as the leading threat to civilization in the 21st century.

To most Americans, the idea that our country is attacking Islam or that we view the Islamic faith as an enemy is absurd. The first Gulf War

was a response to Saddam Hussein’s invasion of a neighboring Arab country. On 9/11, America was the victim, not the aggressor. In Iraq, President Bush’s rationale for regime change, though misguided, was hardly anti-Islamic. U.S. leaders can’t be held accountable for what some writers say in order to scare people and sell books. What is more, in the 1990s, America twice led NATO into conflicts on behalf of Muslim populations — first in Bosnia, then Kosovo.

Nevertheless, the perception that America is hostile to Islam remains widespread, much to the satisfaction of Al Qaeda, the Taliban and the government of Iran. To his credit, President Bush attempted on several occasions to communicate his respect and peaceful intentions to Muslim audiences. Sadly, those efforts fell on deaf ears.

On Thursday, President Obama can be assured of a wide audience, and he will speak with a far cleaner slate than his predecessor.

Mr. Obama has a family connection to Islam; he also has a well deserved reputation for weaving moral and political themes together in a coherent and thoughtful way. His challenge — not unusual for this president — will be to fulfill the expectations he has raised.

Mr. Obama’s dilemma is that no speech, however eloquent, can disentangle U.S.Muslim relations from the treacherous terrain of current events in places such as Iraq, Afghanistan, Pakistan, Iran and the Middle East.

Since the president is unlikely to announce major policy changes, he must persuade Muslims abroad to view our existing policies in a new light. That is no small job. It requires separating the rationale for contemporary actions from the long history of clashes between Islam and the West, and it requires overcoming the resentment caused when Muslim noncombatants are killed as a byproduct of conflict.

The more direct the president is in acknowledging these problems, the more likely it is that Muslims will think objectively about his words.

Muslims desire respect and respect demands frankness. We cannot pretend that American soldiers and aircraft are not attacking Muslims. We can, however, remind the world that the people we oppose are murdering Muslims and other innocents every day. In Iraq, Afghanistan and Pakistan, our allies are Muslims. We have partners in Lebanon and

among Palestinians, as well.

We understand the desire of every country to be free from foreign domination. We will be neither intimidated nor dissuaded from our purpose, but our goal isn’t to wage war; it is to help establish security for local populations and our fondest hope is to return home as soon as possible.

Although the president will be speaking to a Muslim audience about American policy, it is equally important that he address the audience in the United States. Muslims abroad need to embrace a more accurate picture of America; but Americans need to learn more about Muslims. It cannot be said too often that Islam is a religion of peace, that terrorism is as indefensible in Islam as it is in the other two Abrahamic faiths, and that the vast majority of Muslims — including the millions who are citizens of the United States — want to live in dignity and without violence.

Finally, President Obama can remind his Egyptian hosts that repression in the name of moderation is still repression. Despite the mistakes of recent years, support for democracy should remain a central theme of U.S. foreign policy. Armed groups, such as Hamas, have no place in an election. But democracy is why women have led governments in four of the five most populous Muslim-majority states and why women were recently elected to the parliament of Kuwait.

January’s provincial balloting in Iraq has helped to unify the country, while legislative debate has provided a peaceful outlet for anger. Upcoming votes in Iran and Afghanistan will no doubt influence the course of those nations. Democracy’s advantage is that it contains the means for its own correction through public accountability and discussion. It also offers a non-violent alternative for the forces of change, whether those forces are progressive or conservative.

It would be unreasonable to expect too much of any speech, especially on a topic as prone to subjective interpretation as U.S. foreign policy and Islam. Given President Obama’s record, however, we can be confident that a brave and possibly historic effort is in store. was the U.S. secretary of state from 1997 to 2001.

MADELEINE K. ALBRIGHT

Women win in Kuwait Four women made history and stirred neighbors by winning seats on Kuwait’s parliament.

Washington must pursue monopolies more vigorously and foster competition.

As American regulators slept through the past eight years, several authorities overseas decided that the Intel Corporation has been abusing its near monopoly position in the microchip market to squeeze out its smaller rival Advanced Micro Devices, constraining consumers’ choice.

It is now the United States’ turn. The Federal Trade Commission, which opened a formal investigation into Intel’s business a year ago, should decide without delay whether to pursue the company in court. The issue is not just whether Intel’s tactics against A.M.D. amount to illicit behavior. The larger question is whether Washington is willing to pursue monopolies vigorously for predatory practices and foster an environment where competition and innovation can thrive.

Since 2005, regulators in Japan and South Korea have ruled against Intel.

Last month the European Commission slapped the company with a $1.44 billion fine. It found that Intel has been giving hidden rebates to computer makers that bought all or virtually all of their chips from Intel and paying some to delay or hinder the introduction of products that had A.M.D. microprocessors. Intel denies those accusations, arguing that the volume rebates it offers never carried the alleged quid pro quos. The company appealed the Korean fine and said it would appeal the European decision.

For much of the Bush administration, regulators declined to look formally in-

Madeleine K. Albright

Mona Eltahawy

NEW YORK It’s wonderful to see the power of

women put the fear of God into countries. At least that’s how I like to explain Saudi Arabia’s decision to delay municipal elections for two years.

It’s all Kuwait’s fault. Kuwaiti women, to be precise, four of whom made history on May 17 by winning seats in their country’s parliamentary elections. Their victory was made all the more delicious because the fundamentalists who had long opposed women’s suffrage lost several of their seats in the Kuwaiti parliament.

The very next day, Saudi Arabia extended the mandate of municipal councils by two years to give time to ‘‘expand the participation of citizens in the management of local affairs.’’

By the accounts of several activists, those local councils are useless. They were the result of the kingdom’s brief, first fling with democracy in 2005, and five women announced their candidacy. But those first nationwide elections were deemed off limits to women by ultraconservative clerics.

Ever since, Saudi women and their supporters have continued to hope that King Abdullah — who is regarded as an ally — would open up the 2009 poll, slated for October, to women. So you can imagine how nervous the Saudis got at the sight of four newly minted Kuwait women parliamentarians.

For years, Islamists in Kuwait’s parliament — from the same brand of ultraconservative

Salafi Islam prevalent in Saudi Arabia — stood in the way of women’s suffrage. Women finally won their political rights in 2005, but failed in two subsequent elections to win seats in the 50member parliament.

But with neither quotas nor the backing of political parties, the four successful women in last week’s elections proved that even onceconservative voting habits can change.

Islamists lost eight of their seats in parliament in a stinging rejection of their attempts to control Kuwaiti society, where they have in recent years succeeded in banning coeducation at universities and restricting public entertainment. They had also wanted to implement Islamic law.

I am always stunned at the pontification of analysts who claim that Muslims want Islamists to run their societies for them. Muslims want choice, just like everybody else.

In countries where Islamists are the only alternative to a dictator, that’s not choice, but a protest vote against the system. Given a choice, Kuwaitis picked four women parliamentarians in a country where just four years ago women had no political rights.

Saudi Arabia knows too well the ideas that Saudi women can pick up from their Kuwaiti sisters.

In the aftermath of Iraq’s 1990 invasion of Kuwait, many Kuwaiti men and women fled the violence by getting into their cars and driving to neighboring Saudi Arabia.

Forty-seven Saudi women famously violated the kingdom’s ban on driving by taking to the wheel in a convoy through the capital Riyadh. They were denounced as whores in mosques, banned from working for two years

and had their passports temporarily confiscated.

To this day, the country whose oil reserves fuel most of the world’s cars continues to deny half its population the right to drive a car, to vote and to run for office.

Just as women faced down the fundamentalists in Kuwait, they will eventually win in Saudi Arabia. Brave Saudi women are increasingly speaking out, whether online, where they comprise more than half the kingdom’s bloggers, or through underground basketball and soccer tournaments that flout the ban on women in public sports.

The backlash will be ugly, just as it was with the women who drove in 1990. Soon after King Abdullah appointed the kingdom’s first woman deputy minister earlier this year, conservative clerics called for a ban on women in media.

But the religious hardliners are making Saudi Arabia a laughingstock. A Saudi judge told a seminar on domestic violence earlier in May that it was okay for a man to slap his wife for lavish spending, What kind of justice can women expect from a judge like that?

Like Saudi Arabia, Kuwait is a Muslim majority country. So when those Saudi clerics who stand between women and their political rights claim to be upholding “Islam,” point to neighbor Kuwait and ask “whose Islam?”

Point to Rola Dashti, Massouma alMubarak, Salwa al-Jassar and Aseel al-Awadhi — Kuwait’s new women parliamentarians — and say “Muslim Women Can!” is an Egyptian-born writer on Arab and Muslim issues.

MONA ELTAHAWY

Europe’s advantage Does the California case sound familiar to Europeans? It should.

Melvyn Krauss

California — the state in which I reside — has many advantages. It has an agreeable climate, beautiful nature and a vast amount of human resources. But the state has one malignant defect — it is ungovernable.

California is hopelessly split between radical right-wingers (mostly living in the south) and radical left-wingers (mostly in the north). It makes for lively debate, but the state is politically dysfunctional. The left wants to spend; the right fights to limit if not lower taxation.

The result is chronic budget deficits.

Somehow the state has muddled through its political extremism — at least until now. Tax revenues have crashed, the budget deficit has ballooned to over $21 billion, and the state and municipalities can not sell their bonds to finance the deficits.

Experts agree: California’s politicians are running out of options. The choices appear to be limited to deep cuts in public spending — which Governor Arnold Schwarzenegger has threatened though no one really believes him — or a bailout from the federal government.

All roads, it seems, lead to Washington.

But will Washington agree? With Barack Obama in the White House, the answer may be yes. Like General Motors and Citibank, California is likely to be judged too big to fail, especially with the United States desperately

struggling to regain its economic footing in the present global crisis.

President Obama’s fiscal stimulus has not as yet been distributed to the states. There is a strong case that California’s share be expedited. Also, there could be federal guarantees for municipal obligations with little cost to U.S. taxpayers.

Actually, a federal bailout of California might not be a bad idea if it led to badly needed reforms. But will it?

So far, President Obama’s modus operandi has been to bail out with conditionality. In California’s case, he could insist on public spending limits and impose restrictions on publicsector unions, which are known to demand more and more money but provide little additional public service.

Changes in the state constitution can be required that make it possible to raise taxes without a two-thirds majority of the state legislature, a difficult hurdle for tax hikes.

Does the California case sound familiar to Europeans? It should. Political dysfunction, out-of-control public spending and budget deficits, an inability to devalue the currency to meet the crisis, weak politicians looking for bailouts, all are part of the current European landscape.

California even has a “European” as its chief executive.

But there is an important difference between the American and European cases: California can turn to a strong federal government for help — there is no equivalent federal government to bail out Italy, Greece, Portugal or

heaven knows who else in the euro-zone.

This is an important advantage for Europe — at least from the vantage point of promoting responsible budgetary policy.

There will be a clear “moral hazard’’ problem should the U.S. bail out California. Just as the current prospect of a bailout has given California’s politicians an incentive to sit on their hands, not make the tough decisions and wait for Washington to come to the rescue, the same will happen in the future — conditionality or no conditionality. But, one wonders, how can Washington enforce conditionality on a sovereign state?

There is also a “me too” effect of a California bailout with other U.S. states to consider. Many states are hurting in America. They also will demand bailouts. Where do you draw the line?

The analogy for Europe is clear. If the E.U. bails out Greece, for example, the Italians and Portuguese will clamor for bailouts as well — and so on. No European federal budget means no bailouts, no “moral hazard” and no “me too” problems. Each state lives with the consequences of its own budgetary policies.

Without a federal budget, the people who want Germany and the Netherlands to bail out the deficit countries of the euro-zone’s south and east “to save’’ the ECB and the euro can’t get their way. In the long run, this is a better formula for responsible policies than what’s around the corner for Obama’s America.

MELVYN KRAUSS is a senior fellow at the Hoover Institution, a think tank at Stanford University.

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

commentary letters

views

LET TERS TO THE EDITOR

Rand redux Meanwhile AL E X B E AM

The quagmire ahead David Brooks On Jan. 21, 1988, a General Motors executive named Elmer Johnson wrote a brave and prophetic memo. Its main point was contained in this sentence: “We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.”

On Jan. 26, 2009, Rob Kleinbaum, a former G.M. employee and consultant, wrote his own memo. Kleinbaum’s argument was eerily similar: “It is apparent that unless G.M.’s culture is fundamentally changed, especially in North America, its true heart, G.M. will likely be back at the public trough again and again.”

These two memos, written by men devoted to the company, get to the heart of G.M.’s problems. Bureaucratic restructuring won’t fix the company.

Clever financing schemes won’t fix the company. G.M.’s core problem is its corporate and workplace culture — the unquantifiable but essential attitudes, mind-sets and relationship patterns that are passed down, year after year.

Over the last five decades, this company has progressively lost touch with car buyers, especially the educated car buyers who flock to European and Japanese brands. Over five decades, this company has tolerated labor practices that seem insane to outsiders. Over these decades, it has tolerated bureaucratic structures that repel top talent. It has evaded the relentless quality focus that has helped companies like Toyota prosper.

As a result, G.M. has steadily lost U.S. market share, from 54 to 19 percent.

Consumer Reports now recommends 70 percent of Ford’s vehicles, but only 19 percent of G.M.’s.

The problems have not gone unrecognized and heroic measures have been undertaken, but technocratic reforms from within have not changed the culture. Technocratic reforms from Washington won’t either. For the elemental facts about the Obama restructuring plan are these: Bureaucratically, the plan is smart. Financially, it is tough-minded. But when it comes to the corporate culture that is at the core of G.M.’s woes, the Obama approach is strangely oblivious. The Obama plan won’t revolutionize G.M.’s corporate culture. It could make things worse.

First, the Obama plan will reduce the influence of commercial outsiders. The best place for fresh thinking could come from outside private investors. But the Obama plan rides roughshod over the current private investors and so discourages future investors. G.M. is now a pariah on Wall Street. Say farewell to a potentially powerful source of external commercial pressure.

Second, the Obama plan entrenches the ancien régime. The old chief executive is gone, but he’s been replaced by a veteran insider and similar executive coterie. Meanwhile, the U.A.W. has been given a bigger leadership role.

This is the union that fought for job banks, where employees get paid for doing nothing. This is the organization that championed retirement with full benefits at around age 50. This is not an organization that represents fundamental cultural change.

Third, the Obama approach reduces the fear that impels change. The U.S. government will own most of G.M. It would be politically suicidal for the Democrats, or whoever is in power, to pull the plug on the company — now or ever. Therefore, the current managers can rest assured that they never need to fear liquidation again. There will always be federal subsidies for their own mediocrity.

Fourth, the Obama plan dilutes the

company’s focus. Instead of thinking obsessively about profitability and quality, G.M. will also have to meet the administration’s environmental goals.

There is no evidence G.M. is good at building the sort of small cars the administration demands. There is no evidence that there is a large American market for these cars. But G.M. now has to serve two masters, the market and the administration’s policy goals.

Fifth, G.M.’s executives and unions The Obama plan won’t re- now have an incentive to see Washingvolutionize ton as a prime revenG.M.’s culture. ue center. Already, It could make the union has successfully lobbied to things worse. move production centers back from overseas. Already, the company has successfully sought to restrict the import of cars that might compete with G.M. brands. In the years ahead, G.M.’s management will have a strong incentive to spend time in Washington, urging the company’s owner, the federal government, to issue laws to help it against Ford and Honda.

Sixth, the new plan will create an ever-thickening set of relationships between G.M.’s new owners — in government, management and unions. These thickening bonds between public and private bureaucrats will fundamentally alter the corporate culture, and not for the better. Members of Congress are also getting more involved in the company they own, and will have their own quaint impact.

The end result is that G.M. will not become more like successful car companies. It will become less like them. The federal merger will not accelerate the company’s viability. It will impede it. We’ve seen this before, albeit in different context: An overconfident government throws itself into a dysfunctional culture it doesn’t really understand. The result is quagmire. The costs escalate.

There is no exit strategy.

Another reason, if you need one, to disdain Facebook: A man I haven’t seen in 30 years sent me an ‘‘Ayn Rand app,’’ or application. It’s called the ‘‘Atlas Shrugged Pledge.’’ My former friend’s picture appeared next to the cover of the famous Rand novel, with the text: ‘‘Steve thinks everyone should read ‘Atlas Shrugged.’ ... This is one of the most important books of our time.’’

Steve, an academic economist in Washington, confesses that he has never read ‘‘Atlas Shrugged.’’ He bought the book, which is more than I can claim, and he thinks his Ayn Rand ‘‘endorsement’’ has something to do with a woman he met a year ago, etc., etc. Facebook has a lot of apps that look like endorsements. When I saw that my pal [Name Deleted to Avoid Public Shaming] was hyping fabulist-at-large Ben Mezrich, I messaged him: Really? Um, no, he admitted. The software made me do it.

Here is the curious thing: Rand, the writer/philosopher/harridan, often cited, less often read, is back. The California-based Ayn Rand Institute claims that sales of ‘‘Atlas Shrugged’’ tripled in the first four months of 2009, compared with 2008. The reason: Obamaism. ‘‘As America faces a devastating economic crisis fundamentally caused by government policies,’’ according to a statement from ARI’s executive director Yaron Brook, ‘‘it is a hopeful sign for the future that increasing numbers of concerned Americans are ... discovering Ayn Rand’s original morality of rational egoism and her uncompromising defense of laissez faire capitalism.’’

Brook has criticized the Bush-era bailouts but feels that Obama has raised government intervention in the marketplace to new, unacceptable levels. ‘‘There is something unique going on now,’’ he told me in a telephone interview, ‘‘a much more obvious collectivism. There is larger government funding and direct intervention in the economy.

People are looking for remnants of a real American spirit and a sense of American individualism. They find that’’ in Ayn Rand’s work ‘‘and they respond to it.’’

I would be the first to admit that I don’t know much about Ayn Rand, be-

yond her name. The Ayn rhymes with dine, and Rand is supposedly an Americanization of her birth name Rosenbaum.

I have heard the details of her personal life, (much younger lover, proves to be fickle; drama ensues) and have a crude understanding of Objectivism, the ‘‘morality of rational egoism.’’ Private entrepreneurialism good; centrally planned, government-funded economy bad.

As it happens,America’s most prominent Randie is probably former Federal Reserve chairman Alan Greenspan, who presided over one of the most grandiose expansions of government expenditures in world history. In 1982, Greenspan attended Rand’s funeral, where her body lay next to a large floral arrangement of a dollar sign. R.I.P. *** Dear Mr. President: Please stop spamming me. I received my first piece of unsolicited e-mail from President Obama on Feb. 2. He wanted me to spread the word about his recovery plan for America — you know, the one where my higher taxes keep failing businesses like Chrysler afloat. ‘‘I know I can rely on your spirit and resolve as we lead our country to recovery,’’ the prez wrote.

There was a note at the bottom: ‘‘Powered by Hope and Supporters Like You,’’ implying that if I donated to the Democratic National Committee, I could get more spam. Yippee!

That month, I received three Obamaspams, then silence, until last week. ‘‘Alex,’’ my pal Barack wrote, ‘‘I am proud to announce my nominee for the next Justice of the United States Supreme Court: Judge Sonia Sotomayor.’’

The sender of record is ‘‘President Barack Obama,’’ but this e-trash actually emanates from ‘‘Organizing for America, a project of the Democratic National Committee.’’ So I phoned them. ‘‘We don’t know how you got on the list, but we will un-subscribe you immediately — an option you could choose to do yourself,’’ the DNC’s communications director Brad Woodhouse emailed me. (I see it now, ‘‘unsubscribe,’’ three screens down, in ant-size type.) ‘‘The DNC does pay for and uses its own equipment to film the president for OFA/DNC e-mails as approved by the White House Counsel’s office.’’

So it’s all on the up-and-up. Just as I suspected!

BOSTON GLOBE

Philip Bowring HANOI The world resounded with ritual condemnations of North Korea’s nuclear and missile tests, but perceptions of them differ.

In the West, they are seen as a major threat to nonproliferation as well as to South Korea, Japan and even the United States. In much of the East they are seen more as a rude gesture toward the West and as a move in a succession power-play than as a threat to peace.

By contrast, the South China Sea, where major-power interests do collide, is perceived as ultimately more dangerous.

The prevailing sense in Asia is that with the U.S., China and Japan roughly in agreement, not much real damage can be done by North Korea. In smaller countries, there is even a sneaking admiration for the North’s defiance not just of the U.S. and Japan but also of China.

As for nonproliferation, the Asian attitude is why worry about North Korea when Pakistan’s bomb met no such reaction? Like Israel’s bomb, North Korea’s is seen a means of deterrence and a symbol of isolation. The regime may be appalling, but its only goal is survival.

These views may be a bit naïve, but they are understandable, given so many cries of “wolf” over North Korean arms and so little ability in the West to stop them. Why not ignore the atten-

it drew an immediate rebuff from China, which sent vessels to the area.

Then Malaysian Prime Minister Abdullah Badawi drew Chinese criticism for reaffirming his country’s claims in the South China Sea by visiting a disputed island. He also visited Brunei and laid the foundation for ending a seabed dispute which would enable exploration in areas claimed by China.

However, this was the only sign of cooperation between the Asean members over the South China Sea, although they need to act in concert if they are to counter Beijing’s claim to the whole sea, stretching 2,000 kilometers from China’s mainland to the coasts of Malaysia and the Philippines and close to Indonesian gas fields.

In 2002, Asean members signed a Declaration of Conduct with China to avoid conflict over overlapping claims and to promote joint exploration.

Though the declaration initially succeeded in reducing tensions, no joint exploration has occurred and Asean has remained divided.

No Asean members offered support to Vietnam in the face of Chinese threats against its offshore exploration, and none has shown willingness to present a united front to China.

For China, the issue is not primarily hydrocarbons — the deposits are valuable to smaller countries but marginal to China’s needs. The sea’s primary importance is strategic, so many see it as locus of competition between China and the U.S. and its Asian allies — including old enemy Vietnam.

The struggle to prevent the sea from becoming a Chinese lake will intensify if China neutralizes Taiwan, which straddles its northern entrances.

So while the headlines scream “NK Nukes,” the bigger strategic struggle is evolving to the south.

An outrage, or an opportunity?

Americans are in shocked disbelief that our president has just nationalized one of the country’s major industrial giants.

How could this happen?

We are the leaders of the free world, the ultimate example of laissez-faire economics, the champions of democracy ... and our president “nationalized” a private business like some Banana Republic dictator. This is one of the darkest hours our country has ever faced. American citizens should be outraged.

JIM GREEN, MIDWAY, UTAH

Though the loss of an American icon such as General Motors is deeply unfortunate and will have an enormous ripple effect for the world economy, America now has a unique opportunity to create a more lean and competitive company that manufactures energy-efficient vehicles that consumers actually want. The skilled laborers, expertise, and technology are not going away — just irresponsible and out-of-date business practices.

MICHAEL PRAVICA HENDERSON, NEVADA

Hacks and professionals Regarding the article ‘‘Fund-raising still has its perks in the Obama era’’ (May 30): President Obama’s selection of ambassadors to major postings including Argentina, Britain, France, India, Japan and the Vatican continues the timehonored tradition of designating political supporters, most of whom have little diplomatic experience.

Serving the United States as an ambassador is a demanding job requiring skills obtained after many years in the highly professional foreign service. The skills required include not only diplomacy but also the running of an embassy, which in many cases means oversight over hundreds of employees. Learning on the job how to be an ambassador is a waste of the taxpayers’ money.

