Nepal’s Maoist fighters on Saturday began the process of leaving the camps they have called home since the end of their insurgency in 2006, to join the regular army or start new lives.

The historic transition follows a breakthrough peace deal signed on November 1 by the Maoists and the three other major political parties which paved the way for life beyond the cantonments for the battle-hardened ex-rebels.

“It’s a critical time in their lives. It’s also challenging and demanding for us,” said Balananda Sharma, a retired lieutenant general who is overseeing the integration of the 19,000 ex-rebels into the army and Nepalese society.

The fighters formed a queue snaking around a hill at the Shaktikhor cantonment in Chitwan, about 220 kilometres (150 miles) southwest of Kathmandu, to ask army monitors in blue jackets about their options for the future.

Under the deal, 6,500 fighters will be integrated into the Nepalese Army while the remainder choose between retirement payoffs of 500,000 to 800,000 rupees ($6,300-$10,200) and a rehabilitation package that includes vocational training.

“I’ve wanted to join the army since my childhood. Seven years ago I attended a few programmes organised by the Maoists and joined them because their policies attracted me,” said former combatant Bikash Shahi, 28.

“I was in two battles after joining the party and saw the deaths of my comrades. I wanted to serve the nation so I have decided to go for integration into the Nepalese Army.”

Sharma said those opting for the payoff would get their cash in two instalments, one year apart, while those who went for the training packages would be counselled by career experts.

“We will offer them alternatives based on their qualifications,” said Sharma, adding that the reintegration process would take more than 10 days and the combatants would remain in the camp until their leaders had worked out the logistics of the retirement and rehabilitation packages.

The rest of the thousands of former fighters will leave the camps over the coming days.

“We will give them enough time to decide their future because, after joining the war, this is the most crucial decision they are going to make in their career,” Sharma added.

“The issue of Maoist fighters is the most important aspect of the peace process and the regrouping is the first major step towards it.”

There are more than 19,000 former fighters confined to seven cantonments across Nepal.

The camps were set up and monitored by the United Nations until January when the UN mission in Nepal handed over the keys of Maoist weapons containers to a cross-party special committee.

The Maoists fought a decade-long war against the state in which at least 16,000 people died.

The former rebels left their jungle redoubts and joined mainstream politics in 2006, going on to win landmark elections two years later and abolishing the country’s 240-year-old monarchy. — AFP

Thailand’s premier declared central Bangkok safe from the kingdom’s devastating floods Saturday, as the death toll passed 600 and President Barack Obama vowed the US will give whatever help it can.

Thailand is suffering its worst flooding in half a century, and 5.4 million people are still affected around the kingdom, but Prime Minister Yingluck Shinawatra said that inner areas of the capital were out of danger.

Yingluck met Obama on the sidelines of the East Asia Summit on the Indonesian island of Bali on Saturday — her first face-to-face meeting with the US leader.

“It’s certain that the inner zone of Bangkok will be safe from floods because the measures to hold floodwaters have been successful,” she said in her weekly radio and television address.

The drainage of floodwaters in the western part of the capital was progressing slowly, she said, but she remained confident that a key road linking the city to the country’s south would not be cut.

“Many feared that Rama II road may be submerged, but it’s unlikely now and if it is inundated it will not be serious,” she said.

Some 602 people have been killed in floods and two are still unaccounted for, the Department of Disaster Prevention and Mitigation said in an update on Saturday.

Many areas in the north and west of the capital are still under water and full or partial evacuation orders are in force in 24 of the city’s 50 districts.

Bangkok governor Sukhumbhand Paribatra joined 1,000 volunteers clearing up a major road junction in the city’s north on Saturday after the waters receded, and he vowed to clean up the whole city by the end of the year.

Obama congratulated Yingluck on her “inspirational” election victory in July and pledged US support in the floods crisis.

“We will extend any assistance we can,” he said. “The US and Thailand are two of the oldest allies, with great friendship. We extend our heartfelt condolences to the victims of the flood.”

Washington has promised more than $10 million to help Thailand recover from the disaster.

The meeting with Obama comes at a delicate time for Yingluck, the sister of the deeply divisive former PM Thaksin Shinawatra, who was ousted in a 2006 coup and lives abroad to avoid a two-year jail sentence for corruption.