Most important, the appointment of non-foreign service individuals to positions that should be held by career diplomats is discouraging to the dedicated foreign service officers who aspire over a professional lifetime to represent their country at the top levels.

ERIC OSTERWEIL, BRUSSELS SHARE YOUR THOUGHTS

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Crying wolf tion-seeking Kim, goes the Asian thinking? Let the Chinese handle it.

China is both the closest neighbor and the one country which has, by default and by providing food and oil aid, enabled North Korea to develop nuclear weapons. And who has more to fear from a nuclear-armed and potentially united Korea — China or the United States?

China has fostered a dangerous nuisance on its own doorstep and given Japan justification to build its defenses.

In the East, North Korea’s Pyongyang is now primarily China’s nuclear tests problem. are seen If the U.S. would more as cease making hollow threats that it “won’t a rude allow” a nuclear gesture than Pyongyang, the rest a threat. of the world would see more clearly how short-sighted China has been in trying to use North Korea as a bargaining chip with the U.S., with the eventual aim of getting American forces out of Korea.

Meanwhile, more significant for longer-term East Asian security is the resurgence of disputes over the South China Sea. Recently there was the news that Vietnam is to buy six submarines and 12 SU-30 fighters from Russia for $2.3 billion. This signaled that despite its need for good economic relations with China, Vietnam does not intend to let China’s sea claims go unchallenged.

The sale followed the Chinese harassment of a U.S. Navy vessel off the China coast in March, which stemmed from a long-standing disagreement over China’s ‘‘Exclusive Economic Zone.’’

Also in March, President Gloria Arroyo of the Philippines signed a law delineating Philippine claims in the eastern parts of the sea. Though the law merely established baselines for existing claims,

9

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| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

Culture

film travel

Charlotte Gainsbourg tests limits PARIS

The Cannes winner tells of her challenges working on von Trier’s ‘Antichrist’

BY JOAN DUPONT

Among the darkest, cruelest and most unsettling of the grim entries at this year’s Cannes Film Festival, Lars von Trier’s “Antichrist’’ stars Charlotte Gainsbourg and Willem Dafoe as a couple who lose their only child and retreat to a place called Eden, to discover hell on earth. Ms. Gainsbourg won the best actress award for her part in the film, being released worldwide through October.

The actress thanked her mother, the singer-actress Jane Birkin, adding that she hoped her father, the late composersinger Serge Gainsbourg, would have been proud — and shocked — by her performance. “I was making a joke,” she explained. “I hope he would have been happy that I did something close to him: he loved provocation.”

In “Antichrist,” Ms. Gainsbourg is filmed, at different times, naked, making love, masturbating, mutilating her husband and herself, and being strangled by him. “The toughest, most painful and scary, was the strangulation because Lars really didn’t have a limit. ‘‘He didn’t want me to die,’’ she laughed, “but he wanted me to go as far as I could.”

It seems as if all France watched Ms. Gainsbourg grow up. A wisp of a girl with a wobbly voice, she sang “Lemon Incest,’’ a love ballad (and play on words — “zeste de citron”), in duet with her father. At the César ceremonies when, at 14, she was named most promising actress for her role in Claude Miller’s ‘‘L’effrontée’’ (Shameless, 1985), Serge gave her a public amorous embrace.

“I was aware of the subject of ‘Lemon Incest,’ but it didn’t shock me,’’ she said. ‘‘I was saying truthful things — that I loved him deeply and this was the love we would never do together. I think it was very generous of my mother to let me be free like that.’’

Ms. Gainsbourg, married to the actordirector Yvan Attal, has a son and a daughter. At 38, she is no longer a hesitant girl, but a singer with her own voice and a fearless actress who sought out Mr. von Trier for the part when Eva Green stepped down. “I went to Copenhagen to meet him, but thought I wasn’t to his taste: he was very quiet and nervous. I was intimidated, but since he was so nervous, it calmed me, and the more he asked about my fears and if I had panic attacks, the more I had to say no, I was perfectly fine.”

Mr. von Trier has claimed that he made “Antichrist” during a period of depression. “I never really grasped his vision, but it didn’t matter,’’ said Ms. Gainsbourg. ‘‘I was attracted to the part and the idea of acting like a puppet. Ever since I was little, I liked to hide behind

PHOTOGRAPHS BY CHRISTIAN GEISNAES/WWW.FILMSDULOSANGE

Charlotte Gainsbourg in scenes from ‘‘Antichrist,’’ directed by Lars von Trier. Her character is known simply as She. She ‘‘was about pain,’’ Ms. Gainsbourg said. ‘‘I don’t know if this is masochistic, but I enjoyed being that character.’’

des rêves’’ (The Science of Sleep) in 2006 and Todd Haynes’s “I’m Not There’’ in 2007, playing opposite Heath Ledger.

“It’s always nice to do comedy, but I’m quite the opposite of that nice little girl right now — I’m not so nice, and it would be awful if I couldn’t do what I want because of that image. I’ve always done whatever attracts me without censoring myself. I didn’t do this role for the sake of provocation, just without fear of limits.’’

On the set, Mr. Dafoe was a great ally.

“Willem has something strong and sure,’’ she said. ‘‘Lars was always unexpected: you never knew when he was going to leave or have a panic attack himself. So it was good to have Willem with me in the same boat.’’

Often feeling adrift, Ms. Gainsbourg says that she got little direction from Mr. von Trier, “as if he hadn’t written

other people’s visions and desires. It does something for me.”

Her rare quality, a certain purity, makes her character, an anonymous woman known as She, credible. “The entire character was about pain. I don’t know if this is masochistic, but I enjoyed being that character.’’

Ms. Gainsbourg’s Cannes prize, and especially this role, marks a new turn in her career. She has played headstrong women in comedies by her husband, Mr. Attal: ‘‘Ma femme est une actrice’’ (My Wife is an Actress) in 2000 and ‘‘Ils se marièrent et eurent beaucoup d’enfants’’ (And They Lived Happily Ever After) in 2004. She also won a César for best supporting actress in Danièle Thompson’s ‘‘La bûche’’ (Season’s Beatings) in 1999.

American audiences know her through Michel Gondry’s ‘‘La science

the screenplay. It was a big intense role with very strong emotions and it scared me, but I didn’t question it, and we didn’t rehearse: Lars doesn’t like to think about the script or talk, so that was intimidating.’’

Ms. Gainsbourg has been busy with other projects, including a film directed

by Patrice Chéreau and an album with Beck.

The graphic novelist Joann Sfar is making a biopic on her father and several of the women in his life, scheduled for release next year. Ms. Gainsbourg said, “I had to step back and let him make his movie. I’m sure he’ll do a great movie — it’s just that I won’t be able to watch it.’’

ONLINE: LOOKING BACK AT CANNES

A review of ‘‘Antichrist,’’ plus more Cannes coverage. global.nytimes.com/arts

Coaxing a Khmer temple from the jungle’s embrace International team aims to repair Banteay Chhmar after decades of neglect

BY ROBERT TURNBULL

To reach the temple of Banteay Chhmar from the Cambodian town of Sisophon in the dry season involves a two-hour drive through parched forests coated with brown dust. The temple is breathtaking.

Bas-reliefs depict naval battles between ancient Khmers and their Cham rivals in remarkable detail. Giant sandstone faces loom over thick vegetation strewn with collapsed lintels and broken naga heads.

Visitors to Angkor Wat will have seen something like this. But the glory of Banteay Chhmar is its raw, unadulterated state. Sitting 100 kilometers, or about 60 miles, northwest of Siem Reap, this is Cambodia’s ‘‘forgotten’’ temple.

You will probably find yourself alone, able to rekindle the experience of colonial French explorers as they first stumbled upon Khmer antiquity.

But the same isolation was not lost on those who vandalized Banteay Chhmar in the late 1990s. The Cambodian military not only mined the complex but made off with large sections of bas-relief destined for private homes in Bangkok and beyond. Local guides like Seng Samnang remembers the oxcarts loaded with artifacts being wheeled out of the temple. ‘‘There was nothing we could do,’’ he said. ‘‘If we had challenged these men we would have been killed.’’

About 115 pieces, a truckload, have been recovered and they are sitting in the National Museum in Phnom Penh.

Of the rest — there is allegedly much more — reports of Buddha heads appearing in Thai generals’ gardens have done little to ease longstanding tensions over Thai claims to Cambodia’s patrimony, an issue that resurfaced last year, and remains unresolved, at the northern temple of Preah Vihear.

Banteay Chhmar is returning to the spotlight, but now the news is good. In

2008 the Culture Ministry handed control of the temple to Global Heritage Fund, an organization in California that tries to safeguard the world’s most endangered sites. Established in 2002, the fund has a budget of $6 million and 44 employees to rehabilitate the temple, the eventual aim being its inclusion on Unesco’s World Heritage List.

John Sanday is leading the project. He is a British architect who first set foot in Cambodia in 1992 to work on the 12thcentury Preah Khan, a temple famous for its outer wall of garudas, the mythic birds of Hindu legend. To help attract financing, the savvy Mr. Sanday, a former employee of the World Monument Fund, managed to persuade a number of private individuals to ‘‘adopt’’ a garuda for $30,000.

Like Preah Khan, Banteay Chhmar was built as a monastic complex by Jayavarman VII, the king who converted Cambodia to Buddhism. But the paucity of surviving inscriptions make it unclear exactly when and why. Writing in 1949, the historian Lawrence Palmer Briggs

claimed the temple ‘‘rivaled Angkor Wat in size and magnificence.’’ It has four enclosures surrounded by a moat, a vast artificial lake, or baray, and could sustain a population of at least 100,000.

Romantic it may be, but much of Banteay Chhmar today consists of piles of lichen-stained rubble. Of 400 meters (1,300 feet) of bas-relief wall, only 25 percent still stands. Faced with collapsed or collapsing structure, Mr. Sanday and his team must decide what should be rebuilt or merely stabilized. Whether to replace the missing stones with newly quarried or recycled stone is another question.

A simple paradox lies at the heart of the restoration process: The less you notice, the better the job. Mr. Sanday sees overzealous rebuilding as compromising of a monument’s natural history, and much of its beauty. On the other hand, donors to projects such as these usually want to see tangible results, if not the revelation of some architectural marvel.

Mr. Sanday’s solution is to opt for a ‘‘presentation’’ of key areas of the temple, which in the future can serve as

Much of the complex today consists of piles of lichen-stained rubble. a model. Visitors will enter — as did the ancients — past the eastern gopura, along a causeway largely destroyed by 600 hundreds years of monsoons. Once that is rebuilt, they will advance toward the southeastern gallery of bas-reliefs and access the temple’s central areas along suspended wooden boards.

Under Predrag Gavrilovich, a Macedonian architect and colleague of Mr. Sanday’s, the fund is working on the southeastern gallery. Mr. Gavrilovich was responsible for rebuilding Preah Khan’s beautiful Dharamsala and Hall of Dancers almost entirely from scratch.

His achievement was to completely disguise that fact by presenting something that seems utterly natural in its decay.

Can he do the same with Banteay Chhmar? His team has already reassembled the gallery’s square pillars and corbel

vaulting. But the foundations need reinforcing before those parts can be lifted to their original position. ‘‘The building was not well constructed,’’ Mr. Gavrilovich said. ‘‘Maybe it was built in a hurry.’’

For the ‘‘face towers,’’ Mr. Gavrilovich will have the benefit of new software developed by Hans Georg Bock at Heidelberg University in Germany. By scanning all the rubble and carefully analyzing each stone, it is possible to create a 3-D database for a virtual reconstruction of the entire monument.

The temple is only one part of Mr. Sanday’s project. His greater challenge is to turn a heavily mined former war zone with ‘‘finite’’ water supplies and massive scars on the landscape into a fertile and ‘‘zoned’’ area for responsible development as well as tourism.

So water has to come from somewhere. The reservoir the ancient Khmers built just north of the temple is heavily silted. Damming by villagers of the temple’s ornamental moat has resulted in flooding and wastage at monsoon time. With no evidence of an un-

derground water table or any deep interventions, Mr. Sanday has invited James Goodman, a hydrologist in Geneva to research and map the course of the old waterways. Mr. Goodman has been looking both at images taken by the colonial École Française d’ExtrêmeOrient in 1945 and aerial photos used by the United States during the Indochinese war. The idea would be to rationalize water supplies and to create a welldrilling program.

For the project to work requires the support of the 12,000 or so villagers who might wonder what’s in it for them.

Community Based Tourism, a Frenchinspired organization, aims at rewarding local people with 100 percent of tourist revenue. In 2007 and 2008, 512 visitors showed up. For $7 a night they were offered a tour, a room in a house with hot water and several hours of electricity.

Mr. Sanday is determined to prevent the kind of commercial pressures on temple sites that has dogged Angkor over many years. He said he thinks the authorities are behind him. ‘‘The ministry has set out clear zoning rules which dictate the position and size of new building and plans to create a new road that bypasses the temple,’’ he said.

The Culture Ministry’s heritage police will soon take charge of security. Only then might the return of the original basreliefs be possible under an agreement between the culture minister, the Global Heritage Fund and Unesco. That agency’s Teruo Jinnai, for one, welcomed the idea, provided ‘‘the security situation meets international requirements.’’

It should happen. The return of these priceless bas-reliefs would demonstrate a new spirit of cooperation among those concerned with safeguarding Cambodian heritage. It could also send a clear message to those of ill intent to keep their hands off Banteay Chhmar.

ONLINE: MORE TRAVEL NEWS

PHOTOGRAPHS BY DAN THOMPSON/GLOBAL HERITAGE FUND

A section of wall being rebuilt at the Banteay Chhmar temple, left. One the complex’s many ‘‘face towers.’’ John Sanday, the leader of the project, examining a pile of cut stone at the site.

Go to the Globespotters blog for more travel news from reporters around the world. global.nytimes.com/travel

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

11

theater books culture

PHOTOGRAPHS BY JOHN HAYNES

Wallace Shawn in â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Grasses of a Thousand Colours,â&#x20AC;&#x2122;â&#x20AC;&#x2122; with Miranda Richardson in the background; and from left, Tom Mison, Jonathan Cullen, Lisa Dillon, Leah Purcell, Simon Burke, Phoebe Nicholls and Naomi Bentley in â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;When the Rain Stops Falling.â&#x20AC;&#x2122;â&#x20AC;&#x2122;

Daring to showcase untested plays Several theaters bring a spark of originality to the London stage

BY MATT WOLF

The London theater, it increasingly seems clear, likes to define itself by redefining the classics, as is apparent in a month whose first two weeks see fresh productions of â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Winterâ&#x20AC;&#x2122;s Tale,â&#x20AC;&#x2122;â&#x20AC;&#x2122; â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Cherry Orchardâ&#x20AC;&#x2122;â&#x20AC;&#x2122; and Tom StopT H E AT E R R E V I E W

pardâ&#x20AC;&#x2122;s â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Arcadia,â&#x20AC;&#x2122;â&#x20AC;&#x2122; not to mention Helen Mirren playing Racineâ&#x20AC;&#x2122;s Phèdre and Jude Lawâ&#x20AC;&#x2122;s long-awaited Hamlet.

But what about the truly original play? On the commercial West End, new writing is more or less extinct in a landscape that has pretty much ceded that theatrical terrain to the not-forprofit theaters that can showcase untested scripts with minimal risk to all concerned.

The National has just opened Matt Charmanâ&#x20AC;&#x2122;s compelling if over-earnest â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Observerâ&#x20AC;&#x2122;â&#x20AC;&#x2122; in an exceptionally vivid production from Richard Eyre that shows up the playâ&#x20AC;&#x2122;s potential as an eminently viable film: With all due respect to Anna Chancellor, who ably plays an Englishwoman struggling to assist in an unnamed African country

coming to painful terms with the democratic process, one can imagine the very same material at a cinema near you, Emma Thompson striding determinedly across a landscape in which this would-be crusader is destined to remain observer, outsider, even the enemy all at once. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Observerâ&#x20AC;&#x2122;â&#x20AC;&#x2122; is a perfect fit for the Nationalâ&#x20AC;&#x2122;s studio-sized Cottesloe auditorium, where the play can run in repertory without feeling any pressure to take the town. (It is scheduled at the National through early September.)

The Almeida Theatre in North London, meanwhile, is boasting the finest new play seen at that address since its artistic director, Michael Attenborough, took over the running of the Islington playhouse in 2003. Consumed with climate change, love and loss, and the ways in which coincidence can make over our lives, â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;When the Rain Stops Fallingâ&#x20AC;&#x2122;â&#x20AC;&#x2122; also inadvertently acts as a structural primer for the return to the London stage this week of â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Arcadia.â&#x20AC;&#x2122;â&#x20AC;&#x2122; To a degree exceeding Mr. Stoppardâ&#x20AC;&#x2122;s 1993 masterwork, the Australian writer Andrew Bovellâ&#x20AC;&#x2122;s comparably mournful play shuttles swiftly between time periods and continents to offer up a wounding theatrical mosaic that tells of two families â&#x20AC;&#x201D; one in England, the other in Australia â&#x20AC;&#x201D; across four generations and 80 years, from 1959 to 2039.

(The production runs through July 4.)

Those resistant to contrivance may

balk at an intricately structured narrative that finds Gabriel (Tom Mison), an itinerant young Englishman, initiating a romance halfway around the world with an Australian waitress by the name of Gabrielle (Naomi Bentley). In fact, the links between the two lovers widen out well beyond their names to encompass the painful story of Gabrielâ&#x20AC;&#x2122;s suicidal father, Henry (Jonathan Cullen), who some years before walked out on the young boyâ&#x20AC;&#x2122;s brainy mother, Elizabeth (Lisa Dillon), who in turn went on to expunge any mention of her husband and his indecent affections from her sonâ&#x20AC;&#x2122;s life.

Mr. Bovellâ&#x20AC;&#x2122;s play is about people on the move, literally and figuratively, as well as those who wish to take flight from their own selves but for whatever reason cannot. That need is everywhere evident in the dreamy melancholia of the original music from the Oscarwinning composer Stephen Warbeck (â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Shakespeare In Loveâ&#x20AC;&#x2122;â&#x20AC;&#x2122;) and in an exquisitely pitched staging from Mr. Attenborough, whose own sensitivity to the playâ&#x20AC;&#x2122;s undertow of grief surely owes something to the dreadful loss of his own sister and niece, both of whom died in the South Asian tsunami of 2004.

Although the play at first seems as if itâ&#x20AC;&#x2122;s going to be a thematic riff on â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Festen,â&#x20AC;&#x2122;â&#x20AC;&#x2122; an earlier Almeida entry about a family irrevocably rent asunder by a fatherâ&#x20AC;&#x2122;s sexual impropriety, this newer play is an altogether more ma-

Ray DVD set of â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Neil Young Archives, Vol. 1: 1963-1972,â&#x20AC;&#x2122;â&#x20AC;&#x2122; which went on sale Tuesday, holds about 130 songs spread over more than 10 hours, and a price tag of about $350. Clips include a home movie of Mr. Young discovering a bootleg in a music store and confiscating it. Fans will also get to hear BUFFALO SPRINGFIELDâ&#x20AC;&#x2122;S â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Sell Outâ&#x20AC;&#x2122;â&#x20AC;&#x2122; for the first time and â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Everybodyâ&#x20AC;&#x2122;s Aloneâ&#x20AC;&#x2122;â&#x20AC;&#x2122; with CRAZY HORSE. The set, which took more than two decades to assemble, only covers the start of the singer-songwriterâ&#x20AC;&#x2122;s career and at least three more volumes are set to follow. (BLOOMBERG)

call girl similar to ASHLEY DUPRE, who was at the center of the scandal that brought down the New York Governor ELIOT SPITZER last year. Ms. Kidman dropped out because of a schedule overlap with â&#x20AC;&#x153;The Rabbit Hole,â&#x20AC;? the JOHN CAMERON MITCHELL-directed film she is producing as well as toplining. Ms. Punch joins JOSH

PEOPLE J. D. SALINGER is seeking an injunction against the writer, publishers and distributor of a spin-off of the authorâ&#x20AC;&#x2122;s famous novel. Lawyers for the 90-year-old author of â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Catcher in the Ryeâ&#x20AC;&#x2122;â&#x20AC;&#x2122; are seeking to stop publication of what they say is a copycat book titled â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;60 Years Later: Coming Through the Rye,â&#x20AC;&#x2122;â&#x20AC;&#x2122; by someone writing under the name JOHN DAVID CALIFORNIA. It also seeks unspecified damages. The lawsuit, which was filed in New York this week, said the right to create a sequel to â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The Catcher in the Ryeâ&#x20AC;&#x2122;â&#x20AC;&#x2122; or to use the character â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Holden Caulfieldâ&#x20AC;&#x2122;â&#x20AC;&#x2122; belongs only to Mr. Salinger. (AP)

RINGO STARR, OLIVIA HARRISON

PAUL MCCARTNEY and RINGO STARR went onstage to promote â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;THE BEATLES: Rock Bandâ&#x20AC;&#x2122;â&#x20AC;&#x2122; video game at the Microsoftâ&#x20AC;&#x2122;s Electronic Entertainment Expo in Los Angeles on Monday. YOKO ONO and George Harrisonâ&#x20AC;&#x2122;s widow, OLIVIA, were also at the presentation. In the music game, players will be able to follow â&#x20AC;&#x201D; and perform as â&#x20AC;&#x201D; members of The Beatles, beginning with their early days in 1963 Liverpool through their final rooftop performance. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Whoever thought weâ&#x20AC;&#x2122;d end up as androids?â&#x20AC;&#x2122;â&#x20AC;&#x2122; joked Mr. McCartney. (AP)

When word spread that PRESIDENT BARACK OBAMA and his wife, MICHELLE, had chosen to see â&#x20AC;&#x153;Joe Turnerâ&#x20AC;&#x2122;s Come and Goneâ&#x20AC;? on Broadway last weekend, questions quickly followed about the impact of a presidential endorsement.

Would it help â&#x20AC;&#x153;Joe Turnerâ&#x20AC;? at the box office? The answer appears to be yes. â&#x20AC;&#x153;Joe Turnerâ&#x20AC;? sold twice as many tickets on Sunday as it did the previous Sunday, an increase that producers at Lincoln Center Theater said had undoubtedly been influenced by the Obamas.

NEIL YOUNG may have set a record this week in rock box-set excess. The 10 Blu-

As the CONAN Oâ&#x20AC;&#x2122;BRIEN era of NBCâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Tonightâ&#x20AC;? show kicked off in Los Angeles this week, the TV host paid tribute to his predecessor JAY LENO, whom he called â&#x20AC;&#x153;a very good friendâ&#x20AC;? and a â&#x20AC;&#x153;true gentleman and very gracious man.â&#x20AC;? When Mr. Oâ&#x20AC;&#x2122;Brien emerged onto the â&#x20AC;&#x153;Tonightâ&#x20AC;? show stage, he was greeted by a sustained ovation from a first-night audience that contained only regular fans â&#x20AC;&#x201D; every celebrity request was denied, he said. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;I have to admit I think Iâ&#x20AC;&#x2122;ve timed this moment perfectly,â&#x20AC;&#x2122;â&#x20AC;&#x2122; he said. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Think about it: Iâ&#x20AC;&#x2122;m on a last-place network; I moved to a state thatâ&#x20AC;&#x2122;s bankrupt; and tonightâ&#x20AC;&#x2122;s show is sponsored by General Motors.â&#x20AC;?

Apparently the latest monster to emerge from Mattelâ&#x20AC;&#x2122;s toy-creation laboratories is so terrifying that the company will not give its name or say when it is hitting shelves â&#x20AC;&#x201D; yet the beast is also so appealing that it has already been signed up for its own movie musical. Variety reported that Universal Pictures had struck a deal with Mattel to create a live-action musical film about the new creature. The movie is to be produced by CRAIG ZADAN and NEIL MERON (whose credits include the â&#x20AC;&#x153;Hairsprayâ&#x20AC;? film musical), and will reunite them with the â&#x20AC;&#x153;Hairsprayâ&#x20AC;? composer MARC SHAIMAN and lyricist SCOTT WITTMAN. Mattel gave no details about its coming monster toy, except that it â&#x20AC;&#x153;aspires to add a fresh twist to monster lore,â&#x20AC;? according to Variety.

WOODY ALLEN has chosen the British actress LUCY PUNCH to replace NICOLE KIDMAN in the cast of his upcoming untitled film, Variety Magazine reported. Sources close to Mr. Allen told the magazine that Ms. Punch is slated to play a high-priced

BROLIN, ANTHONY HOPKINS, ANTONIO BANDERAS, NAOMI WATTS and FREIDA PINTO in a film

that Mr. Allen is set to shoot in London.

A judge has placed the former â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Columboâ&#x20AC;&#x2122;â&#x20AC;&#x2122; actor PETER FALK in a conservatorship Monday to ensure that his daughter, CATHERINE, can occasionally

CONAN Oâ&#x20AC;&#x2122;BRIEN, NICOLE KIDMAN

visit the ailing 81-year-old actor. Mr. Mr. Falkâ&#x20AC;&#x2122;s wife of more than 30 years, SHERA, will remain in control of his personal care and affairs. Mr. Falk has advanced dementia, likely from Alzheimerâ&#x20AC;&#x2122;s disease, according to one of his doctors.

Catherine Falk petitioned in December to take over her fatherâ&#x20AC;&#x2122;s affairs despite a sometimes contentious relationship with Falk and his wife. By court order, she will be allowed a 30-minute visit with her father every other month. (AP)

ture work, not least in the ability of both the writing, and Mr. Attenboroughâ&#x20AC;&#x2122;s staging, to move gracefully from magical realism to quotidian detail and back again. Before very long, you accept an environment in which fish are seen to be falling out of the sky, even if itâ&#x20AC;&#x2122;s more emotionally draining to take on the full weight of parental abandonment anatomized by Mr. Bovellâ&#x20AC;&#x2122;s script.

Among a finely calibrated ensemble, acting honors surely go to Phoebe Nicholls as the older version of the solitary Elizabeth, who must bid farewell first to a husband, then a son. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;If you

Not-for-profit theaters are bastions for truly original plays. touch me, I will break,â&#x20AC;&#x2122;â&#x20AC;&#x2122; she remarks calmly to the Australia-bound Gabriel, nursing a glass of her preferred red wine. As Ms. Nicholls speaks the line, you fully believe in a fragility that is one step away from finally going snap.

You get some measure of the workings of â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;When the Rain Stops Fallingâ&#x20AC;&#x2122;â&#x20AC;&#x2122; from its very opening, which consists of the prolonged scream of the younger Gabrielâ&#x20AC;&#x2122;s now middle-aged son, who is also named Gabriel: Richard Hope does well by what is arguably the most overtly anxious role in the play.

The American dramatist Wallace Shawn, by contrast, prefers to gently be-

guile his audience before going in for the kill. Smile, his openings all but promise us, because savagery is not far off.

That strategy is on view through June 27 across the two auditoriums that make up the Royal Court Theatre, long Londonâ&#x20AC;&#x2122;s most vaunted theater for new writing. The larger Jerwood Theatre Downstairs is hosting a return visit of Mr. Shawnâ&#x20AC;&#x2122;s â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Aunt Dan and Lemonâ&#x20AC;&#x2122;â&#x20AC;&#x2122; to the venue where this ever-difficult, always rewarding play received its world premiere in 1985, in a production that included Mr. Shawn among its cast members. The alternately impish and scalding performer is on the Court premises this time around, too, but in the smaller Jerwood Theatre Upstairs.

He is the lone man surrounded by three women in â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Grasses of a Thousand Colours,â&#x20AC;&#x2122;â&#x20AC;&#x2122; Mr. Shawnâ&#x20AC;&#x2122;s latest play, directed by his beloved collaborator, Andre Gregory. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Grassesâ&#x20AC;&#x2122;â&#x20AC;&#x2122; has been produced in association with the New Group Off Broadway, where it is expected to have its New York debut next season.

Whatâ&#x20AC;&#x2122;s surprising about â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Aunt Danâ&#x20AC;&#x2122;â&#x20AC;&#x2122; is the degree to which this most warped of memory plays discomfits its public even now, in a staging from the Court artistic director Dominic Cooke that casts a posh-voiced, gleaming-eyed Jane Horrocks as Lemon, the devotee of the Nazis whose insidious slide into psychosis is charted in the course of an evening that runs nearly two hours, no intermission. Lorraine Ashbourne cuts

an omnivorously sensual figure as the charismatic Aunt Dan (short for Danielle), the American-born Oxford don and Henry Kissinger enthusiast whose rabid embrace of life is eerily subverted by her supposed acolyte, the ailing, sickly Leonora, otherwise known as Lemon.

The bald-pated, round-faced Mr. Shawn isnâ&#x20AC;&#x2122;t anyoneâ&#x20AC;&#x2122;s first image of a sensualist, even if â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Grassesâ&#x20AC;&#x2122;â&#x20AC;&#x2122; on one level amounts to a poetic meditation on male tendencies toward the priapic, chronicled in three hours and 15 minutes and three (always riveting) acts. Donâ&#x20AC;&#x2122;t be fooled by references early on to chocolates and the sight of Mr. Shawn in a knockout dressing gown that could have been purchased at Harrods up the road. Such elegance notwithstanding, incivility remains his abiding theme as it extends across genders and into the animal kingdom in ways that need not be given away here.

The women in Mr. Shawnâ&#x20AC;&#x2122;s fiercely libidinous orbit include Miranda Richardson â&#x20AC;&#x201D; a previous Aunt Dan, as it happens â&#x20AC;&#x201D; and, making her British theater debut, the film actress Jennifer Tilly (â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Bullets Over Broadwayâ&#x20AC;&#x2122;â&#x20AC;&#x2122;) in surpassingly voluptuous form. They all look like good, kind people who wouldnâ&#x20AC;&#x2122;t tamper with a flea. But donâ&#x20AC;&#x2122;t be misled by the abundant good cheer with which â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Grasses of a Thousand Coloursâ&#x20AC;&#x2122;â&#x20AC;&#x2122; begins; an abiding chill, as always with Mr. Shawn, awaits.

Painting herself out of a corner The American Painter Emma Dial. By

Samantha Peale. 330 pages. W.W. Norton & Co. $24.95.

BY DEBORAH SOLOMON

About halfway through â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The American Painter Emma Dial,â&#x20AC;&#x2122;â&#x20AC;&#x2122; the title character makes the obligatory pilgrimage to West 24th Street in the Chelsea neighborhood of New York, to attend an art opening.

BOOK REVIEW

Emma Dial is an appealing woman of 31, talented but not excessively driven, who earns her living as an assistant to a celebrated male painter. When she arrives at the gallery, the room is jammed with people she recognizes, and she thinks, with only minimum exaggeration, that all of them fall into one of two categories: â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Anyone who was not famous was someoneâ&#x20AC;&#x2122;s assistant.â&#x20AC;&#x2122;â&#x20AC;&#x2122; New York is crawling with a hidden underclass of people who are essential to the perpetuation of creative achievement. Lately, it seems, they have generated a genre all their own: the assistand-tell novel, which recounts the indignities of an entry-level job at a fashion magazine, a film studio or some other fabled precinct of the culture industry. Such novels tend to pit an unsung innocent against an acclaimed if creat-

U.S. BEST SELLERS

ively depleted elder and bemoan the injustice of a world in which assistants supply the imaginative vitality for dictator types who garner the credit and rewards.

In her witty and impressively observed debut novel, Samantha Peale has given us what is probably the first novel narrated by a studio assistant in New York in the 21st century. When the novel opens, Emma Dial is about to begin her seventh year as a full-time factotum to Michael Freiburg, a pompous and self-satisfied painter in his 50s.

If his pictures have a defining feature, it is probably the alarming circumstances of their creation: Someone else paints them. Almost every day Emma Dial can be found in his studio, listening to NPR and diligently applying paint to canvas under his direction.

If Michael depends on Emma to furnish his work with whatever visual richness it has, he poaches on her sexual vitality as well. She lives within walking distance of his studio, and Michael, who is married, frequently stops by unannounced. Their lovemaking is markedly downtown in spirit, with all that implies about unconventional locales and the pungent scent of oil paint and turpentine. As Emma recounts, â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Our first sexual foray took place at the studio, leaning against the wall between canvases, and was harshly

overlit.â&#x20AC;&#x2122;â&#x20AC;&#x2122; The author worked for four years as a studio assistant to the sculptor Jeff Koons, which can tempt one to read the novel as a roman Ă clef offering insight into the workings of the florid Koonsian brain. But this would be pointless. For one thing, Michael Freiburg is not a sculptor, and Ms. Peale situates him in a studio stocked with sable brushes, colors chosen â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;from the Pantone catalogâ&#x20AC;&#x2122;â&#x20AC;&#x2122; and other staples of the painterâ&#x20AC;&#x2122;s craft.

On the other hand, the novel does have a based-on-experience directness about it, so much so that in weaker moments it strays from sharp-eyed observation into the mush of unfiltered whining. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Maybe he had to look down on me, patronize me, think of me as inferior to him so that he could compete to be the best,â&#x20AC;&#x2122;â&#x20AC;&#x2122; Emma notes, in a tone reminiscent of self-help books. She wants to be a painter in her own right, and her growing despair over the uncommitted, unexpressed part of herself finally forces her to act.

What does it take to be a great artist?

This novel supplies a new and not implausible definition: An artist is someone who refuses to work as anyoneâ&#x20AC;&#x2122;s assistant.

ONLINE: BOOKS BLOG

For breaking publishing news, read the Paper Cuts blog. global.nytimes.com/arts

ÂŹ THE NEW YORK TIMES LIST

MILEY CYRUS has signed up to star in a fourth series of the hit U.S. show â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Hannah Montana,â&#x20AC;&#x2122;â&#x20AC;&#x2122; according to news reports. The Hollywood Reporter magazine said that the 16-year-old actress and singer will begin filming at the beginning of next year. The show, in which Ms. Cyrus plays a teenager who is also a secret pop singer, attracts an average of 4.4 million viewers per episode. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Hannah Montana: The Movie,â&#x20AC;&#x2122;â&#x20AC;&#x2122; released earlier this year, was a box office success and it was unclear whether Ms. Cyrus would make more Montana shows, as she expressed interest in making more films. (BBC)

THIS WEEK

FICTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Gone Tomorrow, Wicked Prey,

The 8th Confession,

Dead And Gone, Cemetery Dance,

First Family, The Host,

Pygmy, The Sign, !

Seducing An Angel,

The Help, !

Tea Time For The Traditionally Built, "

Assegai, # $ % Road Dogs, &

Just Take My Heart,

GETTY IMAGES-AFP, REUTERS, AP, REUTERS

Rankings reflect sales for the week ending May 23 at almost 4,000 bookstores, plus wholesalers serving 50,000 other retailers, statistically weighted to represent all such outlets.

LAST WEEKS WEEK ON LIST

1 4 3 2 5 7 6 8 9 13 11

1 2 4 3 2 5 54 3 1 1 8 5 2 2 7

THIS WEEK

NON FICTION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Liberty And Tyranny, % Outliers, ' ( Resilience, & ) $ & ( The Girls From Ames, * ( Always Looking Up, % + % My Remarkable Journey, ! ( + Losing Mum and Pup,

The End Of Overeating, "% !

Horse Soldiers,

Unfinished Business, , A Bold Fresh Piece Of Humanity, -â&#x20AC;&#x2122; Columbine, Prisoner Of The State, * * Are You There, Vodka? Itâ&#x20AC;&#x2122;s Me, Chelsea, Born To Run,

LAST WEEKS WEEK ON LIST

2 4 1 5 3 7 6 10 9 8 15 -

9 27 3 5 8 1 4 4 2 32 7 1 42 1

12

....

| WEDNESDAY, JUNE 3, 2009

INTERNATIONAL HERALD TRIBUNE

tennis rugby horse racing

Sports SPORTS

Roundup

The Lions preserve the touring tradition

C R I C K ET

Pakistan court extends block on World Cup relocation A Pakistan court on Tuesday extended an order blocking the International Cricket Council from moving the 2011 World Cup headquarters to India.

Pakistan was removed as a World Cup co-host by the I.C.C. last month because of security fears. Mumbai was nominated by the sport’s governing body as the tournament’s new headquarters. The Pakistan Cricket Board filed a case in a civil court in Lahore last month blocking the move.

The P.C.B. requested the extension of the court order until June 18, after a June 15 meeting between the I.C.C., Pakistan and the 2011 World Cup co-hosts in London. (AP)

RUGBY UNION

BY HUW RICHARDS

Indian board rehabilitates 79 who played for rebel league The Indian cricket board has ‘‘granted amnesty’’ to 79 players who want to sever their ties with the unofficial Twenty20 Indian Cricket League.

Narainswamy Srinivasan, secretary of the Board of Control for Cricket in India, said Tuesday the players had sought to return to official competitions. (AP) O LY M P I CS

G.M. says despite bankruptcy it is good for $60 million General Motors has said its filing for bankruptcy protection will have ‘‘no impact’’ on its sponsorship of the 2010 Winter Olympic Games in Vancouver, British Columbia.

G.M. has committed more than $60 million to the Games, mostly in the form of cars and trucks, though about $12 million is a cash contribution. (AP) DOPING

Prosecutors ask to show Bonds’ urine samples U.S. government prosecutors have urged an appeals court to let them present evidence they say shows that Barry Bonds knowingly used steroids, arguing it was mistakenly thrown out by a trial court judge on the eve of his perjury trial earlier this year.

Among the evidence that prosecutors say is key are three urine samples they say belong to Bonds and tested positive for the steroids methenolone and nandrolone. The prosecutors allege that Bonds’ personal trainer collected the samples for testing. (AP) BASEBALL

Dodgers suffer a wild night and lose to Diamondbacks Cory Wade and rookie Brent Leach combined for five wild pitches, tying as the Dodgers bullpen handed the Diamondbacks a 3-2 victory on Monday.

The wild pitches tied a club record set on July 9, 1918. ‘‘It’s not really a record that I want to put my name behind,’’ catcher Russell Martin said. ‘‘It was a tough night. I just wasn’t getting there and wasn’t putting my body in the right position to block the ball, and that’s what happens.’’ Wade threw three in the seventh inning — but the righthander escaped his own bases-loaded jam when Felipe Lopez broke his bat lining out to second base. (AP)

JAE C. HONG/AP

Hiroki Kuroda starting for the Dodgers.

B A S K ET BA L L

76ers name Jordan as coach The Philadelphia 76ers introduced Eddie Jordan as their new coach, the team’s third since the start of last season.

Jordan signed a three-year contract with the 76ers, taking his third N.B.A. coaching job. (AP) SOCCER

Denilson to play in Vietnam The former Brazilian international Denilson, once the world’s most expensive soccer player, has signed to play for Haiphong Cement Football Club in Vietnam, the state media reported Tuesday. Denilson, a member of Brazil’s 2002 World Cup winning side, will play for Haiphong Cement for the second half of the V-League which resumes this month, the Thanh Nien (Young People) newspaper said. Thanh Nien said the club, which currently lies sixth in the 14-club V-League, would pay Denilson a monthly salary of between $50,000 to $60,000. (AP)

PATRICK KOVARIK/AGENCE FRANCE-PRESSE

With the use of booming serves and crushing forehands, Robin Soderling of Sweden, ranked 25th in the world, on Tuesday blasted his way into the semifinals of the French Open.

Soderling shows he’s not done yet TENNIS PARIS

Swede continues run while Sharapova is beaten by Cibulkova

BY CHRISTOPHER CLAREY

This surprising French Open continued to stay true to its new theme on Tuesday, as Robin Soderling unexpectedly played much the same way he had against Rafael Nadal — and Maria Sharapova played nothing like the determined, scrappy battler of the first four rounds.

Sharapova is still in the early stages of what, until Tuesday, has been a stirring comeback from right shoulder surgery.

But on the Suzanne Lenglen court where she has lost marathon matches in the past, she ended up losing in a sprint of a match in the quarterfinals to the diminutive, quick-footed Dominika Cibulkova.

The unseeded Sharapova was just one point away from being beaten 6-0, 6-0 by Cibulkova, but with the crowd cheering her on, she raised her game and volume long enough to save face and four match points before losing 6-0, 6-2.

Cibulkova, a Slovakian once better known in France as Gael Monfils’s exgirlfriend, will now play her first Grand Slam semifinal against No. 1 seed Dinara Safina of Russia, who rallied to defeat Victoria Azarenka of Belarus on Tuesday. ‘‘I guess you could only ask your body to do so much,’’ said Sharapova, who arrived in Paris with a ranking of 102 after playing just one singles tournament in the past 10 months. ‘‘Everything fell a little short today. The pace wasn’t there on my strokes, and, you know, I was five steps slower today. I think everything kind of combines: the fact that she just played really solid and made me hit a lot of balls, and I came up short today.’’

Soderling had no such difficulties. It is a truth universally acknowledged that a

singles player in possession of a major upset must be in danger of a letdown, but after generating one of the biggest shock waves in tennis history, Soderling showed no signs that he was living in the past.

After putting an end to Nadal’s historic, 31-match winning streak at Roland Garros on Sunday, Soderling kept right on taking big cuts at his groundstrokes and overwhelmed another fine claycourt player, Nikolay Davydenko of Russia, 6-1, 6-3, 6-1 in the quarterfinals.

It was a statistical rout as well as a rout, with Soderling, the dark-haired Swede with the stubble on his face, never dropping his serve and winning 94 points to Davydenko’s 56 overall. ‘‘I have no chance,’’ the 10th-seeded Davydenko said in his still-improving English. ‘‘I try run, but I’m not Nadal.

Also like not possible for me.’’

Davydenko, a two-time semifinalist here, has not had his usual consistent year. A foot injury forced him to miss much of the early season, including the Australian Open. But he had looked resurgent here and was still on the short list of players who might take advantage of Nadal’s absence to win his first French Open.

Now, after three quality matches in a row from Soderling, including a victory over David Ferrer of Spain in the third round, it is time to start wondering if Soderling might belong on that short list, too. ‘‘He hardly missed a ball,’’ Andy Murray told BBC Radio after watching part of Soderling’s victory on Tuesday.

Murray could not do the same in his quarterfinal later in the afternoon, and as a result, Soderling will now face the 12th seeded Fernando Gonzalez of Chile in the semifinals. Gonzalez was in fine form against Murray, with his trademark forehand doing consistent damage from nearly all zones of the court. ‘‘It’s quite easy sitting from the side to look and think, ‘You could have done this and could have done that,’’’ Murray

said. ‘‘But the guy was hitting the ball so hard.’’ Not always he wasn’t. Though Murray is one of the most avid users of the drop shot on tour, he was on the receiving end for much of this encounter as Gonzalez kept him guessing and scrambling toward the net with his own abrupt changes of pace.

Final result: a 6-3, 3-6, 6-0, 6-4 victory for Gonzalez. Secondary result: of the top four players who have shared most of the spoils on tour this season, only Roger Federer remains in contention in Paris.

In Wednesday’s quarterfinals, Federer, the No. 2 seed, will face Monfils, the last French player left in the singles; and Juan Martin del Potro of Argentina will face Tommy Robredo of Spain.

None of the men remaining has won the French Open and, of those remaining, only Federer and Gonzalez have reached Grand Slam finals. ‘‘He’s probably feeling the pressure of this being his chance to win the

After three quality matches in a row at Roland Garros, it appears that Soderling is more than just a flash in the pan.

French,’’ Murray said of Federer. ‘‘Anything can happen. That’s what great about Slams.’’

Federer has won 13 major singles titles: one short of Pete Sampras’s alltime record.

One of his victims was Gonzalez, whom he beat in the 2007 Australian Open final.

But Gonzalez, born and raised in South America, is at his most natural on clay.

Soderling, born and raised in the northern climes of Sweden, would not have said the same until now. At age 24, Soderling had never advanced past the third round in a Grand Slam tournament. Now, he has ended one of the most remarkable streaks in sports and received a grateful text from Swedish tennis legend Bjorn Borg for preserving

Borg’s share of the record for consecutive French Open victories. ‘‘He said congratulations and thank you for not letting Nadal break my record,’’ Soderling said. ‘‘I think he will be down here maybe tomorrow.’’

There would be no surprise in the first women’s quarterfinal on Tuesday, only a fine, hard-hitting match as Safina held off Azarenka 1-6, 6-4, 6-2.

Azarenka, seeded 9th and on the rise at age 19, showed no hint of edginess in the early stages of her first Grand Slam quarterfinal. She missed only two first serves in the whole set, ripped winners off both wings and won the first set in just 23 minutes.

But 23 minutes later, it was a different match as Safina absorbed the shock and regained her composure and rhythm.

She took a 4-1 lead in the second set, only to see Azarenka fight back to 4-all.

But, in what turned out to be the critical game of the match, Azarenka would lose her serve at love: making three unforced errors.

Safina was on her way, although she had to fight through plenty of huge-hitting rallies before she had secured her place in the semifinals. It was quite a shift from the first four rounds, in which Safina lost just five games. ‘‘I had a lot of chances, but she definitely stepped it up and played some good points on the key moments,’’ said Azarenka, who showed flashes of anger in the final two sets, throwing her racket on several occasions.

Safina, once combustible herself, kept it together and remains the favorite to win her first Grand Slam singles title.

But she is hardly a heavy favorite with Serena Williams and Svetlana Kuznetsova still in contention and preparing to face each other on Wednesday in the other half of the draw.

ONLINE: STRAIGHT SETS

Visit the New York Times blog focusing on tennis and this week, the French Open. straightsets.blogs.nytimes.com

Vincent O’Brien, 92, visionary horse trainer OBITUARY

BY WILLIAM GRIMES

Vincent O’Brien, the Irish trainer who guided racehorses like Nijinsky, El Gran Senor Sadler’s Wells, Roberto and The Minstrel to victory in the premier European flat races after a stellar career as a hurdles trainer, died Monday at his home in Straffan, County Kildare. He was 92.

Family members announced his death, The Associated Press reported.

O’Brien was put at the top of the list of horse racing’s hundred most important figures in an international poll conducted by The Racing Post in 2003. In his half-century as a trainer, he compiled a stunning record. He won 16 English classics, including the Epsom Derby on six occasions, and 27 Irish classics. He won the Arc de Triomphe three times and 25 races at Royal Ascot.

In steeplechase, he won both the Grand National and the Cheltenham Gold Cup, the latter with the same horse, Cottage Rake, in 1948, 1949, and 1950, and again in 1953 with Knock Hard.

In 1970, Nijinsky became the first

PA, VIA AP

Vincent O’Brien at a race meeting in 1978.

horse in 35 years to sweep the English Triple Crown of the 2,000 Guineas, the Epsom Derby and the St. Leger. The feat has not been duplicated since.

O’Brien traveled to Belmont Park in 1990 with Royal Academy and won the Breeders’ Cup Mile, with the jockey,

Lester Piggott, at 54 riding one of the great comeback races in history.

O’Brien also bred generations of champions at Coolmore Stud, a bloodstock operation he helped start in the early 1970s to perpetuate the line of Northern Dancer. ‘‘If the word genius can be ever be used when speaking of the conditioning of a thoroughbred, then it is completely appropriate for Vincent O’Brien,’’ said Brough Scott, the founder of The Racing Post and a longtime commentator for BBC television. ‘‘He internationalized the game and completely changed the perception of what horse racing could be, in Ireland, England, and the world.’’

Michael Vincent O’Brien was born in Churchtown, County Cork, where his father was a small farmer who trained a few racehorses on the side. O’Brien helped his father before striking out on his own. He sent out his first winner, Oversway, at a rack in Limerick in 1943, and in 1951 bought Ballydoyle House, a sprawling farm near Rosegreen, County Tipperary, which he turned into an upto-date training center.

That year, he married Jacqueline

Wittenoom, who survives him, as do his three daughters, Elizabeth, Susan and Jane; two sons, Charles and David; and several grandchildren.

After dominating hurdles racing from the late 1940s to the mid-1950s, he began training on the flat with equal success.

He monitored his horses as if they were Olympic athletes, bringing science to a tradition-bound sport. His fellow Irish trainers were agog when he began flying horses to races in England and on the Continent.

Most significant, he formed the Coolmore Stud breeding syndicate in 1975 with John Magnier, his son-in-law, and the horse owner and breeder Robert Sangster.

Through horses like Sadler’s Wells, Nijinsky and The Minstrel, he introduced the Northern Dancer line into European breeding and, with an unerring eye for picking out yearlings, he established Coolmore as a leading source of champion stallions.

On Sept. 17, 1994, O’Brien sent out his last winner, Mysterious Ways, at the Curragh near Dublin. He retired a month later.

At first sight the meeting of the Golden Lions with the British and Irish Lions in Johannesburg on Wednesday looks like the archetypal modern sporting event.

There are those fierce creature-derived nicknames — in the case of the Golden Lions concealing an older identity as Transvaal, nine-time winner of South Africa’s provincial championship, the Currie Cup. The venue is known officially as Coca Cola Park, but rugby fans identify it more readily as Ellis Park, venue for a host of famous matches including the 1995 World Cup final.

Yet at the same time the game is a throwback to the past. Touring is hardwired into rugby union’s DNA. Junior teams cherish their Easter tours, to the frequent discomfort of seaside hotels.

National teams, traditionally, travelled much further, and for longer.

In part this was a result of rugby’s geography, historically divided between Britain and Ireland — with France an adjacent anomaly — and a trio of farflung former colonies: New Zealand, South Africa and Australia. In the days before air travel, traveling between them took several weeks.

To justify and finance such trips, a lot of games were needed. In addition to international matches, the tourists would meet clubs, provinces and regional teams. The New Zealand Native tour of Britain in 1888, encompassed 107 games and lasted just over a year. As recently as 1977, the Lions played 26 matches, including four tests, in New Zealand.

The cost, and the effort involved, meant that tours were also infrequent — scheduled and anticipated years ahead.

A victory over the tourists by a club or province went into local folk-memory, such as the New Zealand All Blacks’ first loss to a club, in Swansea in 1935,

SIPHIWE SIBEKO/REUTERS

Ian McGeechan coaching the Lions.

and to an Irish province, in Munster in 1978; in New Zealand, Otago’s victory over the 1950 Lions and Waikato’s over South Africa in 1956 are still recalled.

As air travel became easier and calendars more crowded, tours grew more frequent but also shorter, and non-international matches were eliminated.

The longest regular trips away are now those by the southern hemisphere nations to Europe each November: at the most four test matches played on consecutive weekends. The change can be seen by comparing two New Zealand careers. Colin Meads played for the All Blacks from 1957 to 1971, appearing in 133 matches, of which 55 were internationals. Leon MacDonald played 56 times between 2000 and 2008, every one an international.

Only the Lions — an all-star selection from Wales, Scotland, England and Ireland — maintain the tradition of the noninternational games and the Wednesday-Saturday match tempo.

The scale is diminished. This team will play only 10 matches, including three tests, but that is enough to maintain that sense of difference and to make a visit by the Lions an event. This is particularly so when they go to towns like New Plymouth and Invercargill in New Zealand, isolated centers that are passionate about rugby but rarely now see it played at the highest level.

That the Lions visit only every 12 years — going to Australia, New Zealand and South Africa on a four-year rotation — adds to that sense of occasion.

Many British and Irish players — including those like England’s Lawrence Dallaglio who have won a World Cup — call the experience of joining together with the best of their fiercest rivals the supreme honor of their careers. National teams are a process, always with one eye on the future. The Lions are an event, a quadrennial one-off lasting a few weeks.

They are judged on the test series. As Clive Woodward, coach of the team who visited New Zealand in 2005 said ‘‘if we win I’ll be a genius, if we lose I’m an idiot.’’ His team lost 3-0. That will apply as much to this team as to any other. Yet it is the other days, like Wednesday night in Johannesburg or four years ago in New Plymouth, that make the Lions special — in the words of their current manager, Gerald Davies, a former Lion himself ‘‘rugby’s last great adventure.’’

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

13

soccer sports

Real Madrid prepares to spark summer frenzy Never mind the recession. Never mind that each sacking costs millions in compensation. Never mind that there can be only one winner on one continent at a time. What Barça has is what the rest want, and they want it pronto!

If we, the followers of this global game, are lucky, the new men will mean what they say. If Barcelonaâ&#x20AC;&#x2122;s wonderful, sweeping momentum and its qualities are to be emulated by those with the means to try, then flair should count for more than pragmatism.

The question is, how? How soon, how practical is it to convert win-at-all-costs pragmatism into the greater effort required to play it like Barca?

Jorge Valdano, chosen by PĂŠrez to oversee Realâ&#x20AC;&#x2122;s revolution, said: â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;The demand is even greater on us now than before. I like the way the Madridismo responded to the success of Barcelona. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;We have applauded their good football and their achievements, now it is necessary to try to take away their titles.â&#x20AC;&#x2122;â&#x20AC;&#x2122; Valdano, a World Cup winner with Argentina in 1986, was the right hand man to Florentino PĂŠrez the first time the construction billionaire ruled Real Madrid, from 2000 to 2006. With Valdano persuading the stars to come to the BernabĂŠu, with Vicente Del Bosque coaching them, PĂŠrez recruited a superstar â&#x20AC;&#x201D; a â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Galacticoâ&#x20AC;&#x2122;â&#x20AC;&#x2122; â&#x20AC;&#x201D; a season. It fleetingly produced soccer comparable to Barcelonaâ&#x20AC;&#x2122;s today.

The policy ran aground when PĂŠrez overdid his star-struck campaign. The first three Galacticos, LuĂ­s Figo, ZinĂŠd-

Rob Hughes G LOB AL SOC CE R LONDON Less than a week after Barcelonaâ&#x20AC;&#x2122;s great triumph in Rome, five of the eight richest clubs on earth have made drastic changes to their managerial structure.

Removing the coach is a customary rite of summer. On Monday morning, Chelsea and A.C. Milan installed new men to run their teams, while Real Madrid went for the full revolution.

By Monday noon, Real had sworn in a whole new board, and by evening the incoming president had inaugurated a clean sweep from the administrative staff to the coach. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;It is a matter of managing the most prestigious sports institution in the world for the next four years,â&#x20AC;&#x2122;â&#x20AC;&#x2122; said the president, Florentino PĂŠrez. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;We have experienced a period of confusion. We must recover the dreams, stability and lost timing. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Real Madrid must dismiss all doubt to be considered the best club of the 21st century.â&#x20AC;&#x2122;â&#x20AC;&#x2122; At Barcelona, they polished the silverware of the Spanish league title, the Kingâ&#x20AC;&#x2122;s Cup, and the Champions League trophy.

At Madrid, they talked about it.

At Chelsea, the new coach, Carlo Ancelotti, said first in Europe is now the only option.

And at Milan, Ancelottiâ&#x20AC;&#x2122;s former club, his replacement, Leonardo, made the point that Barcelona had set a benchmark. Winning is no longer enough; it has to be done in style.

Each of those clubs is driven by wealth, as are Bayern Munich and Juventus, which have also changed their head coaches in the past month. They are part of the elite of 20 clubs, all of them European, whose annual turnover exceeds ¤110 million, or $156 million.

You win or you change, is the philosophy. Its reach is as far east as Istanbul, whose club Fenerbahce this week fired Luis AragonĂŠs, the 70-year-old coach it hired barely 12 months ago.

â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Madrid has never looked to Barcelona for solutions.

It is the other way around.

We cannot show weakness.â&#x20AC;&#x2122;â&#x20AC;&#x2122; ine Zidane and the Brazilian Ronaldo, were unquestionably world class. The next two, David Beckham and Michael Owen, were business acquisitions.

Beckham proved better at selling shirts than winning anything; Owen occupied the bench watching RaĂşl, the clubâ&#x20AC;&#x2122;s home grown talent, score the goals.

By Monday night, Madrid had paid Villarreal ¤4 million to take its coach, the Chilean Manuel Pellegrini, to start rebuilding the squad at the BernabÊu.

Valdano then gave an interview to the newspaper Marca, and citing Francisco PavĂłn, a defender who rose from the youth teams to play with the Galacticos. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Florentino and I made a lot of er-

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Zidane, playing for the last time for Real in May 2006, has returned to the club as an adviser

rors,â&#x20AC;&#x2122;â&#x20AC;&#x2122; he said. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;At that time, we had a slogan â&#x20AC;&#x2DC;Zidane y Pavonesâ&#x20AC;&#x2122; It meant buy the best, and school the rest. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;We made the mistake of trying to mature the young lads without giving them time,â&#x20AC;&#x2122;â&#x20AC;&#x2122; Valdano mused.

Barcelonaâ&#x20AC;&#x2122;s youth policy provided seven starters the lineup in the Champions League final. Valdano does not now envisage that in Madrid. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;I disagree with those who say Madrid must look for their own Iniesta or Guardiola,â&#x20AC;&#x2122;â&#x20AC;&#x2122; he said.

AndrĂŠs Iniesta is blossoming after years in the Barcelona school. Pep Guardiola has managed instant transition from player to head coach there. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;But Madrid has never looked to Barcelona for solutions,â&#x20AC;&#x2122;â&#x20AC;&#x2122; Valdano said. â&#x20AC;&#x2DC;â&#x20AC;&#x2DC;Rather, history would suggest it is the other way around. We cannot show weakness.â&#x20AC;&#x2122;â&#x20AC;&#x2122; Time, in any case, would not allow it.

Barcelonaâ&#x20AC;&#x2122;s style, its teamwork, its success, takes a decade to nurture, so that the end product is a team that functions out of habit. Madrid has, at most, a season in which to shape up to the standards set by the Catalans.

This is good news for the handful of stars and their agents who might be doing more than dreaming of becoming the new Galacticos of the BernabĂŠu.

Pellegriniâ&#x20AC;&#x2122;s wish list, Madridâ&#x20AC;&#x2122;s money and Valdanoâ&#x20AC;&#x2122;s contacts will doubtless pursue the likes of David Villa from Valencia, Xabi Alonso from Liverpool, Franck RibĂŠry from Bayern Munich and Zlatan Ibrahimovic from Inter Milan.

That is unless PĂŠrez, who in the past always got his man, does not set another new world record transfer fee by buying Milanâ&#x20AC;&#x2122;s Brazilian KakĂĄ, or Manchester Unitedâ&#x20AC;&#x2122;s Cristiano Ronaldo.

The movements in and out of Madrid in the next 30 days will raise the price and speed up the circulation of players sold like race horses at auction.

Chelsea and Manchester United, even the oil rich Manchester City, will compete for those talented few, although the grapevine suggests Chelseaâ&#x20AC;&#x2122;s first moves being for Glen Johnson, a right back it sold cheaply to Portsmouth, and for Alex Pato, a 19-year-old Brazilian starlet coached at Milan by Ancelotti.

If star quality is born, not made, that might be a reason why PĂŠrez has appointed the finest player of his past to be his presidential adviser. Zidane has four sons, and three of them, Enzo, Luca and Theo, are already signed up to Real Madridâ&#x20AC;&#x2122;s youth program.

Who knows, the president might even be around when a mini Galactico begins to shine.

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SOCCER

ONLINE: COMPLETE SPORTS RESULTS global.nytimes.com/sports

8* (AP)

No. 603

Created by Peter Ritmeester/Presented by Will Shortz (c) PZZL.com Distributed by The New York Times syndicate

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CROSSWORD | Edited by Will Shortz

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51 In vogue 52 Big name in desktop computers 53 Map line 54 Showed up 56 Ukr., once, e.g.

58 New Deal inits.

59 Conquistadorâ&#x20AC;&#x2122;s prize

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| WEDNESDAY, JUNE 3, 2009

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THE GLOBAL EDITION OF THE NEW YORK TIMES

Business

W ITH

Deep in slump, Nokia aims for high end BERLIN

Unemployment rises to 9.2% in euro zone

BY KEVIN J. O’BRIEN PARIS

Nokia on Tuesday began shipping its brainiest, most Internet-friendly smartphone to date, the first in a series of high-end devices expected this summer despite an economic downturn that has ravaged mobile phone sales.

The wave of new phones is arriving not only as revenue falters but as the industry divides into two segments — increasingly complex, costly devices like the Apple iPhone and the Palm Pre on

one side and devices that are used for talking and texting, and not much else, on the other.

For Nokia, however, its new N97 is about more than just the phone. For the first time, Nokia, the world’s largest mobile phone maker, will preinstall a link to its new Ovi applications store, a sign it is looking to win more revenue from mobile data services than from hardware sales. ‘‘In the current economic environment, introducing high-priced devices is obviously not optimal,’’ said Neil Mawston, an analyst at Strategy Analytics in Milton Keynes, England. ‘‘But the industry is taking the long-term view by trying to upgrade consumers to more sophisticated devices to derive more revenue from mobile data.’’

The N97, which will cost about ¤550, or $785, without a subsidy from a service provider, is Nokia’s most direct response so far to the iPhone, whose innovative touch screen helped Apple, its maker, define the current generation of smartphones. Like the iPhone, the N97 is minimalist, with a touch screen, a qwerty messaging keyboard, GPS satellite navigation, 32 gigabytes of storage and a home screen that can display live links to social networking, news and weather Web sites.

The introduction of the N97 comes as

BY MATTHEW SALTMARSH

ALBERTO ESTEVEZ/EUROPEAN PRESSPHOTO AGENCY

Nokia’s new N97 is a smartphone with a preinstalled link to the company’s Ovi store, where applications like maps, photo left, can be downloaded. The premium device is a sign that Nokia is looking to gain more revenue from mobile data services than from hardware sales.

the global cellphone business is at longtime a low. Sales fell 13 percent in the first quarter — the largest decline ever — to 245 million from 283 million a year earlier, according to Strategy Analytics.

Nokia said it sold 19.2 percent fewer mobiles during the quarter.

Despite the decline over all, sales of smartphones — mobiles with the brainpower of portable computers — rose 11 percent. While that is down from 24 percent growth of a year earlier, the increase shows demand for high-end phones remains healthy, said Benjamin Lampe, a spokesman for Nokia’s N-Series phones in Espoo, Finland. ‘‘The economic situation is as it is,’’ Mr. Lampe said. ‘‘What the N97 does in terms of its Internet experience is very much in tune with the latest applica-

tions and services. That in itself will be attractive with consumers.’’

Nokia timed the introduction of the N97 to get a jump on Palm, which plans to start selling its touch-screen Palm Pre on Saturday through Sprint stores and through the U.S. retailers RadioShack, Best Buy and Wal-Mart. Apple also plans to make available its new iPhone 3.0 operating system, with 100 new features, this summer.

The race to dominate the smartphone market is integral to building a business in mobile services, something only Apple and Research In Motion, the Canadian maker of the BlackBerry, have done so far.

RIM had 25 million paying BlackBerry subscribers at the end of February. Apple has sold more than 23 million

iPhones and users have downloaded more than a billion applications for the device so far.

By contrast, Nokia opened its Ovi application store last week. But access to the online store was marred by technical glitches, which Nokia attributed in part to high demand from 50 million users.

One analyst said Nokia would have to work hard to overcome the lead established by Apple. ‘‘The handset market is diverging into iPhone wannabes and the very low-end market for basic phones,’’ said Emma Mohr-McClune, an analyst at Current Analysis, an industry research firm in Freiburg, Germany. ‘‘Apple beat Nokia to the iPhone market and Nokia, with the N97, is trying to play catch-up.’’

The unemployment rate in the European Union pushed higher in April, the E.U. statistics office said Tuesday, indicating that nascent signs of economic recovery had yet to be felt in the Continent’s labor market.

The seasonally adjusted unemployment rate for the 16 countries in the euro area rose to 9.2 percent in April, the highest rate since September 1999, from 8.9 percent in March, according to the Eurostat agency. During the month a year earlier, the rate was 7.3 percent.

For all 27 members of the European Union, the unemployment rate was 8.6 percent in April, up from 8.4 percent in March and 6.8 percent in April 2008.

Although there has been some evidence in recent weeks that the economic decline that intensified in Europe in the second half of last year is beginning to ease, economists note that the labor market lags behind many economic indicators and that unemployment commonly rises after a downturn. ‘‘Although survey measures of hiring intentions have ticked up lately, they still point to very sharp falls in employment to come, suggesting that the labor market downturn has much further to run,’’ said Jennifer McKeown, European economist at Capital Economics in London.

Among the E.U. members, the highest unemployment rates were seen in Spain, at 18.1 percent, and Latvia, with 17.4 percent. The lowest unemployment rate was 3.0 percent recorded in the Netherlands, followed by 4.2 percent in Austria.

The unemployment level in France was 8.9 percent; in Germany it was 7.7 percent. Figures for Britain and Italy were not available. Unemployment stood at 8.9 percent in the United States in April.

The jobless rate has been creeping up despite the efforts of many European countries to use public funds to dissuade companies from permanently laying off workers.

France, for example, has a program that allows companies experiencing difficulties to draw on state funds to pay

their workers 60 percent of minimum hourly wages during periods when they are temporarily laid off.

A number of companies have applied for the funds, especially in the automobile and auto-supply sectors. In addition to implementing such a program, the automaker Peugeot Citroën is cutting the hours of workers and implementing ‘‘voluntary’’ layoffs of 3,500 of its 108,000 employees.

Laurent Cicolella, a Peugeot Citroën spokesman, said the company could not provide an exact figure for those affected by ‘‘chômage partiel’’ because it ‘‘changes week to week,’’ but he added that the number had been falling.

Germany has a long tradition of workplace flexibility and a variety of instruments to help reduce working time; many are specifically framed as employment-saving measures. A federal program provides a state-supported backup for companies that reduce employees’ hours outside the provisions of collective agreements.

The Federal Labor Office in Germany projects that it will spend about $2.85 billion this year for more than a quarter of a million people who end up on the program. In comparison, the agency doled out about $272 million last year.

Without such support, the jobless rate in some European countries would be significantly higher, analysts said.

The April jobless rate for people younger than 25 was 18.5 percent in the euro area compared with 14.7 percent a year earlier, Eurostat said.

Jobless claims fall in Spain Spanish claims for unemployment assistance fell in May for the first time in 14 months, prompting the government to forecast the end of Spain’s crisis, Reuters reported from Madrid. The number of people seeking assistance fell by 24,271, after an ¤8 billion, or $11.5 billion, program created 140,000 temporary construction jobs across Spain, the Labor Ministry said Tuesday.

Claims fell across sectors including industry and agriculture as companies geared up for the tourist season and interest rate cuts raised consumer confidence.

Chinese firm likely buyer of Hummer GUANGZHOU, CHINA

BY KEITH BRADSHER

General Motors has reached a preliminary agreement for the sale of its Hummer brand of large sport utility vehicles and pickup trucks to a machinery company in western China that has ambitions to become a carmaker, a person familiar with the Chinese government approval process said Tuesday.

Sichuan Tengzhong Heavy Industrial Machinery, headquartered in Chengdu, has concluded the agreement with G.M., said the person, who insisted on anonymity.

Sichuan Tengzhong is a privately owned company, but the deal required preliminary vetting by Beijing officials, who retain the right to veto any attempt at an overseas acquisition by a Chinese company and who give special attention to deals valued at over $100 million.

G.M. announced the deal early Tuesday morning in Detroit but said that the memorandum of understanding would not allow it to identify the buyer or the price. Industry analysts have estimated that the Hummer division would sell for less than $500 million.

Sichuan Tengzhong is known in China for making a wide range of road equipment, from bridge piers to highway construction and maintenance machinery.

But even before the Hummer deal, the company has been moving more into heavy-duty trucks, including tow trucks and oil tankers.

Sichuan Tengzhong’s offices were closed Tuesday evening and calls to its headquarters were not answered.

G.M. said the deal would save about 3,000 jobs in the United States, including those at its 153 domestic dealerships,

and that Hummer would remain based in the United States.

“Overall, we’re pretty pleased,” said a spokesman for Hummer, Nick Richards. “If you think about the qualities we’d want in a new owner for the brand, this buyer really met all the criteria. They’ve got a proven track record in international business, and they’ve got a long-term vision for the brand.

They’ve got the capital to invest in more efficient vehicles, which is what’s necessary to grow the brand.”

If the purchase is completed, it would be the first acquisition of a well-known U.S. automotive brand by a Chinese company, after many months of speculation about when this might occur.

Chinese automakers have already pur-

‘‘They’ve got a long-term vision for the brand.’’ chased the MG and Rover brands, two of the most famous names in British automotive history.

As a Chinese company, Sichuan Tengzhong could face a challenge in presenting the deal to American owners of Hummers. The brand has long sought to emphasize patriotism, stressing that the Hummer H1 was essentially the same vehicle built in the same factory as the Humvee that carries U.S. soldiers into battle in Iraq and elsewhere.

It was Governor Arnold Schwarzenegger of California who persuaded the longtime manufacturer of Humvees, AM General in Mishawaka, Indiana, to build a civilian version. As he recounted at a Hummer press conference in 2001, Mr. Schwarzenegger was filming the movie ‘‘Kindergarten Kop’’ in Oregon in 1990 when he saw a convoy of 50 Hum-

vees drive by and decided that he had to have a civilian model of the same vehicle, which became the Hummer H1.

G.M. bought the rights to the Hummer brand in 1999 and began making somewhat smaller Hummers in its own factories. G.M. initially procured the H1 from AM General but discontinued the model in 2006.

Under the preliminary agreement announced Tuesday, G.M. will initially continue to manufacture Hummers under contract for Sichuan Tengzhong, which will then market them around the world. The buyer plans to shift additional production of the H3 from a plant in South Africa to the G.M. plant in Shreveport, Louisiana, Mr. Richards said.

Copies of the Hummer by Chinese automakers draw crowds at auto shows, although they are labeled as concept vehicles and are not for sale.

G.M., which is hoping to shed unwanted assets and emerge from bankruptcy in about two months, said it expected the deal to close in the third quarter.

The automaker had planned to close Hummer if a buyer could not be found. It is also trying to sell Saturn and Saab this year and plans to eliminate a fourth brand, Pontiac, in 2010. ‘‘Hummer is a strong brand,’’ Troy Clarke, the president of G.M. North America, said in a statement. ‘‘I’m confident that Hummer will thrive globally under its new ownership.’’

Once considered the ultimate muscle car, the Hummer became a symbol of what was wrong with G.M. and the American auto industry — big, bulky and gas-guzzling.

Sales of Hummers fell 51 percent last year, the worst drop in the industry, and are down 67 percent so far in 2009.

E.U. to review Opel loan

MIKE BLAKE/REUTERS

G.M. said its agreement did not allow it to identify the buyer of the Hummer brand, but a person familiar with the deal said it was Sichuan Tengzhong Heavy Industrial Machinery.

15

European Union regulators will review whether Germany’s ¤1.5 billion, or $2.1 billion, bridge loan to G.M.’s Opel unit meets the conditions of an E.U. plan to help companies suffering from the credit crunch, Bloomberg News reported from Brussels.

The loan allows G.M.’s European operations to be isolated from any financial fallout from the parent company’s bankruptcy filing in the United States, Opel said in a statement Tuesday.

The European Commission will ‘‘verify that the loan was fully in line with the scheme that we have already approved,’’ Jonathan Todd, a commission spokesman, said. ‘‘We will do it as quickly as possible but it will be dependent on the extent of the information we receive.’’

The bridge loan was part of a May 30 agreement between the German government and a group led by Magna International, a Canadian car-part maker, that is buying part of Opel.

CAN YOU AFFORD TO TAKE A VACATION THIS YEAR? THE REAL QUESTION IS, CAN YOU AFFORD NOT TO? It’s natural to feel apprehensive about taking a vacation these days.

But at The Ritz-Carlton, we’ll make sure you not only get your money’s worth, you get your memory’s worth. Whether you are exploring a new city or enjoying our resort destinations around the world, our Reconnect® packages will enhance your experience with hotel and resort credits that you can use for a host of activities, such as spa, dining and shopping. If you only take one vacation this year,

HOTEL

E N J OY A

OR

R ESORT C REDIT

make it last a lifetime. For reservations or more information, contact your travel professional, or visit ritzcarlton.com/ONE.

7 2 H OT E L S A N D R E S O R T S I N 2 4 C O U N T R I E S O P E N I N G 2 0 0 9 - Charlotte • Dove Mountain • Dubai Inter national Financial Centre Lake Tahoe • Shenzhen R I T Z - C A R LT O N R E S E R V E - Phulay Bay Rates are valid per room/per night, based on single or double occupancy, exclusive of taxes, gratuities, fees and other charges; do not apply to groups; cannot be combined with any other offer. Advanced reservations are required. Offer valid through September 30, 2009, subject to availability. Some hotels may require a weekend stay. Credit may not be applied toward room rate, has no cash value and must be used during the dates of the reservation. ©2009 The Ritz-Carlton Hotel Company, L.L.C.

16

....

| WEDNESDAY, JUNE 3, 2009

business

WITH

INTERNATIONAL HERALD TRIBUNE

autos

Next trick for U.S. is G.M. exit plan WASHINGTON

BY DAVID E. SANGER

President Barack Obama has boiled down his three goals as the reluctant majority shareholder of General Motors this way : ‘‘To get G.M. back on its feet, take a hands-off approach and get out quickly.’’

If only it were that easy.

Over the next few months, Mr. Obama N E W S A N A LY S I S

and his auto task force will face many tests as they try to create a new paradigm for the nationalization, however temporary, of a storied and troubled emblem of American industry.

While Mr. Obama will most likely come under extraordinary pressure to sell the government’s 60 percent stake in the ‘‘new G.M.,’’ his own auto task force has warned him that the exit strategy could be messy: The faster the government sells its stake to private investors, the less it is likely to recover its investment of more than $50 billion in the company.

And the longer the government holds onto its stake, the longer the pressures will build, from the U.S. Congress and elsewhere, to intervene.

That process has started already. Mr. Obama has made it clear that he wants G.M. to produce small, fuel-efficient cars with a modest carbon footprint. But exactly what role the government will play in pressing G.M. to get on that longdelayed path, beyond the regulations it sets for the entire industry, were left curiously vague on Monday. ‘‘What we are not doing — what I have no interest in doing — is running G.M.,’’ Mr. Obama insisted at the White House, trying to pre-empt the suggestion that just because Washington has ultimate responsibility for the company does not mean he plans to exercise his prerogatives. Asked later what exactly Mr. Obama meant, Steven Rattner, a key

The government’s approach will be ‘‘no plant decisions, no dealer decisions, no color-of-the-car decisions.’’ figure on Mr. Obama’s auto task force, said: ‘‘No plant decisions, no dealer decisions, no color-of-the-car decisions.’’

Walking that fine line between micromanaging and making sure G.M. gets back on track after 40 years of ignoring market realities is the drama that is about to play out in Detroit and Washington.

Already there are signs that both Mr. Obama and the company will face inevitable trade-offs when political pressures, manufacturing realities and the need to maximize the interests of taxpayers and consumers come in conflict.

Mr. Obama has gotten a taste of them already. Members of Congress have called the leaders of his auto task force to complain about the closing of a single Chrysler dealer — one with powerful political friends. On Sunday, as Mr. Obama briefed congressional leaders on the impending G.M. bankruptcy, one pressed him for a commitment that the ‘‘new G.M.’’ will not move its headquarters out of Detroit. ‘‘He said that was a commercial decision, that he wouldn’t get involved,’’ said one senior administration official who had seen a summary of the call. ‘‘But that’s not the last request like this we are going to get.’’

Or the hardest, by far. G.M. insists

that under the new, more flexible arrangements it has negotiated with the United Automobile Workers union, it will be able to build more small cars in the United States than ever before.

But sooner or later, the company’s environmental goals are bound to come into conflict — again — with its overarching need to prove that the new G.M. can turn a profit, the necessary step before private investors and lenders will step back in.

Profits will also dictate decisions about building cars in lower-cost countries like South Korea or China, decisions that the old G.M. faced every day. As soon as that happens, there will be protests in Detroit and on Capitol Hill that as long as G.M. is owned by American taxpayers, its cars and components should be produced on American soil.

Conversely, if the Obama administration sought to block a Chinese or Indian auto start-up from entering the American market, it would most likely be accused of protectionism. That would be an echo of the charge the United States used to level against Japan.

During interviews in recent days, members of Mr. Obama’s economic team said it anticipated those pressures, and had moved to cut them off early. ‘‘It started right around the time of the bank stress tests,’’ said Rahm Emanuel, Mr. Obama’s chief of staff, in an interview Monday. During one of the president’s daily economic briefings, Mr. Emanuel added, ‘‘he said that taking over companies like this is a big deal, and that no president has ever faced anything like this before. And he said he wanted to see some rules of the road about how the government should act’’ when it suddenly becomes the biggest shareholder in the market.

Mr. Obama clearly wanted protection: a set of principles he could hand to angry members of Congress, campaign contributors or executives to explain why he would not call Fritz Henderson, G.M.’s chief executive, to discuss whether an engine should be made in Saginaw, Michigan, or Shanghai.

The result was an interagency task force informally called ‘‘The Government as Shareholder,’’ headed by Diana Farrell, the deputy director of the National Economic Council and formerly the head of the McKinsey Global Institute, the research arm of McKinsey & Company.

It was Ms. Farrell’s report, delivered to the Oval Office fewer than 10 days ago, that laid out the principles that Mr. Obama described Monday.

The White House insists the principles will apply equally to the government’s investment in the American International Group, the fallen insurer, or in Citigroup and other banks that the government has rescued.

So, just as George W. Bush spent much of his presidency seeking a way out of Iraq, Mr. Obama may spend much of his seeking a way out of the morass of new government investments in the private sector. The hardest part will be knowing how to time the withdrawal of government support — a balancing act between maximizing the investment of taxpayers and risking the company’s fragile state. ‘‘The more uncertain the economic environment, the stronger the tension,’’ Ms. Farrell acknowledged in an interview on Monday. ‘‘The view is that we want to reduce the ownership stake as quickly as practicable, and to do so deliberately as part of a considered exit strategy.’’

MARK BLINCH/REUTERS

Members of the United Automobile Workers marching in Lansing, Michigan, on Monday. The union now owns stakes in the U.S. automakers Chrysler and General Motors.

Union adjusts to its tricky new role of owner NEW YORK

BY STEVEN GREENHOUSE

For decades, the United Automobile Workers had a simple strategy for getting what it wanted from the carmakers — it would go on strike. The tactic proved so successful that the mere threat of a walkout often won better wages, benefits and job security.

Now, with General Motors and Chrysler in bankruptcy and the union a major shareholder in both through its retiree health fund, life has become a lot more complicated for the U.A.W. The union, which was born of labor strife, has pledged not to go on strike against the two companies before 2015, as part of the rescue plan hammered out by the administration of President Barack Obama. Whether this brokered peace helps end the antagonistic relationship between union and management could determine the future not only of G.M. and Chrysler, but also of the U.A.W. itself.

With the union’s health fund set to own 17.5 percent of G.M.’s shares and 55 percent of Chrysler’s, the U.A.W. will both represent workers and be an owner, a novel dual role. ‘‘We don’t run corporations. We represent people,’’ said Brian Fredline, president of the local representing 3,000 workers at a G.M. plant in Lansing, Michigan.

Some industry experts predict that the union, far more than before, will help management increase profitability — with the goal of pushing up the automakers’ stock prices. A higher share price could mean billions more for the retirees’ health plan, helping to ensure ample financing for decades to come.

But other experts say the union will stick to its traditional truculence, focusing on preserving jobs rather than producing maximum profits and share price. As evidence, these experts point to the union’s recent, successful campaign, directed at G.M. and the Obama administration, to prevent the automaker from importing small cars from China. Such imports would have increased G.M.’s

FABRIZIO COSTANTINI FOR THE NEW YORK TIMES

Don Skidmore, president of a U.A.W. local in Ypsilanti, Michigan, found out Monday that the General Motors plant there was among those scheduled to be shut down.

earnings, while very likely reducing the number of domestic automobile jobs. ‘‘I don’t think the union is going to act that different,’’ said Harry C. Katz, dean of the Cornell University School of Industrial and Labor Relations. ‘‘I wish it would, but mostly things won’t look that different.’’

In fact, over the years the U.A.W. has taken two different postures toward Detroit: by turns, hard-charging adversary and strategic partner. Sometimes the union has been an unyielding bargainer, leading to strikes that have lasted for months as well as to much-derided perks, like overtime pay for union members who work fewer than 40 hours a week.

But other times the union has worked with management to assure labor peace, raise productivity and, over the past few years, push down labor costs.

One example: When G.M. was hurting in 2005, the union agreed to establish the retiree health plan, known as a voluntary employees beneficiary association, or VEBA, to save the automaker $1 billion a year in health costs.

Union officials acknowledge their discomfort with the union’s being a major

shareholder. ‘‘The reason we’ve received this equity stake is, we’re trying to help the corporation survive and fund the VEBA,’’ Mr. Fredline said.

The Obama administration has pushed hard to bring out the U.A.W.’s cooperative side, as evidenced by the union’s agreeing to a wage freeze and the no-strike clause.

But the union is likely to continue fighting future layoffs, plant closings and line speedups. There are many ways to put pressure on management without going on strike.

Under the rescue plan, the U.S. government will own 60 percent of G.M.’s stock. It might be politically difficult for the union to confront the government if it were managing the company. But Mr. Obama emphasized Monday that he wanted professional managers, not the government, to run the company.

While workers often feel an initial thrill about employee ownership, after several weeks of drudgery back on the assembly line, the thrill sometimes wears off and the us-against-them attitude toward management reasserts itself.

But Christopher Mackin, president of

G.M. executive has little time, many bosses and a big job NEW YORK

BY MICHELINE MAYNARD

Generations of business leaders around the world were schooled in the principles of management devised in the 1920s by a General Motors president, Alfred P. Sloan Jr. Now General Motors has to learn how to manage itself through bankruptcy protection and into a future as a much smaller company — something that Mr. Sloan, whose strategy emphasized size, might never have foreseen.

The outcome will determine whether Fritz Henderson, G.M.’s chief executive, keeps his job, and whether the administration of President Barack Obama correctly bet $50 billion on the future of G.M. Mr. Henderson invoked Mr. Sloan, author of ‘‘My Years With General Motors,’’ on Monday as he stood before reporters and cameras in the offices of Weil, Gotshal & Manges, the law firm that is directing G.M. through bankruptcy and is a tenant in the G.M. building on Fifth Avenue in Manhattan.

As he passed a portrait of Mr. Sloan that morning, Mr. Henderson said, he was reminded that Mr. Sloan led G.M. through a financial crisis in the early 1920s that threatened the company’s existence. ‘‘If he were sitting here today, he would say, ‘Just do your job,’ ’’ Mr. Henderson said. But Mr. Sloan had years to turn G.M. around and decades to hone the reputation that made his 1963 memoir a best seller.

Mr. Henderson, a relative unknown in corporate America, has only a few

MARIO TAMA/GETTY IMAGES-AFP

The G.M. chief Fritz Henderson, center, leaving a U.S. bankruptcy court in New York.

months, and he will do so under enormous scrutiny, from a new board and from the Treasury, which has become a majority owner of the new G.M. His news conference Monday was, in a sense, his introduction to the country after being thrust into G.M.’s top job,

the Obama administration having pushed out his predecessor, Rick Wagoner, on March 29. Mr. Henderson, 50, joined the automaker a quarter-century ago. He toiled in a variety of financial assignments until 1997, when he was put in charge of G.M.’s Brazilian operations,

traditionally a proving ground for the company’s most promising executives.

From Brazil, Mr. Henderson moved on to run G.M.’s operations for all of Latin America, then its emerging Asia-Pacific business and finally one of the company’s biggest prizes, G.M. Europe. He was working there in late 2005 when G.M., facing a financial crisis, abruptly announced the departure of its chief financial officer, John M. Devine, and installed Mr. Henderson.

Unlike other G.M. chief executives, he will have to contend with a variety of bosses. The Treasury has hired a search firm to find directors, particularly focusing on those with backgrounds in the auto industry and in corporate restructurings. G.M.’s interim chairman, Kent Kresa, the former chief executive of Northrop Grumman, is expected to receive that job full time.

Along with a new board and the government, Mr. Henderson will have to work alongside Albert A. Koch, vice chairman of AlixPartners, the turnaround and financial advisory firm that advised the government in drafting the restructuring plan.

The two men will divide the remaking of the company. While Mr. Henderson focuses on G.M.’s future shape, Mr. Koch’s job will be to dispose of the assets that G.M. does not want to keep, which make up what the company is calling Old G.M. Mr. Henderson said the government’s involvement did not faze him. ‘‘We’re fine with that. I’m fine with that,’’ he said.

Seated in the front row at the news conference Monday was Harvey R.

Miller, who leads G.M.’s legal team, and Ira M. Millstein, the veteran lawyer at Weil, Gotshal who advised G.M. directors in 1992, when they staged a boardroom coup that led to the removal of the chief executive, Robert C. Stempel.

Speaking after the news conference, Mr. Millstein said Mr. Henderson would face an unusual challenge in juggling the demands of so many bosses, including a new board; the governments of the United States and Canada, which together will hold 72.5 percent of the company; and the United Automobile Workers. ‘‘What does a board do when it’s a government-owned company?’’ Mr. Millstein said. ‘‘That’s a new book.’’

Mr. Henderson said that he did not believe that the government would second-guess the company on ordinary product and strategy decisions — like the cars G.M. might develop — but would limit its involvement to major governance issues. He did not elaborate.

Most chief executives are given at least a year by their boards, and often much longer, to bring off a restructuring, said Michael Useem, professor of management at the Wharton School of the University of Pennsylvania.

Mr. Henderson may have only three months, the government’s ideal length for the bankruptcy case. ‘‘He’s obviously on a very short leash,’’ Professor Useem said.

Mr. Henderson seemed keenly aware of his limited window Monday. ‘‘There are no second chances, but we won’t need one,’’ he said. ‘‘It is our job to deliver.’’

Ownership Associates, a company based in Cambridge, Massachusetts, that advises businesses and workers about employee ownership, argued that the U.A.W.’s roles need not conflict. ‘‘When you get workers to understand they are the owners of the enterprise,’’ he said, ‘‘they realize there are two significant bites of the apple: One is when you get paid in current compensation, and one is what you get paid for success’’ through profit-sharing or an employee stock ownership plan — although he noted that VEBA stock ownership differed from traditional employee ownership.

Some employee-owned companies have failed, however, because management, mindful of their employee owners, often gave in to wage demands.

That, some analysts say, helped drive United Airlines into bankruptcy when it was employee-owned.

For this reason, industry experts say, the Obama administration structured the G.M. and Chrysler plans to lessen the union’s voice in management. The retirees’ health fund has six public-appointed trustees and five union-appointed trustees. Though the union health trust owns 55 percent of Chrysler, it will hold just one seat on the Chrysler board.

And at both automakers, the health fund’s shares will be nonvoting.

All this makes clear, one administration official said, that the union will not dominate and ‘‘this will not be Gettelfinger Motors.’’

The U.A.W. president, Ron Gettelfinger, says he wants to sell the health fund’s shares as soon as is practical. The union’s advisers have warned it would be unwise to tie up so much of the fund’s assets long term in a single company’s shares.

This, some say, could cause the U.A.W. to be cooperative, at least for a while. ‘‘In order to sell their shares at a good price,’’ said Maryann Keller, an auto industry analyst who runs her own consulting firm, ‘‘they’re going to at least give the appearance of helping maximize profits.’’

Carmakers see mixed results in U.S. sales SOUTHFIELD, MICHIGAN BLOOMBERG NEWS

Ford Motor and Nissan Motor on Tuesday posted U.S. sales for May that fell less than analysts had forecast, while Honda Motor fared worse than expected.

Ford, the only major U.S. automaker not in bankruptcy, said U.S. deliveries dropped 24 percent from a year earlier, while Nissan slid 33 percent and Honda fell 42 percent.

The results suggested that car buyers began returning to showrooms after a rebound in consumer confidence.

Chrysler, which filed for bankruptcy protection April 30, was expected to post a 51 percent decline in sales for May, according to a survey of five analysts. General Motors, which filed for protection Monday, was expected to announce a 37 percent sales drop from May 2008.

The industry’s seasonally adjusted sales rate tumbled to 9.2 million in May from 14.2 million a year earlier, based on estimates from seven analysts, the 19th month of contraction in the U.S. market.

Annual sales averaged 16.8 million this decade through 2007 before plummeting to 13.2 million last year.

G.M. is ‘‘modestly encouraged’’ by May sales, its chief executive, Fritz Henderson, said on CNBC television before the company released its sales. ‘‘May was up versus April and was probably our best month since December.’’

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

finance business

17

WITH

Top U.S. banks close Geithner claims gains at Beijing talks to exiting bailout plan BEIJING

NEW YORK

BY ERIC DASH

Since the U.S. government pressed billions of dollars in taxpayer support on banks in the United States, several strong institutions have been pushing to give it back. Now a few of them may get the go-ahead next week — a crucial step in disentangling themselves from Washington.

If U.S. regulators approve the plans, it would pave the way for a group of large institutions, among them JPMorgan Chase, to leave the bailout program far earlier than many had envisioned. It would also signal that the bankers and regulators believed that the worst was over for these banks, even though confidence in the broader financial industry remained fragile.

JPMorgan Chase said Monday that it expected to return its $25 billion taxpayer investment this month. The bank expected to raise $5 billion through the sale of common stock Tuesday to prove to regulators that it was healthy enough to obtain capital without government support. Goldman Sachs also said it aimed to repay $10 billion in bailout funds this month.

Morgan Stanley also said Tuesday that it would raise $2.2 billion through a stock offering as part of a plan to satisfy preconditions for repaying $10 billion government loan it received last autumn, The Associated Press reported.

The Federal Reserve, which oversees the safety and soundness of the biggest American banks, said it planned to announce next week an ‘‘initial set’’ of banks that were approved for repayment. The Treasury Department has the final say on whether a bank is allowed to repay the money, and once regulators sign off, the bank may return the money within days.

The Troubled Asset Relief Program, or TARP, was intended last autumn as a long-term investment by the government to get the financial industry through the worst crisis since the Depression. But when compensation and other restrictions were attached to calm political furor over Wall Street bonuses, banks lobbied hard for permission to leave the program.

Banks have been sparring with the administration of President Barack Obama for months over how quickly

they may repay bailout money. The government has prohibited the banks from reimbursing it unless they can prove they are healthy enough to raise money in the capital markets on their own, to avoid having to dole out a new round of support should the recession deepen.

In recent months, many of the strongest banks began jockeying to demonstrate their ability to repay the government’s money. As the credit markets have improved, they have issued debt without guarantees from the Federal Deposit Insurance Corp. And all eight big banks that received bailout money and passed the government’s stress tests have also raised capital by voluntarily selling common stock to private investors, even though regulators did not require them to do so. JPMorgan Chase and American Express, which an-

Early repayment may mean less of a return for taxpayers. nounced a $500 million offering Monday, were the last in that group.

Early repayment of these funds, and of warrants the government received from banks last fall, may mean less of a return to U.S. taxpayers for rescuing the banks.

But it will have the benefit of letting the government rechannel some of the money in the $700 billion bailout program to other smaller banks that need it.

Even before the stress test results were released, bank officials had been pressing regulators to let them repay the money. Bank of New York Mellon, Goldman Sachs, JPMorgan, Morgan Stanley, State Street and U.S. Bancorp have already sent regulators letters of intent to repay the government, a U.S. official briefed on the situation said. ‘‘If we didn’t get out of TARP, we’d be very surprised,’’ Jamie Dimon, the chairman and chief executive of JPMorgan, said Monday, although he acknowledged the government could still change its criteria. ‘‘Obviously, you know, they can do anything they want.’’

On Monday, the Federal Reserve added a new requirement that big banks seeking to repay the government sell a sizable amount of common stock to private investors.

Regulators expect to review the applications and decide next week.

Zachery Kouwe contributed reporting.

BY DAVID BARBOZA

Timothy F. Geithner ended his first trip to China as U.S. Treasury secretary on Tuesday by saying that the visit had begun to lay the foundation for greater cooperation between Washington and Beijing on a wide range of issues, including global finance and climate change.

Carrying on a practice that began under the administration of George W. Bush, Mr. Geithner held high-level talks with some of China’s top leaders. On Tuesday, the meetings included talks with President Hu Jintao and Prime Minister Wen Jiabao. Mr. Geithner said during an interview that Beijing had not lost faith in the U.S. economy. ‘‘What I sense is a fair amount of confidence in the underlying strength of the American economy,’’ Mr. Geithner said at a briefing Tuesday.

The visit came amid growing worries in China over the state of the American economy and the prospect that heavy government spending and ballooning deficits in the U.S. could eventually weaken the dollar and destroy the value of China’s huge U.S. Treasury holdings.

China is the largest holder of U.S. debt and experts say that if Beijing slows its purchases of U.S. Treasury bills, the move could deepen and prolong the global recession. Some Chinese economists have called on Beijing to significantly reduce purchases of American debt. And the head of China’s central bank has even proposed that there be an alternative currency to replace U.S. dollar as an international reserve currency.

In pushing for greater cooperation with Beijing this week, Mr. Geithner seemed to take a softer tone than some of his predecessors in the Bush administration. He failed to raise any contentious issues in public this week, and continuously praised Beijing’s efforts to manage and stimulate its economy. He also largely avoided any discussion of piracy or revaluing the renminbi, and said he would press for China to have a greater role in the International Monetary Fund.

Asked why he was pressing for China to have a greater role at the I.M.F., Mr. Geithner said: ‘‘I just see it as the necessary evolution.’’

Trying to assuage fears about the U.S. deficit, Mr. Geithner also promised that once the U.S. economy recovered, the administration of President Barack Obama is determined to rein in spend-

Three U.S. banks raise cash to repay rescue funds NEW YORK BLOOMBERG NEWS

Morgan Stanley, JPMorgan Chase and American Express said separately Tuesday that they had raised a total of $7.7 billion in fresh capital after the Federal Reserve imposed additional requirements on financial companies that were seeking to repay U.S. rescue funds.

Morgan Stanley, one of the largest U.S. bank by assets, said it sold $2.2 billion of common stock. JPMorgan Chase, the second-largest U.S. bank after Bank of America, sold $5 billion. American Express, the top U.S. credit-card company, sold $500 million.

JPMorgan and American Express, which got aid from the Troubled Asset

Relief Program, were among 9 of 19 financial companies subjected to stress tests that were deemed to have no need for more capital. The stock sales help the companies comply with a rule that they demonstrate they can tap equity investors. Morgan Stanley, which last month raised $4.6 billion after regulators said it needed $1.8 billion, was told to raise more. ‘‘This is just making it more costly to leave TARP, which may discourage some of the lesser players from stretching to try to leave TARP,’’ said Brad Hintz, an analyst at Sanford C. Bernstein in New York. The government is saying ‘‘we need to make sure that in a dynamic world you can continue to raise capital.’’

None of the companies have yet won approval to repay the U.S. rescue funds.

The chief executive of JPMorgan, Jamie Dimon, said on a conference call Monday that he would be ‘‘very surprised’’ if the bank was not able to refund the government in full by the end of this month.

Morgan Stanley said it also expects its share sale to enable the bank to repay TARP by the end of June.

Mr. Dimon, who called the TARP money ‘‘a scarlet letter,’’ in April, made it clear that he was ready to get out from underneath the government control that accompanied the Treasury funding. ‘‘Dear Timmy, we are happy to be able to pay back the $25 billion you lent us,’’ Mr. Dimon read Monday from a mock letter to the U.S. Treasury secretary, Timothy F. Geithner. ‘‘We hope you enjoyed the experience as much as we did.’’

Abu Dhabi sells down its Barclays stake PARIS

BY DAVID JOLLY

Shares of Barclays fell sharply Tuesday after Abu Dhabi unloaded a big part of its investment in the British bank, made near the height of the credit crisis last year.

Barclays enraged its shareholders when it went over their heads in October to seek £7 billion, or $11 billion, in emergency funds, mostly from Middle Eastern investors including Abu Dhabi and Qatar.

Late Monday, International Petroleum Investment Co., or I.P.I.C., which is wholly owned by the Abu Dhabi government, said it would sell mandatory convertible notes equivalent to 1.3 billion Barclays shares.

The stock converted at 153 pence a

AHMED JADALLAH/REUTERS

A Barclays branch in Dubai. Abu Dhabi booked a hefty profit from the stake sale.

share. At the Monday closing price of 316.25 pence, the stock’s high for the year, Abu Dhabi’s £2 billion investment would be worth about £4.1 billion. In practice, Credit Suisse, which handled the mammoth one-day sale Tuesday, placed the shares at 265 pence each, said Gavin Sullivan, a bank spokeswoman. ‘‘Abu Dhabi’s done extremely well, so they’ve gone away happy,’’ Howard Wheeldon, senior strategist at BGC Partners in London, said. ‘‘They showed faith in Barclays.’’

Barclays stock fell 42.75 pence, or 13.52 percent, to close at 273.5 pence in London, reflecting the fact that the sale raised the number of Barclays shares in the market by more than 15 percent, to about 9.7 billion. Barclays shares are still up nearly 80 percent this year, while the FTSE global banks index is up nearly 12 percent.

Many governments and investors that provided aid to shore up banks after Lehman Brothers collapsed in September are now thinking of extricating themselves from their investments. The Barclays divestment appeared to make Abu Dhabi one of the first big sovereign wealth funds to do so at a profit.

Temasek Holdings, a fund owned by the Singapore Ministry of Finance, is thought to have lost at least $3 billion on its stake in Bank of America, which it sold in the first quarter. The Swiss government is considering an exit from its investment in UBS, which it provided with 6 billion Swiss francs, or $5.6 billion, in October.

Institutional investors and Qatari funds are also holding billions of pounds’ worth of mandatory convertible notes in Barclays, which will convert to common shares at the end of June at 153 pence each. That means there will be about 11 billion shares on the market, counting the Abu Dhabi stake. But the investors

are under no obligation to sell.

I.P.I.C., which is run by Sheik Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi ruling family, said it was selling its stake before the mandatory end-June conversion date to focus on its core oil and natural gas business.

In a statement, Khadem al-Qubaisi, managing director of the Abu Dhabi fund, expressed ‘‘great confidence’’ in Barclays. ‘‘The Emirate of Abu Dhabi intends to maintain a close commercial and strategic relationship with Barclays in the future,’’ he said. ‘‘The decision to dispose of some of its interests in Barclays reflects the focus of I.P.I.C.’s long-term investment strategy on hydrocarbon-related opportunities.’’ ‘‘I don’t think it’s a reflection on Barclays,’’ Mr. Wheeldon said of the decision by Abu Dhabi to sell. ‘‘Rather, I think it’s a reflection on Abu Dhabi’s view of the market, which has probably run up faster than anticipated, so maybe it’s time to pause to catch up.’’

Barclays, which operates in more than 50 countries and employs 156,000 people worldwide, has sought to expand during the financial crisis, acquiring Lehman Brothers’ operations in the United States and adding staff in Europe and Asia.

Analysts said the Abu Dhabi sale was unlikely to affect the bank’s plans.

The bank’s chief executive, John Varley, said in a statement that as a result of Abu Dhabi’s 2008 investment in Barclays, ‘‘we have been able to broaden our strategic and commercial relationship, and we look forward to developing this further going forward.’’

Barclays has managed to avoid relying on the British government for aid — unlike its rivals Royal Bank of Scotland and Lloyds TSB, which are now effectively wards of the state. To buttress its balance sheet, Barclays is selling its iShares exchange-traded funds business.

POOL PHOTO BY ANDY WONG-POOL/REUTERS

Timothy F. Geithner, left, the U.S. Treasury secretary, with Prime Minister Wen Jiabao, right, of China on Tuesday in Beijing.

Geithner said he expected greater cooperation between Washington and Beijing on issues including global finance and climate change.

ing and tackle the deficit. ‘‘As we recover from this unprecedented crisis, we will cut our fiscal deficit,’’ he said.

At a speech Monday at Peking University, Mr. Geithner outlined a broad set of initiatives aimed at rebalancing the global economy. Following the analysis of some leading global economists, Mr. Geithner said the U.S. needed to save more and consume less and called upon China to strengthen its own economy by moving away from an export driven model to one that relied more on domestic consumption. ‘‘How successful we are in Washington and Beijing will be critically important to the economic fortunes of the rest of the world,’’ Mr. Geithner said.

Analysts say the new Treasury secretary is clearly interested in pressing U.S. interests in China, on copyright issues, greater access to China’s financial markets and the sale of American clean energy technologies. He used a visit to the Beijing Capital Museum on Tuesday afternoon to highlight climate change as an important aspect of the coming dis-

cussions with Beijing and to show off U.S.-produced solar panels.

But some experts say Mr. Geithner is also trying to earn the confidence of the Chinese leadership so that Washington can find more ways to cooperate on major global issues.

Late Tuesday, Treasury officials announced that in the last week of July, Washington planned to host the first meeting of the Strategic and Economic Dialogue, a broad set of high-level talks with Beijing. Mr. Geithner and Secretary of State Hillary Rodham Clinton are expected to play host to their Chinese counterparts for a series of meetings quite similar to the previous Treasury secretary, Henry M. Paulson Jr., established a few years ago.

C.Fred Bergsten, director of the Peterson Institute for International Economics in Washington, said U.S. relations with China had intensified and strengthened in recent years, growing increasingly important as the two powers had recognized the need to work together to solve global problems.

The Obama administration’s seemingly soft approach, he said, may be a new kind of diplomacy that has emerged in the wake of the financial crisis. ‘‘I suspect part of what you’re seeing with Geithner is a change in style,’’ Mr. Bergsten said during an interview Monday. ‘‘Maybe he’ll raise some of these issues, like piracy and exchange rate reform, more quietly, and that may be more effective.’’

But Yu Yongding, a former adviser to China’s central bank and a member of the Chinese Academy of Social Sciences, said Washington needed to win Beijing’s confidence by protecting China’s investments in American debt and helping reform the global financial system. ‘‘If the U.S. can find a way to protect China’s assets, America’s standing here will increase,’’ Mr. Yu said Monday. ‘‘We are not going to return to the good old days of 2006. We are going to promote the creation of a new world order.’’

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| WEDNESDAY, JUNE 3, 2009

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INTERNATIONAL HERALD TRIBUNE

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WITH

Web communities soften the isolation of aging NEW YORK

BY STEPHANIE CLIFFORD

Like many older people, Paula Rice has grown isolated in recent years. Her four grown children live away from home, her two marriages ended in divorce and her friends are scattered. Most days, she does not see another person.

But Ms. Rice, 73, is far from lonely.

Housebound in Island City, Kentucky, after suffering a heart attack two years ago, she began visiting the social networking sites Eons.com, an online community for aging baby boomers, and PoliceLink.com. Rice, a former dispatcher for the police, now spends as much as 14 hours a day in online conversations. ‘‘I was dying of boredom,’’ she said. ‘‘Eons, all by its lonesome, gave me a reason to keep on going.’’

That more people in Ms. Rice’s generation are joining networks like Eons, Facebook and MySpace is hardly news.

Among older people who went online last year, the number visiting social networks grew almost twice as fast as the overall rate of Internet use among that group, according to the media measurement company comScore.

But now researchers who focus on aging are studying the phenomenon to see whether the networks can provide some of the benefits of a group of friends, while being much easier to assemble and maintain. ‘‘One of the greatest challenges or losses that we face as older adults, frankly, is not about our health, but it’s actually about our social network deteriorating on us, because our friends get sick, our spouse passes away, friends pass away, or we move,’’ said Joseph F. Coughlin, director of the AgeLab at the Massachusetts Institute of Technology. ‘‘The new future of old age is about staying in society, staying in the workplace and staying very connected,’’ he added. ‘‘And technology is going to be a very big part of that, because the new reality is, increasingly, a virtual reality. It provides a way to make new connections, new friends and new senses of purpose.’’

About a third of Americans 75 and older live alone, according to a 2009 study from AARP, an advocacy group for older Americans. In response to the growing number, the National Institute on Aging is awarding at least $10 million in grants for researchers who examine social neuroscience and its effect on aging.

Online networks may offer older people ‘‘a place where they do feel empowered, because they can make these

U.S. patent case could reshape the economy WASHINGTON

BY ADAM LIPTAK

CARLA WINN FOR THE NEW YORK TIMES

Despite her physical isolation and frail health, Paula Rice has been inspired by social networking sites like Eons.com, an online community for aging baby boomers. Researchers are studying whether the sites can provide benefits that might stave off dementia.

connections and they can talk to people without having to ask a friend or a family member for one more thing,’’ said Antonina Bambina, a sociologist at the University of Southern Indiana who wrote the book ‘‘Online Social Support’’ in 2007.

For the family members of older people, online social networks can provide a bit of relief. Chris McWade of Franklin, Massachusetts, the youngest

‘‘It’s the best thing for seniors.

It challenges their mind.’’ member of a big family, recently helped his parents, his grandparents and his uncle move to retirement homes. He said he spent two or three years ‘‘just flying cross-country, holding a lot of hands’’ and seeing the isolation and depression that came with aging.

That sparked the idea for MyWay Village, a social network based in Quincy, Massachusetts. Mr. McWade helped found it in 2006 and now sells it to retirement homes. It has just completed pilot programs in several nursing homes in Illinois and Massachusetts, and Mr. McWade said he has agreements to ex-

pand to several other homes.

Two and a half years ago, Howe Allen, a real estate broker in Boston, moved his parents to the River Bay Club, a retirement home in Quincy that uses MyWay. His mother died soon after, but his father, Carl, was able to start making friends and share stories on MyWay. The older man had never used a computer, but picked it up quickly; the software includes computer training sessions. And after he died last December, a memorial service at the home included photographs he had uploaded to MyWay, excerpts from memoirs he had posted and eulogies from friends he had made through the site. ‘‘It was as moving a day as I can ever remember,’’ Howe Allen said. ‘‘It’s more than just the computer. It affected him in ways that are so far from the electronic age. It allowed this person to grow at an age where you assume most people stop growing.’’

On a recent Monday, Neil Sullivan, a regional manager for MyWay, stood in front of a group of about 20 River Bay Club residents in the home’s library.

Sarah Hoit, a co-founder of MyWay and its chief executive, said that for

Special 16th Edition of the Paris EUROPLACE International Financial Forum in Paris

JULY 2 & 3, 2009 PAVILLON D’ARMENONVILLE

The Aftermath of the Crisis: Times of Dialogue and Opportunities • Post G20: Milestones to Restore Confidence within Financial Markets • International Crisis and New Challenges of Sustainable Growth: On Going Partnerships with International Financial Services Centers • New Recommendations for Sustainable Finance • Redirecting Savings to Support Real Economy and Finance Projects of the Future Samir ASSAF, Head of Global Markets, EMEA, HSBC Dr ZETI AKHTAR AZIZ, Governor, Bank Negara Malaysia Philippe de FONTAINE VIVE, Vice Chairman, European Investment Bank Jörgen HOLMQUIST, Director General, European Commission DG Internal Market & Services Jean-Pierre JOUYET, Chairman, French Financial Markets Authority (AMF) Gérard MESTRALLET, Chairman & CEO, GDF SUEZ, Chairman, Paris EUROPLACE Christian NOYER, Governor, Banque de France Georges PAUGET, Chief Executive Officer, Crédit Agricole SA, Chairman, Fédération Bancaire Française (FBF) Michel PEBEREAU, Chairman of the Board, BNP Paribas Augustin de ROMANET, Chief Executive Officer, Caisse des Dépôts Christian SAUTTER, Deputy Mayor, Ville de Paris Deven SHARMA, Chief Executive Officer, Standard & Poor’s Jean-François THEODORE, Deputy CEO, NYSE Euronext Makoto UTSUMI, President & CEO, Japan Credit Rating Agency

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older people, learning to get online was not an end in itself. ‘‘They want a vehicle to meet new people and share their lives,’’ she said. ‘‘They want to be stimulated.’’

Outside of the weekly sessions, River Bay residents use the site to post stories like ‘‘My Life as a Nurse’’ or ‘‘I Worked at the Howard Johnson in Quincy.’’

Sunny Walker, 89, who refused to use an electric typewriter when she was a school secretary because she hated technology so much, now plays games and sends friends messages through the site. ‘‘I’m telling you, it’s the best thing for seniors,’’ she said. ‘‘It challenges their mind, that’s what it does. It challenged mine.’’

Some research suggests that loneliness can hasten dementia, and Dr. Nicholas A. Christakis, an internist and social scientist at Harvard, said he is considering research on whether online social connections can help delay dementia, as traditional ones have been found to do in some studies. ‘‘Online social networks realize an ancient propensity we all have to connect with others,’’ he said.

The U.S. Supreme Court has agreed to decide what sorts of business methods might be patented, an issue with the potential to reshape significant parts of the economy. ‘‘This is the most important patent case in 50 years, in particular because there is so much damage and so much good the court could do,’’ said John F. Duffy, a law professor at George Washington University who submitted a brief in the appeals court without supporting either side. ‘‘The newest areas of technology are most threatened by the issues at stake here,’’ he said. ‘‘The court taking this is likely to make a lot of people nervous, including software manufacturers and biotechnology companies.’’

In October, the U.S. Court of Appeals for the Federal Circuit in Washington significantly narrowed the processes eligible for patent protection, ruling that only those ‘‘tied to a particular machine or apparatus’’ or transforming ‘‘a particular article into a different state or thing’’ qualified.

The petitioners in the case, Bernard L. Bilski and Rand A. Warsaw, had sought to patent a method of hedging risks in the sale of commodities, including the risks associated with bad weather. The appeals court ruled against them, and it

disavowed statements in earlier cases suggesting that business processes could be patented so long as they yielded useful, concrete and tangible results.

In urging the Supreme Court to hear the case, which it agreed to do Monday, the petitioners said the appeals court’s decision put tens of thousands of patents at risk. They added that the decision ‘‘threatens to stifle innovation in emerging technologies that drive today’s information-based economy.’’

The appeals court attracted supporting briefs on both sides of the issue from many kinds of businesses, including management consulting, computer software, insurance and tax accounting firms. One brief, from several financial services companies, urged the appeals court to be wary of protecting business processes not tied to devices or tangible changes. ‘‘Business method patents often stifle, rather than promote, innovation,’’ the brief said.

The U.S. government urged the Supreme Court not to hear the case, saying the hedging method at issue was plainly not patentable and that the case did not affect software or more exotic business methods. But courts have relied on the decision of the appeals court since October to deny patent protection to methods of marketing software products, detecting fraud in credit card transactions and creating real estate investment instruments.

A peek into early Apple strategy SAN FRANCISCO BLOOMBERG NEWS

Two of Apple’s earliest business plans were made public Tuesday, offering a glimpse into how Steve Jobs and Steve Wozniak founded the maker of Macintosh computers, the iPhone and iPod media players.

Apple’s first investor, Mike Markkula, donated Apple’s original stock offering document to the Computer History Museum, while the company’s first employee, Dan Kottke, contributed the business plan for the Mac, the museum said in a statement. The documents were also posted on the Web, said Fiona Tang, a spokeswoman for the museum,

located in Mountain View, California.

The ‘‘Preliminary Confidential Offering Memorandum’’ was prepared in 1977, a year after Jobs and Wozniak started Apple Computer in a garage in the Silicon Valley area of California.

Markkula invested $250,000 in Apple for a 33 percent stake and later served stints as president and chairman. The 38-page document details the proposal

by Jobs, Wozniak and Markkula to sell 150,000 shares at an undisclosed price.

The 29-page Mac plan, written in 1981

by Jobs, was an overview of the machine for executives who were concerned that it might cannibalize sales of Apple’s Lisa computer. The Mac, released in 1984, remains Apple’s biggest money maker and now accounts for 44 percent of revenue.

Expanding the horizons of touch screens MOUNTAIN VIEW, CALIFORNIA

BY ASHLEE VANCE

The computer industry has a lot riding on your fingers.

For years, companies have dabbled with the touch-screen technology that lets people poke icons on a display to do things like picking a seat at an airport check-in kiosk. Apple elevated the technology from novelty to must-have feature on mobile devices with its iPhone.

People can flip through pictures with a flick of a finger or make a document larger by pressing two fingers against the screen and stretching them out.

Now, both personal computer manufactures and software makers hope to do more with touch on larger devices by giving people a ten-fingered go at their screens. ‘‘You don’t even operate your TV with two fingers,’’ said Amihai Ben-David, the chief executive officer of N-trig, which produces touch-screen technology for PC makers. ‘‘In order for this to feel really natural, you need more than two fingers for sure.’’

The PC industry hopes the feature stimulates sales. Hewlett-Packard and Dell have been clobbered during the recession as strapped businesses drop computer upgrades to the bottom of their to-do lists. Consumers have shown more interest in new machines, but they are buying inexpensive, tiny laptops rather than decked out Goliaths.

H.P., Dell, Intel and Microsoft expect that when companies and consumers increase their spending, touch will be the flash that nudges them to upgrade.

‘‘In order for this to feel really natural, you need more than two fingers for sure.’’

Computers with the special screens should cost consumers about $100 more than standard machines.

H.P. has been selling a PC with an early single-digit version of touch technology. The $1,150 TouchSmart PC has been popular, H.P. says, particularly in kitchens as a family computer. But outside of science-fiction films, people have met touch computers with lukewarm reactions. Tablet-like computers that ship with plastic pens capable of marking on screens remain a niche in the overall PC market, as do pure touch machines. Mr. Ben-David says that about two million of about 300 million PCs sold last year are touch computers.

H.P. has already been pushing touch technology to large businesses. It sells a custom touch interface for both desktops and laptops. Customers can turn these machines into kiosks for, say, ordering merchandise at a sporting

GIL COHEN MAGEN/REUTERS

A pen and touch device from N-trig. Makers of software and personal computers hope to do more with touch on larger devices by giving people a ten-fingered go at their screens.

event or flipping through a menu while waiting at a restaurant.

The PC industry wants to make touch functions more sophisticated and widespread. On-screen objects could be twisted and turned with several fingers, mimicking the action used in real life.

The next version of Windows from Microsoft, Windows 7, will usher in a new era of touch technology when it appears on PCs later this year, according to Mr. Ben-David.

Backed by Microsoft, Israel-based Ntrig uses a combination of software and sensors to create a special type of computer screen that can interact with pens and peoples’ fingers. N-trig’s technology works by pumping an electrical signal through the screen. When a finger hits the screen, the electricity is discharged. Software interprets that to move graphics on the screen. The company claims that its technology works better on the larger displays of laptops and PCs since it handle many inputs at once.

Working together, Microsoft and Ntrig have created a type of software interface that lets other companies add touch functions to their programs. Such touch software can handle lots of fingers hitting a screen at once rather than just relying on one or two digits with most of today’s touch screens.

N-trig hopes to build more momentum later this year when three more PC makers are set to join H.P. and Dell as backers of the touch technology.

It did not disclose the identities of those companies.

The big question is whether compa-

nies can create software that make touch useful and not a mere curiosity.

SpaceClaim, which makes software for designing objects in 3-D, has taken a business-oriented approach to touch.

Its software, which will work with Windows 7, creates 3-D models that can be turned, pinched and altered via twohanded touches. Frank DeSimone, the head of development, urges other software makers to try something new and slick with the technology rather than just replicating the functions of a mouse. ‘‘A lot of people say they will support touch, but they do a disservice to everyone by not doing anything interesting,’’ he said.

Settlement talks under way Elan Microelectronics, currently embroiled in a patent lawsuit over touchscreen technology with Apple, said Tuesday that it was in preliminary settlement talks with Apple, the maker of the iPhone, Reuters reported from Taipei.

Elan sued Apple in California in April for what it said is infringement of two of its touch screen patents used in the MacBook, iPhone and iPod Touch. ‘‘We’ve not gone into any details, but we are talking,’’ the Elan chairman, I.H. Yeh, said. ‘‘In all lawsuits, there’re no winners or losers. It’s about reaching a compromise that is good for all of us so that we can continue to run our businesses as usual.’’

An Apple spokeswoman, Jill Tan, declined to comment.

....

WEDNESDAY, JUNE 3, 2009 |

THE GLOBAL EDITION OF THE NEW YORK TIMES

companies markets business

Investors show they’re committed Inside the Markets J E RE M Y GAUN T REUTERS

LONDON Forget about the saying, ‘‘Sell in May and go away.’’ Forget about losing steam. Investors are showing very few signs that the global stock market rally is about to end.

World stocks, as measured by MSCI, hit a low on March 9 and had risen as much as 48 percent since then as of Monday. Remarkably, this has not been a particularly volatile affair. The index — which is used by professional investors as their benchmark — has gained in 12 of the past 13 weeks.

It is enough to give any self-respecting bear a headache.

There are nonetheless a few things that need to be looked at to understand exactly what this rally is — what is driving it, what will keep it going and, critically, what kind of commitment investors have to it.

First, it should be remembered that the rally is coming from a very low base, so every gain looks better than it actually is. Between an all-time high in November 2007 and the March low, the MSCI index crashed 60 percent, or 257 points. In points terms, the index has now recovered less than a third of that.

So the post-March gain may well be a correction from an overshoot. That is, the collapse of Lehman Brothers last year, the descent of major economies into recession and genIndicators are eral nerves about everything drove inup, and flow vestors to sell too data show no much. By buying now, sign of the argument goes, retrenchment investors are simply correcting a mistake. after the A case could be rally. made that this is evident from the fact that most of the gains have been in emerging markets, the stock sector most hurt in the collapse last year.

From its high to its low during the crisis, the MSCI emerging market index fell 67 percent. Since hitting a 2009 low in March, the emerging market index has gained 68 percent, compared with 43 percent for the MSCI index that tracks stocks in developed markets.

Conversely, the emphasis on emerging markets underlines the factor that has most been behind the rise in global stocks — a growing belief that the worst of the economic downturn is over and that growth will return in the autumn.

If this is the case, emerging markets will be among the first to recover as a kind of alpha play. That is, those who suffer the most in a downturn gain the most in an upturn.

Some of this is being reflected in commodity markets, which have been booming, albeit, again, from a low point.

The price of oil, for example, has more than doubled since February, which cannot help but raise the outlook for important emerging-market producer countries like Russia, Mexico and Brazil.

Investors, meanwhile, are said to have reached a stage where they are demanding real evidence of economic recovery to keep buying stocks rather than just seeking signs of a slowing down or leveling off of decline. This may be the case — and there is no doubt that unexpectedly poor economic data has the potential to knock stock markets and others hard.

But investors are not acting that way.

They are in one of those moods where they will look for the good in any report and trade accordingly. On Friday, the U.S. Commerce Department reported that the U.S. economy had shrunk 5.7 percent year-on-year in the first quarter, worse than market expectations. But stocks rose anyway, lifted by data showing corporate profits were up, as well as by other reports on Japanese factory output, British house prices and German retail sales.

Even the bankruptcy of the U.S. icon General Motors was taken as eliminating uncertainty rather than flagging the extent of risks ahead for industry.

The final issue is commitment, and here there is very little doubt.

Nearly all investor sentiment indicators are up, and flow data show no sign of institutional investors’ retrenching after their nearly three-month rally.

State Street, which tracks the big money flows through its custodial ledger, has said that risk appetite is robust. Cross-border flows into both developed and emerging markets are among the highest they have been in a decade.

It also notes that investors currently hold the biggest short position in the dollar since August 2007 and that flows are positively correlated with yield, which it says is a clear signal of riskseeking among investors in foreign exchange markets.

Other surveys show similar things.

Reuters asset-allocation polls last week showed equity holdings among leading investors across the world, but mainly in the United States and Britain, remaining steady in May, a time when they were supposed to be easing back from their buying frenzy.

All this means one thing: If the big boys and girls continue to play, the game will go on.

IN THE NEWS - WORLD BUSINESS

RYANAIR HAS FIRST ANNUAL LOSS BUT PREDICTS PROFIT THIS YEAR

Market Roundup RO D RIG O C AMPO S REUTERS

NEW YORK U.S. stocks gave back earli-

PHILIPPE HUGUEN/AGENCE FRANCE-PRESSE

Tires burn Tuesday, set ablaze by workers at a Goodyear Tire & Rubber plant in northern France. More protests are planned over layoffs of 817 employees.

DEMONSTRATING AGAINST CUTS

national Congress Center in Munich for fear they could be used as projectiles, and burly guards were on patrol to ensure order. (REUTERS, AP)

PARIS QUARTERLY PROFIT TUMBLES 55% FOR A FRENCH CONGLOMERATE

PARIS SHARP EXPORT DECLINES FORECAST FOR FRENCH WINE AND CHAMPAGNE

French wine exports will decline at least 20 percent this year as wholesalers become reticent to restock during the recession and consumers drink less in bars and restaurants, industry executives said Tuesday.

Sales are suffering in the United States, Britain and Japan, said Claude de Jouvencel, head of the French Federation of Wine Exporters and chief operating officer of Grand Marnier. He spoke after the signing of an agreement with the French customs office and the Finance Ministry to help winemakers obtain medium-term loans. Champagne makers will also experience a 20 percent decline in sales by volume this year, said Yves Dumont, the nonexecutive chairman of Laurent-Perrier, whose brands include Grand Siècle.

LVMH Moët Hennessy Louis Vuitton, the maker of Dom Pérignon, said in April that champagne sales by volume plunged 35 percent in the first quarter as drinkers chose to economize with less-costly sparkling wines. (BLOOMBERG) LONDON AS REVENUE SLIPS, AD COMPANY WPP REDUCES ITS WORK FORCE 3.7%

Bouygues, a French conglomerate, on Tuesday posted a 55 percent decline in operating profit for the first quarter, below analyst estimates, and cut its 2009 sales forecast to reflect a change in outlook for its TV channel and lower orders for its construction unit.

Bouygues said it had an operating profit of ¤174 million, or $249 million, in the three months ended in March, down from ¤387 million a year earlier.

In addition to its construction business, Bouygues provides cellphone and Internet services, owns part of the French TV channel TF1 also has a 30 percent stake in the industrial group Alstom. (REUTERS) MUNICH HYPO SHAREHOLDERS APPROVE NATIONALIZATION OF COMPANY

A protester outside the Hypo meeting Tuesday.

NCR said Tuesday it was relocating its corporate headquarters from Dayton, Ohio, to Duluth, Georgia, a suburb of Atlanta.

The company, a maker of automated teller machines and retail checkout scanners, said some of the 1,250 workers at its Dayton offices will be offered transfers. NCR said it chose the new location after considering the local work force, infrastructure, financial incentives and government tax structures.

NCR said it would also open a factory in Columbus, Georgia, that will employ an additional 870 people. (AP)

port an additional ¤5.6 billion capital increase.

But investors opposed the move because the government, which controlled 47 percent of Hypo Real Estate, wanted to bar other shareholders from buying additional shares under the planned capital increase. This would clear the way for the state to increase its stake to 90 percent.

A shareholder vote Tuesday approved that step.

Shareholders were prevented from carrying fruit or bottles into the Inter-

World markets

U.S. S&P 500

The Americas Canada Mexico Brazil Argent.

Chile Venez.

Europe Euro zone Britain Germany France Italy Spain Switzerland Sweden Russia Czech Rep. Asia Japan H.K. Australia China S. Korea India Taiwan Singapore Thailand Indonesia

LUKAS BARTH/EPA

Chg 12 –0.74 –0.57 +0.05 +1.10 –5.96 +1.86

mo.% –31.0 –32.7 –31.7 –27.5 –34.4 –30.1

–53.60 +81.65 –555.31 –5.07 –16.34 +409.05

–28.3 –21.2 –25.7 –25.1 +4.1 +25.6

2,534.17 4,477.02 5,144.06 3,378.04 -9,999,401 9,664.80 5,432.22 795.25 1,180.56 927.90

–3.18 –29.17 +1.50 –1.45 closed +33.90 +82.48 –6.32 +13.14 +9.70

–32.9 –26.0 –27.5 –32.6 unch.

–28.9 –27.7 –20.9 –52.0 –44.9

Nikkei 225 9,704.31 Hang Seng 18,389.08 All Ordinaries 3,948.10 Shanghai composite 2,724.30 Kospi 1,412.85 S&P CNX Nifty 4,529.90 Taiex 6,949.08 Straits Times 2,380.07 SET 574.30 ISE 1,998.64

+26.56 –499.51 +60.20 +3.02 –2.25 unch.

–5.02 unch.

–5.68 +0.06

–32.3 –25.0 –31.6 –20.7 –23.7 –7.0 –19.4 –25.5 –31.1 –18.2

S&P/TSX 10,550.46 IPC 25,187.28 Bovespa 53,930.98 Merval 1,651.04 Stock Market select 3,174.82 Stock Market index 43,559.36

Rupert Murdoch, the media baron who controls News Corp., is trying to lure Charles G. Carey, the president and chief executive of DirecTV, to be his top lieutenant, according to a person briefed on the matter.

Mr. Carey previously held several posts at News Corp. Peter A. Chernin, the longtime president of News Corp., is leaving at the end of June.

While Mr. Carey has indicated interest in returning to News Corp., his contract at DirecTV does not expire until the end of 2010, the person said. Representatives for News Corp. and DirecTV declined to comment.

World 100 Company U.S. Abbott Laborat.

Amgen Apple AT&T Bank of America Berkshite Hath.

Bristol-Myers Sq. Chevron Cisco Systems Citigroup Coca-Cola Comcast ConocoPhillips CVS Exxon Mobil General Electric Gilead Sciences Google Hewlett-Packard IBM Intel J&J

Indexes, stock quotes and currency rates. global.nytimes.com/business

NEW CHIEF FOR PLAYBOY EMPIRE

Playboy Enterprises, the adult entertainment empire, picked its new chief executive from the newspaper industry Monday, hiring away the head of the company that publishes the Orange County Register in California.

Scott N. Flanders will be the first permanent chief executive at Playboy to come from outside the Hefner family.

Christie Hefner, daughter of founder Hugh Hefner, resigned in December.

Jerome Kern has been serving as interim chief executive. (AP)

ACER TO FEATURE GOOGLE SYSTEM

Android, the cellphone operating system from Google, will begin running personal computers in the next quarter.

Acer, one of the world’s largest laptop makers, will release a netbook featuring Android in the third quarter, Jim Wong, an executive of the Taiwanese company, said Tuesday.

It will be less expensive than an equivalent Acer netbook running Windows XP, Mr. Wong said. (BLOOMBERG)

Interest rates

2,500

10-year govt.

Britain France Germany Japan United States

Ask yield 3.892% 3.979 3.644 1.505 3.653

Chg +0.068 –0.020 –0.020 +0.020 –0.002

1-year gov’t Britain France Germany Japan United States

Ask yield 0.677% 0.794 0.809 0.190 0.403

Chg –0.008 –0.036 –0.036 unch.

–0.040

Ask yield 0.590% 0.740 0.686 0.180 0.128

Chg –0.003 –0.010 –0.001 +0.002 –0.007

5.122% 3.991 3.888 n.a.

1.865

3-month interbank Can. dollar Libor Dollar Libor Euribor Sterling Libor Yen Libor

Last 0.700% 0.646 1.262 1.271 0.516

Chg unch.

–0.004 –0.004 –0.002 –0.004

3.377% 2.681 4.864 5.867 0.919

Benchmark rates Britain (bank) Canada (overnight) Euro zone (refinancing) Japanese (overnight) United States (prime)

Last 0.50% 0.25 1.00 0.10 3.25

900 880

TAIPEI

Europe Stoxx 50

940 920

LDV, the British van maker, said Tuesday it would reapply for administration, a form of bankruptcy, after a Malaysian company abandoned its rescue bid.

The British government’s business minister, Ian Pearson, said the Malaysian company, Weststar, was unable to proceed with a takeover despite the offer of a bridge loan.

LDV, which employs about 900 workers, has been owned by a Russian company, GAZ Group, since 2006. (AP)

2,400

942.30

‡ Tuesday

Chg

–0.57

2534.17

–3.18

Charts show the past 10 days of active trading, with daily highs and lows.

Agricultural Corn Cotton Soybeans Wheat Rice Cocoa Coffee Sugar Orange juice

CHRONOGRAPH

AUDEMARS PIGUET, LE BRASSUS (VALLÉE DE JOUX), SWITZERLAND TEL. +41 21 845 14 00 www.audemarspiguet.com

4.903% 4.241 4.248 n.a. n.a.

Exchange rates

Dollar in yen 98

1.42 1.40

Major currencies $1

96

1.38 94

1.36

Chg

‡ Tuesday

ROYAL OAK OFFSHORE

Euro in dollars 12 mo. ago 4.962% 4.602 4.442 n.a.

4.062

‡ Tuesday

Chg

1.427

+0.008

‡ Tuesday

95.670

Chg

–0.700

Charts show the past 10 days of active trading, with daily highs and lows.

Cross rates

Futures DJ Stoxx 50 FTSE 100 DAX CAC 40 Milan S&P/MIB IBEX 35 SIX OMX 30 RTS Prague St. Ex.

ONLINE: LATEST MARKET NEWS

RESCUE FAILS FOR U.K. VAN MAKER

NCR MOVING ITS HEADQUARTERS TO ATLANTA SUBURB FROM OHIO

Last 8,720.70 942.30 436.36 1,829.78 6,163.11 523.19

MURDOCH SEEN TRYING TO LURE CHIEF OF DIRECTV TO NEWS CORP.

LONDON

DAY TON, OHIO

Tuesday, June 2

NEW YORK

er gains Tuesday as financial shares came under pressure after several companies announced stock offerings.

Major indexes had been higher in morning action after better-than-anticipated housing data bolstered hopes that the recession was abating.

Declines among financial shares weighed on the broader market, due to fears about the diluting effect of the offerings. JPMorgan Chase, a component of the Dow industrials, was down more than 3 percent; the KBW bank index fell 2 percent.

Several U.S. banks are raising capital to show they are capable of functioning without government support, a move to free themselves from tight regulations after they received billions of dollars from the Treasury Department’s Troubled Asset Relief Program, or TARP. ‘‘There’s been a lot of new issues on financials,’’ said Todd Leone, managing director at Cowen in New York. ‘‘They want to cover the TARP and they have issued a lot of stock in the last few days so I think that is why they are a little bit heavy.’’ ‘‘But we had a great move with the housing numbers this morning,’’ he said. ‘‘We’ve had a nice move and I think

the market is just kind of resting here.’’

JPMorgan Chase shares fell 3.4 percent to $34.89 and ranked among the biggest drags on the Dow industrials, while Morgan Stanley’s stock slid 2.1 percent to $29.45.

The Dow Jones industrial average rose 39.41 points, or 0.45 percent, to 8,780.85 in mid-afternoon trading. The Standard & Poor’s 500 index rose 0.42 percent, or 4 points, to 946.87. The Nasdaq composite index gained 6.71 points, or 0.45 percent, to 1,483.83.

The National Association of Realtors said its pending home sales index for April posted its largest monthly gain since 2001, the latest indication of a turnaround in the housing market, seen as essential for an economic recovery.

Shares of home builders rose.

Britain’s blue-chip share index ended down 0.65 percent, hurt by bank issues after a major shareholder sold its stake in Barclays, although improving U.S. pending home sales lent some support to the market. The FTSE 100 closed 29.17 points lower at 4,477.02, giving up some of the previous session’s 2 percent rise.

The British benchmark is up 1 percent this year and has surged 29.4 percent from a six-year trough hit on March 9.

In Frankfurt, the DAX index ended at 5,144.06, up 1.5 points, or 0.03 percent. In Paris, the CAC 40 index closed at 3,378.04, down 1.45 points, or 0.04 percent.

In Japan, the Nikkei stock average closed up 0.3 percent.

CHICAGO

Investors in the German lender Hypo Real Estate vented their anger at management during an extraordinary shareholders meeting Tuesday as the German government pushed for the nationalization of the business.

Hypo Real Estate, which has been propped up with more than ¤100 billion, or $143 billion, in capital and guarantees, appealed for shareholders to sup-

WPP, a leading advertising company, on Tuesday reported lower revenue for the first four months of 2009 and said it was cutting jobs to safeguard profitability.

Revenue, excluding acquisitions and currency fluctuations, declined 6.7 percent from a year earlier, the company said. Business was worse in April compared with the first quarter, it said.

The company, based in London, cut its staff by 4,300 people, or 3.7 percent, in the first four months. More than half of the people who left did so on a voluntary basis, WPP said. (BLOOMBERG)

United States U.S. Dow Jones indus.

U.S. S&P 500 U.S. S&P 100 U.S. Nasdaq composite U.S. NYSE composite U.S. Russell 2000

WITH

Flurry of bank stock sales weigh down U.S. market

LONDON

Ryanair, the discount airline, on Tuesday posted its first annual loss in 20 years, but while its chief executive predicted a disastrous winter period for air travel, he said the ‘‘bloodbath’’ would damage rivals and benefit his airline.

Michael O’Leary, the airline’s chief, predicted that Ryanair’s passenger numbers would rise significantly in the current year, despite the downturn in air travel. ‘‘Next winter could be terrible,’’ Mr. O’Leary said. ‘‘There will be a bloodbath in the industry, and we want to cause some of that bloodbath.’’

Ryanair, based in Dublin, posted a net annual loss of ¤169.2 million, or $242.1 million, after writing down the value of its stake in Aer Lingus. Although the airline disappointed the market with conservative forecasts, it said it still expected a substantial profit in the current year. (REUTERS)

19

City Chicago N.Y. Chicago Chicago Chicago N.Y. N.Y. N.Y. N.Y.

Metals, energy Aluminum N.Y. Copper N.Y. Gold N.Y. Palladium N.Y. Platinum N.Y. Silver N.Y. Brent crude London Light sw.crude N.Y. Natural gas N.Y.

Units $/bu $/lb. $/bu $/bu $/cwt $/ton $/lb. cts/lb. cts/lb.

Delivery Last Chg July 4.44 +0.01 July 0.59 +0.01 July 12.03 –0.19 July 6.62 –0.12 July 12.42 –0.01 July 2,667.00 +29.00 July 1.42 unch.

July 15.63 –0.15 July 93.30 –0.95

cts/lb. cts/lb. $/tr.oz. $/tr.oz. $/tr.oz. $/tr.oz. $/bbl. $/bbl. $/mln.BTUs

June July Aug. Sep. July July July July July

67.80 +1.50 229.90 –1.60 981.20 –1.30 251.25 +7.65 1,240.00 +19.20 15.77 +0.06 0.68 +0.01 68.27 +0.38 4.15 +0.11

3-month gov’t Britain France Germany Japan United States

Latest chg –0.50 (Mar. 5) –0.25 (Apr. 21) –0.25 (May. 12) –0.20 (Dec. 22) –0.75 (Dec. 16)

5.00% 3.00 4.00 0.50 5.00

$1 Australia 1.220 Brazil 1.938 Britain 0.605 Canada 1.082 China 6.831 Denmark 5.215 Euro zone 0.701 India 46.880 Japan 95.670 Mexico 13.274 Russia 30.566 Singapore 1.438 S. Africa 7.970 S. Korea 1232.50 Sweden 7.497 Switzerland 1.062 Taiwan 32.370 U.S. -

€1 1.741 2.767 0.863 1.545 9.751 7.446 67.114 136.55 18.947 43.641 2.052 11.392 1759.39 10.703 1.516 46.200 1.427

£1 2.017 3.210 1.790 11.295 8.624 1.158 77.744 158.22 21.947 50.547 2.377 13.196 2038.06 12.403 1.756 53.527 1.654

¥100 1.274 2.025 0.632 1.131 7.138 5.450 0.732 49.133 13.900 32.000 1.502 8.300 1287.70 7.836 1.110 33.800 1.045

One One One Swiss Can. ruble franc doll.

0.040 1.148 1.127 0.066 1.824 1.790 0.020 0.569 0.558 0.354 1.019 0.222 6.429 6.308 0.171 4.910 4.818 0.023 0.659 0.647 1.536 44.249 43.295 3.129 90.040 88.370 0.428 12.492 12.258 - 28.770 28.234 0.047 1.353 1.327 0.263 7.511 7.370 40.306 1160.00 1139.61 0.245 7.062 6.929 0.035 - 0.981 1.060 30.463 29.900 0.033 0.942 0.924

Euro 0.701 Dollar Pound 0.605 Swiss franc 1.062 Yen 95.670 Europe Czech koruna 18.745 Danish krona 5.215 Hungarian forint 196.76 Norwegian krone 6.195 Polish zloty 3.142 Russian ruble 30.566 Swedish krona 7.497 Americas Argentine peso 3.743 Brazilian real 1.938 Canadian dollar 1.082 Chilean peso 562.70 Mexican peso 13.274 Venezuelan bolivar 2.145 Asia Australian dollar 1.220 Chinese yuan 6.831 Hong Kong dollar 7.751 Indian rupee 46.880 Indonesian rupiah 10250.0 Malaysian ringgit 3.487 Philippine peso 47.170 Singapore dollar 1.438 South Korean won 1232.50 Taiwan dollar 32.370 Thai baht 34.100 Middle East and Africa Egyptian pound 5.606 Israeli shekel 3.901 Saudi riyal 3.750 South African rand 7.970 Turkish new lira 1.525

Chg.

€1

Chg.

£1

Chg.

–0.004 –0.003 –0.006 –0.700

1.427 0.008 0.863 0.001 1.516 unch.

136.55 –0.170

1.158 –0.002 1.654 0.007 1.756 –0.003 158.22 –0.400

–0.057 –0.029 0.470 0.013 0.011 –0.050 0.103

26.749 7.446 280.78 8.840 4.484 43.641 10.703

0.069 0.003 2.241 0.068 0.041 0.194 0.211

31.004 0.037 8.624 –0.010 325.44 2.151 10.247 0.065 5.197 0.040 50.547 0.141 12.403 0.227

–0.002 –0.003 –0.005 1.100 0.129 unch.

5.341 2.767 1.545 802.97 18.947 3.061

0.027 0.012 0.002 6.062 0.301 0.017

6.191 3.210 1.790 930.71 21.947 3.548

0.023 0.014 unch.

5.751 0.315 0.015

–0.015 1.741 –0.010 2.017 –0.015 0.005 9.751 0.064 11.295 0.057 0.001 11.061 0.063 12.820 0.056 0.100 67.114 0.478 77.744 0.434 20.000 14626.8 110.38 16953.5 104.69 0.017 4.976 0.052 5.767 0.052 0.070 67.312 0.477 78.019 0.445 –0.004 2.052 0.006 2.377 0.004 –0.200 1759.39 10.190 2038.06 8.670 0.005 46.200 0.280 53.527 0.244 0.020 48.661 0.301 56.401 0.272 –0.001 0.020 unch. unch.

0.005

8.000 5.567 5.351 11.392 2.176

0.043 0.060 0.030 0.083 0.019

9.272 6.452 6.202 13.196 2.522

0.038 0.060 0.026 0.075 0.019

The companies with the largest market capitalization, listed alphabetically by region. Prices shown are for regular trading. A + ‡ or − ‡ indicates stocks that reached a new 52-week high or low.

Last 45.16 51.21 139.1 24.64 11.40 91,850 20.24 69.28 19.49 3.51 49.74 14.35 48.06 31.24 72.63 13.70 42.88 426.8 35.79 107.0 16.13 56.04

52-wk price range Chg 12 mo.% Low Last (‡) High +0.18 –19.9 41.52 59.81 +1.11 +16.3 42.38 65.89 –0.3 –26.3 78.2 189.4 unch. –38.3 21.72 40.20 +0.19 –66.5 3.14 38.13 –30 –31.8 72,400 147,000 +0.13 –11.2 17.26 23.88 +0.07 –30.1 56.46 101.20 –0.01 –27.1 13.62 27.54 –0.18 –84.0 1.02 23.00 +0.72 –13.1 37.85 58.63 +0.43 –36.2 11.22 22.72 +0.16 –48.4 35.13 95.78 +0.64 –27.0 23.98 44.12 +0.87 –18.2 62.22 90.70 –0.16 –55.4 6.66 31.06 +0.11 –22.5 37.47 57.10 +0.2 –27.1 257.4 586.3 –0.21 –23.9 25.53 48.51 –1.4 –17.3 71.7 130.0 –0.37 –30.4 12.08 24.52 +0.26 –16.0 46.60 72.22

Company U.S. (cont.)

JPMorgan Chase McDonald’s Merck Microsoft Monsanto Occidental Petrol.

Oracle Pepsico Pfizer Philip Morris P&G Qualcomm Schlumberger United Technol.

UPS US Bancorp Verizon Visa Wal-Mart Walt Disney Wells Fargo

Last 34.74 60.31 27.60 21.38 81.26 69.33 20.20 55.47 14.98 44.56 53.73 43.75 58.27 55.29 53.00 17.98 29.30 66.32 50.28 25.26 24.36

Chg 12 mo.% –1.37 –19.2 +0.46 +1.7 +0.07 –29.2 –0.02 –24.5 –0.22 –36.2 –0.01 –24.6 +0.28 –11.5 +2.34 –18.8 +0.22 –22.6 +0.93 –15.4 +0.37 –18.7 –0.65 –9.9 –0.90 –42.4 +0.02 –22.2 +0.44 –25.4 –0.92 –45.8 +0.05 –23.8 –0.34 –23.2 –0.31 –12.9 +0.23 –24.8 –1.07 –11.6

52-wk price range Low Last (‡) High 15.90 49.85 50.86 65.95 20.99 38.96 15.15 29.07 66.26 142.69 40.72 93.56 13.85 23.52 45.81 73.23 11.66 19.97 32.34 55.95 44.18 73.15 29.21 56.37 35.19 109.86 37.56 71.04 38.30 71.60 8.82 37.99 25.08 38.96 42.42 87.56 46.42 63.17 15.59 34.49 8.12 39.80

Company (Country) The Americas Last America Movil (MX) 25.17 Petrobras (BR) 43.45 Vale (BR) 32.98 Middle East and Africa Saudi Basic Ind. (SA) 72.00 Europe Allianz (DE) 71.40 AstraZeneca (GB) 2,518 AXA (FR) 14.16 Banco Santander (ES) 7.75 BBVA (ES) 8.84 BG Group (GB) 1,156 BHP Billiton (GB) 1,557 BNP Paribas (FR) 47.80 BP (GB) 529.7 Brit. Amer. Tob. (GB) 1,686 Deutsche Tele. (DE) 8.15 E.ON (DE) 25.88 EDF (FR) 36.98 ENI (IT) 17.72 France Telecom (FR) 16.54

Chg 12 mo.% –0.50 –18.2 –0.95 –24.3 –0.81 –39.3

52-wk price range Low Last (‡) High 16.34 30.76 20.21 61.70 20.24 56.15

+0.50 –48.5

34.10

151.75

–0.70 –58 +0.27 –0.05 +0.03 unch. +3 unch. +5.0 –13 –0.10 –0.16 –0.02 closed –1.00

46.64 2,075 5.88 4.00 4.68 664 752 21.38 376.2 1,450 8.06 18.19 27.31 12.30 16.14

121.69 2,928 24.65 13.39 14.48 1,310 2,049 71.34 630.0 1,928 11.87 137.48 70.57 26.42 21.00

–41.3 +14.2 –37.6 –42.1 –38.3 –8.7 –18.7 –27.9 –12.9 –10.7 –24.2 –81.1 –46.9 –32.3 –15.2

Company (Country) Europe (cont.)

Last GDF Suez (FR) 28.21 GlaxoSmithKline (GB) 1,034 HSBC (GB) 534.7 L’Oreal (FR) 56.12 Nestle (CH) 39.48 Nokia (FI) 11.51 Novartis (CH) 42.28 Roche Holding (CH) 142.2 Roy. Bk of Scot. (GB)38.10 Roy. Dutch Shell (GB)1,687 RWE (DE) 60.45 Sanofi-Aventis (FR) 46.02 SAP (DE) 31.24 Siemens (DE) 54.56 StatoilHydro (NO) 135.5 Telefonica (ES) 15.35 Total (FR) 41.88 Unilever (GB) 1,487 Unilever (NL) 17.54 Vodafone (GB) 118.6 Volkswagen (DE) 253.2

Chg 12 mo.% –0.36 –35.6 –6 –7.1 –17.3 –37.3 –0.30 –28.3 +0.78 –92.3 +0.11 –37.9 –0.22 –22.8 –3.4 –20.9 –2.10 –83.8 –1 –21.6 +0.41 –27.2 –0.56 –4.0 +0.45 –12.0 +0.16 –25.2 +3.3 –31.6 +0.05 –16.8 –0.04 –25.3 +17 –11.0 +0.14 –16.5 +0.8 –26.9 +23.5 +43.0

52-wk price range Low Last (‡) High 22.82 44.73 995 1,327 349.0 927.8 46.96 78.47 35.20 521.00 6.91 18.53 39.64 63.65 124.1 195.5 10.30 258.18 1,294 2,188 46.52 84.40 37.92 50.90 23.45 39.93 35.52 79.38 96.4 210.5 12.73 18.46 33.18 56.56 1,230 1,686 13.59 21.14 103.2 165.0 168.6 945.0

Company (Country) Asia Last Bank of China (CN) 3.42 BHP Billiton (AU) 36.70 CCB (HK) 5.08 China Life (CN) 29.20 China Mobile (HK) 77.20 China Shenhua (HK) 27.00 Gazprom (RU) 191.5 ICBC (CN) 4.50 Mitsub. UFJ (JP) 621.0 Nintendo (JP) 26,440 NTT (JP) 3,960 NTT DoCoMo (JP) 140,200 PetroChina (HK) 9.04 Samsung Elec. (KR)556,000 Sinopec Corp (HK) 6.03 Tokyo Elec. Pwr (JP) 2,385 Toyota Motor (JP) 3,850

52-wk price range Chg 12 mo% Low Last (‡) High –0.07 –14.1 1.71 4.00 +0.96 –15.6 21.10 47.49 –0.11 –26.9 2.62 6.98 –0.90 –6.9 16.70 32.30 –3.10 –32.7 53.80 125.10 –0.30 –22.4 8.41 36.35 unch. –46.8 86.6 363.6 unch. –23.5 3.42 5.99 +5.0 –42.4 381.0 1,150.0 –140 –54.6 24,400 62,800 +10 –99.2 3,430 578,000 –700 –16.5 129,800 179,000 –0.35 –19.4 4.25 11.46 741,000 –2000 –25.0 407,500 –0.40 –23.3 3.65 8.38 –15 –7.2 2,235 3,230 +30 –28.3 2,650 5,670

Data are at 1700 U.T.C. Prices are in local currencies. Charts are plotted so that percentage changes are comparable.

Infographics production: Custom Flow Solutions Source: Thomson Reuters

20

....

| WEDNESDAY, JUNE 3, 2009

business

INTERNATIONAL HERALD TRIBUNE WITH

NOKIA’S NEW SMARTPHONE: SMART MOVE IN HARD TIMES? PAGE 15 |

STOCK INDEXES

Better flying amid the slump

BREAKINGVIEWS.COM

–10%

Stakes well done for bank investors

–20

BY JANE L. LEVERE

This may actually be a good time to be a business traveler.

Industry experts and travelers say service has improved in many ways, prices are down and the experience, in general, is often better than it has been in a long while. ‘‘In a sense, it is easier and cheaper to be a business traveler these days,’’ said Henry H. Harteveldt, a travel analyst for Forrester Research. ‘‘There is an approximately 20 percent decline in the number of people traveling for business.

Airlines are putting coach and premium-class service on domestic and international flights on sale. ‘‘It’s easier to snag upgrades. And business travelers are generally able to get rooms at hotels they want at a decent price point.’’

Bjorn Hanson, an associate professor at the Tisch Center for Hospitality, Tourism and Sports Management at New York University, agreed. ‘‘Every guest is being treated like a V.I.P.,’’ Mr. Hanson said, at both midprice and luxury hotels, because fewer people are traveling.

Room assignments are being made in a ‘‘much more thoughtful’’ way, he said, and repeat guests are being offered free nights, airport transfers and free use of fitness equipment or the Internet, among other amenities.

Carla DeLuca, a marketing consultant in San Francisco, for instance, said she had been able to take advantage of declining air fares.

She said she bought a round-trip, three-day advance purchase ticket between San Francisco and New York from JetBlue for less than $300 in early February to see a prospective client. ‘‘I found out three days before that I had an opportunity to go to New York for a meeting,’’ Ms. DeLuca said. ‘‘The flights were so inexpensive, I could justify it.’’

David Grayson, managing director of Auerbach Grayson & Co., a brokerage firm in New York, said that in January he called a hotel in London where he regularly stays and asked if it would reduce his normal room rate. The hotel cut the rate by about $145 and gave him breakfast.

Not surprisingly, Tim Winship, editor at large for SmarterTravel.com, said loyalty programs were being especially generous. This year, most hotel loyalty programs have been offering perquisites like double points for a stay or a free

–30 –40 –50 2008

2009

UNITED STATES S&P 500

52-week

942.30

–32.0%

–0.57

EUROPE DJ Stoxx 50

2,534.17

–3.18

–31.9

+26.56

–32.8

JAPAN Nikkei 225 JODI HILTON FOR THE NEW YORK TIMES

9,704.31

Business travelers like Ted Stimpson are finding easier parking and fewer lines at airports.

CURRENCIES

night after two stays. Although most of these expired April 30, Mr. Winship said he expected the bonuses to be extended or similar ones offered.

In March, American Airlines said its frequent fliers could earn double elite status qualifying miles if they traveled

by June 15, an offer that was quickly matched by its competitors. A promotion like American’s is ‘‘typically an end-of-the-year thing, when people tend to take stock of where they are so they can reach elite status,’’ Mr. Winship said. ‘‘This promotion is unusual in its timing and its widespread adoption.’’

Still, the downturn in travel has its drawbacks as well as benefits for travelers. Ted Stimpson, president of Imagitas, a marketing services company in Waltham, Massachusetts, said that on the plus side, ‘‘airports are a pleasure now; there’s nobody there.’’

And parking is easier. ‘‘There are shorter lines,’’ he said.

But, he added, the fees for checked bags mean that once on the plane, ‘‘there’s a mad rush to get baggage into the space above the seats, and there is never enough.’’

Some travelers said they had experienced more cancellations than before, because of capacity cuts.

Since January, Keith Bronitt, a consultant in Scarsdale, New York, said he had bought a ticket for an Air Canada flight and another for a US Airways flight, both out of La Guardia Airport in New York and departing at midday, that were canceled and combined with later flights.

In the future, he said, he may book flights earlier in the day to try to avoid cancellations. ‘‘Instead of spending more time in the office,’’ he said, ‘‘I’ll be spending it in

the airport or on a plane, or I’ll get to my destination earlier than I need.’’

Chris Kenworthy, a senior vice president at McAfee, the antivirus software company, and a participant in Marriott’s loyalty program, said he used to eat a free breakfast of bacon and eggs regularly at the concierge club in the Santa Clara Marriott in California. ‘‘It helps me keep my costs down,’’ he said. ‘‘But suddenly there’s been no more bacon. It’s a whole new world.’’

And, he said, when he is on extended business trips overseas, he often spends weekends in London but has found that the Marriott concierge clubs there are closed on weekends.

But, in general, the travel experience has improved, travelers said, as airlines and hotels vie for customer loyalty.

Jim Graham, a Singapore-based sales director for Avid Technology in Boston who is a participant in United Airlines’ loyalty program, said that on a third of his flights in the past year, the lead attendant or the pilot has approached him to thank him for his business. ‘‘That used to happen maybe once a year,’’ Mr. Graham said.

Similarly, Robert C. Landis, a vice president for Raymond James Tax Credit Funds in St. Petersburg, Florida, said he was waiting for a late US Airways flight at Charlotte Douglas International Airport in North Carolina in February when a pilot appeared in the gate area to explain the delay. ‘‘I’ve never seen that before,’’ Mr. Landis said. ‘‘I was kind of impressed.’’

+10% 0 –10 –20 –30 2008

2009

EURO

52-week

€1= $1.43

+0.008

–8.2%

+0.008

+9.2

+0.007

–15.9

YEN

¥100= $1.05 POUND

£1= $1.65

COMMODITIES

0% –20 –40 –60

2008

52-week

$68.30 a barrel

+0.43

–46.5%

–1.30

+9.8

+0.02

–27.8

GOLD New York

$981.20 a tr. oz.

ONLINE: THE DEALBOOK BLOG

CORN Chicago

Andrew Ross Sorkin, whose DealBook column normally appears on this page, is away this week.

$4.45 a bushel

dealbook.blogs.nytimes.com

2009

OIL Nymex light sw. crude

Data as of 1700 U.T.C. Source: Reuters Graphs: Custom Flow Solutions

It’s easy to be cynical when investors once dubbed ‘‘strategic’’ sell out for a juicy profit. But while it may not sound like a vote of confidence that Goldman Sachs and an Abu Dhabi fund just dumped some $9 billion worth of stock in Industrial & Commercial Bank of China and Barclays, the share sales suggest that the market for bank shares is becoming almost normal.

Barclays parceled out convertibles and warrants to a vassal of the Abu Dhabi royal family just six months ago.

When the British lender’s investors cried foul, Barclays played up the strategic value of having the Gulf investors on their side. Those assertions now ring somewhat hollow.

Both sellers’ urge to raid the piggy bank is understandable. Goldman’s I.C.B.C. investment was worth more than three times the $2.9 billion the Wall Street bank paid back in 2006. In March, Goldman agreed to retain most of its shares, and since then I.C.B.C.’s shares have risen 43 percent. Selling a fifth of its holding for $1.9 billion means Goldman has already recouped the bulk of its initial investment.

After Barclays shares rose almost 50 percent over six months, it made sense

Chronicle of G.M.’s fall was amply foretold What drove General Motors into bankruptcy protection? It’s tempting to blame the broader financial crisis, which torpedoed the economy, dragged down car sales and shut carmakers out of the capital markets. That overriding factor certainly precipitated the demise of the largest U.S. automaker, but it was not the ultimate cause.

Insolvency has, in fact, been looming over General Motors for several years.

In April 2005, for example, while markets were worrying about rating agencies downgrading the automaker’s debt, G.M.’s onerous unfunded health care and pension liabilities looked to have punched a multibillion-dollar hole in its balance sheet. Even then, some suggested that filing for Chapter 11 bankruptcy protection might be the only solution for G.M. That’s not to say G.M.’s executives sat back and did nothing. In the last four years, they have halved the automaker’s unionized work force in the United States; laid off white-collar employees in droves; renegotiated labor

INTERNATIONAL TRAVELER FEW TRAVEL DELAYS REPORTED UNDER NEW U.S. PASSPORT RULES

Fears of stalled commerce or travel did not materialize at U.S. border crossings Monday as people stayed home or were gently warned on the first day of stricter requirements for Americans returning from Mexico and Canada.

Traffic moved smoothly as those without proper identification passed through with a reminder to get an accepted identification card.

The new rules for land and sea border crossings require U.S. citizens to show a passport, passport card or enhanced driver’s license. The new driver’s license uses a microchip to store personal information.

At the busiest passenger crossing along the U.S.-Canadian border, the Peace Bridge between Buffalo, New York, and Fort Erie, Ontario, customs officers reported a 95 percent compliance rate with the new requirement.

Traffic at San Diego’s busy San Ysidro border crossing already was down about 12 percent from last year, partly because of fears of the flu in Mexico, and the authorities said there were few delays.

The rules were supposed to go into effect in 2008, but they were delayed over concerns about the effect on commerce. (AP)

LONDON

WASHINGTON

ROYAL ESTATE ASKED TO LET TOURISTS HELP PAY THE LARGE REPAIR BILLS

NATIONAL PARKS WILL WAIVE FEES TO HELP TRAVELERS AFFORD VACATION

Buckingham Palace should open its doors to tourists more often and the money raised should be spent on repairing crumbling royal buildings and monuments, a parliamentary spending committee said Tuesday.

The royal estate needs £32 million, or $53 million, in repairs. The estate includes Windsor Castle, the Prince Charles residence Clarence House and the Palace of Holyrood in Edinburgh.

The estate receives less than half of this amount a year in government financing from the Department of Culture, Media and Sport, the House of Commons Public Accounts Committee said.

The repair list includes the burial site of Queen Victoria at Frogmore House, near Windsor Castle, where £3 million of work is urgently needed.

The mausoleum, completed in 1871, has been awaiting restoration for 14 years and is on a special register of historical buildings at risk, but a lack of money means there are no plans for repairs to start.

Buckingham Palace opens to paying visitors for about 60 days in the summer. Admissions raised £7.2 million in the last financial year, indicating the potential for more income. (REUTERS)

The National Park Service will allow a few free entries to encourage Americans to visit national parks like the Grand Canyon, Yosemite and Rocky Mountain National Park.

The fee waivers, one each month in June, July and August, will apply to all 391 national parks across the United States. Interior Secretary Ken Salazar said the free weekends should help American families struggling with the recession afford a memorable vacation.

All 147 Park Service sites that charge for entry will waive these fees June 2021, July 18-19 and Aug. 15-16. Entry fees being waived range from $3 to $25.(AP)

SHARK ATTACK KILLS DIVER IN RED SEA

A shark attacked and killed a French tourist diving in a remote site off the Red Sea coast in Egypt on Tuesday, in the first fatal shark attack in the country since 2004, state media and a French Embassy official said. ‘‘I can confirm that there is one French citizen killed by a shark in the Red Sea south of Marsa Alam,’’ said a French Embassy spokesman, JeanMarie Safa. (REUTERS)

Traveler’s forecast

10-15

High/low temperatures, in degrees Celsius and degrees Fahrenheit, and expected conditions.

C ....................... Clouds F............................. Fog H .......................... Haze I ............................... Ice PC ........... Partly cloudy R ........................... Rain

Sh................... Showers S ............................ Sun Sn........................ Snow SS ......... Snow showers T .......... Thunderstorms W........................ Windy

Wednesday °C °F Abu Dhabi Almaty Athens Bangkok Barcelona Beijing Belgrade Berlin Boston Brussels Buenos Aires Cairo Chicago Frankfurt Geneva Hong Kong Istanbul Jakarta Johannesburg Karachi Kiev Lagos Lisbon London Los Angeles Madrid Manila Mexico City Miami Moscow Mumbai Nairobi New Delhi New York

41/25 20/12 28/16 34/24 24/19 34/18 21/13 16/9 24/15 18/7 13/6 39/23 17/9 20/8 24/11 30/26 30/19 33/25 20/5 36/28 26/11 31/25 23/15 18/10 22/16 31/17 27/26 27/12 30/23 20/15 33/28 27/15 40/34 25/16

106/77 68/54 82/61 93/75 75/66 93/64 70/55 61/48 75/59 64/45 55/43 102/73 63/48 68/46 75/52 86/79 86/66 91/77 68/41 97/82 79/52 88/77 73/59 64/50 72/61 88/63 81/79 81/54 86/73 68/59 91/82 81/59 104/93 77/61

Thursday °C °F S T PC T S PC Sh Sh PC PC PC S PC PC S T S T S S T PC PC PC Sh PC R PC T T T PC S T

41/25 26/13 28/16 34/25 24/19 32/19 19/9 15/7 18/14 12/5 15/9 35/24 18/6 15/6 22/9 30/24 21/18 34/24 20/5 36/28 17/6 31/24 23/14 17/7 22/16 30/16 28/26 27/11 30/24 21/9 32/28 25/13 41/35 21/14

106/77 79/55 82/61 93/77 75/66 90/66 66/48 59/45 64/57 54/41 59/48 95/75 64/43 59/43 72/48 86/75 70/64 93/75 68/41 97/82 63/43 88/75 73/57 63/45 72/61 86/61 82/79 81/52 86/75 70/48 90/82 77/55 106/95 70/57

SHOWERS FLURRIES SNOW RAIN ICE

H L

5-10

10-15

H

5-10

L

15-20

HIGH

15-20

LOW

20-25

RUSSIA

10-15

Meteorology by Pennsylvania State University.

Weather shown as expected at midafternoon on Wednesday.

L

BRITAIN GERMANY

10-15

15-20

20-25

MOSTLY CLOUDY

15-20

POLAND

S PC S T PC PC Sh Sh Sh PC PC PC S PC S R R PC PC S PC T PC PC PC C R PC T Sh T PC S Sh

STATIONARY COMPLEX WARM COLD

5-10

0-5

10-15

10-15

UKRAINE

25-30

20-25 FRANCE

25-30

10-15

15-20

20-25

15-20 25-30

20-25

20-25

ITALY SPAIN

25-30

25-30

15-20

TURKEY

20-25 20-25

25-30

25-30 30-35

20-25

30-35

25-30 25-30

25-30 25-30

30-35 25-30 25-30

30-35 >35

30-35

23/17 25/18 22/11 43/27 25/16 19/11 17/6 27/16 31/19 32/25

73/63 77/64 72/52 109/81 77/61 66/52 63/43 81/61 88/66 90/77

Sh C PC S S C S T PC T

25/17 26/16 19/7 41/27 24/15 18/11 21/7 27/15 32/20 33/25

77/63 79/61 66/45 106/81 75/59 64/52 70/45 81/59 90/68 91/77

PC C S S S PC S S PC T

Stockholm Sydney Taipei Tel Aviv Tokyo Toronto Tunis Vienna Warsaw Washington

SAUDI ARABIA

>35

EGYPT

>35

>35

Nice Osaka Paris Riyadh Rome San Francisco Sao Paulo Seoul Shanghai Singapore

Welcome The Cube EnjoyThe Evolution

CAIRO

13/5 19/12 33/22 30/20 24/19 18/6 29/17 21/11 16/7 30/21

55/41 66/54 91/72 86/68 75/66 64/43 84/63 70/52 61/45 86/70

Sh R R S C PC S PC PC T

9/4 21/12 27/20 29/19 24/19 20/5 32/17 18/10 15/7 21/18

48/39 70/54 81/68 84/66 75/66 68/41 90/63 64/50 59/45 70/64

R C R PC C S S PC C Sh

www.welcomethecube.com

for International Petroleum Investment Co. to reinvest its £1.5 billion of gains into racier things. The British bank’s shares have done well as the risk of nationalization receded. But while Barclays has a growth strategy, it isn’t a conventional growth stock.

The good news is that both blocks of shares looked to have been spread among large groups of investors — and both went for discounts smaller than one might have feared. Goldman dumped its stock just 4.6 percent below the previous day's closing price. The Gulf investors faced a 15 percent cut to the market price, but for a much more substantial 11 percent stake.

It all suggests that a normal market for bank stocks is returning, where large stakes can be sold to buyers other than opportunistic sovereign funds.

This will be most encouraging to those still waiting to offload big chunks of banks. Step forward the British government, saddled with £23 billion of stock in Lloyds Banking Group and Royal Bank of Scotland. The government is apparently open minded about selling in blocks to strategic investors.

But market placings may not be such a bad option after all. JOHN FOLEY

contracts and health care expenses; and sold businesses like Allison Transmission and GMAC, the financial services arm, to raise cash.

But none of that was enough. G.M. was losing market share faster than it could cut its output, even before the precipitous declines of the more recent credit crisis. Other measures were slow to materialize, like a reduction in its dividend.

Still, even for those who have argued strongly in favor of G.M. seeking bankruptcy protection, there’s no pleasure in being proved right. The generous support of American and Canadian taxpayers, whose $60 billion or more in loans are unlikely to be repaid in full — as well as some luck — will help. And G.M.’s expedited restructuring process will allow it to emerge in a position to compete profitably again. If not, bankruptcy will be in the cards.

ANTONY CURRIE AND ROB COX

For more independent commentary and analysis, visit