Yingluck, 44, who had no experience of politics before her election, has faced criticism for her handling of the flood crisis and over reports that her government had drafted a royal pardon that could allow Thaksin to return.

Obama’s warm words — which went beyond the usual diplomatic niceties — come after US Secretary of State Hillary Clinton’s visit to Bangkok this week, where she said she was reassured of Yingluck’s commitment to democracy in comments also seen as supportive of the government. — AFP

Chinese policymakers have begun to selectively ease macroeconomic policy to support growth, according to Barclays’ analysts.  While full on easing won’t come until 2012, China will face a significant economic slowdown as the export sector feels the impact of a fragile global economy, and residential investment, which makes up 12% of GDP, falls drastically as the People’s Bank of China (PBoC) seeks to control a real estate bubble.

In their attempt to execute a “soft landing,” China’s leaders have engineered a slowdown by tightening policy over the last several quarters.  This was a response to unwanted consequences of prior stimulative policy.

China provides policymakers a clear example of the possible unwanted side effects of unorthodox monetary policy, which Fed Chairman Ben Bernanke has referenced in several speeches.  Barclays’ analysts explain that “extraordinary policies designed to stimulate growth during the past years have generated some unintended consequences, such as an asset bubble, overcapacity and imbalances.”

Those imbalances have been targeted in the recent tightening cycle.  For example, PBoC appears set on forcing property prices to fall by about 20% in 2012.  They have also pushed to lower shadow banking credit and non-bank lending. This has led to a slowdown in China’s economy, with GDP slowing steadily to 9.1% in the third quarter and inflation, as measured by CPI, falling to 5.5% in October.

Another consequence, of major importance, is the consistent fall in total social financing (TSF, a measure of total credit expended beyond just banking credit), which fell from RMB 4.2 trillion ($661 billion) in the first quarter of 2011 to RMB 2 trillion ($315 billion) in the third.

A look at Chinese stocks illustrates the case.  Big names like Dang Dang and Youku reported important third quarter losses recently, while Baidu’s stock has struggled to move anywhere in the last six months.  The iShares China ETF is down about 18% so far this year

Most, if not all, of China’s slowdown was government engineered, Barclays suggests, but policymakers are beginning to reverse the cycle.  The global economic slowdown will impact China’s exports, which make up a big part of GDP.  According to Barclays, a recession in the U.S. where output falls by 1% and in the Eurozone where GDP contracts by 3.5% would shave off 4 percentage points from Chinese GDP growth.

Even more worrying for the People’s Bank, a 10% to 30% fall in real estate prices would subtract 0.5% to 1.5% from GDP growth.  Barclays’ analysts explain:

The impact of such price changes would be most directly shown in fixed asset investment (FAI). Residential investment is about 25% of total FAI, while gross capital formation is about half of GDP. This implies that residential investment is about 12% of GDP. Residential FAI is currently growing 31% y/y, faster than the close to 25% pace for overall FAI. Consensus expects residential investment to decelerate sharply next year, given falls in both prices and volumes of property transactions. Based on historical experience, a 10-30% price decline could easily lead to slower residential investment, which would subtract 0.5-1.5pp from GDP growth.

In 2012, Barclays estimates that CPI will fall to 4% and GDP to 8.4%, with the economy cooling significantly in the second half of the year.  That will be the time when policy bias swings fully into the easing camp, and policymakers will probably go all out.  This means cutting reserve requirement ratios, asset purchases (much like QE), lowering bank deposit and lending rates, and adjusting the exchange rate policy to favor exports.

China, unlike the U.S. and most of the so-called developed economies, has a lot of firepower left.  But using it could fuel further asset bubbles and other such unwanted consequences.  China’s policymakers face a compelling task, they must avoid a “hard landing” or they could jeopardize the global economy, as much of the world today depends on Chinese demand, particularly for raw materials, to keep going. — Forbes

Chinese police said Thursday they had seized two-billion-yuan ($315-million) worth of counterfeit drugs and packaging in nationwide raids on fake medicine, the second such bust in recent weeks.

Police arrested 1,770 suspects and broke up more than 1,400 dens that made or sold fake medicine during the operation, which involved 16,000 police officers, the Ministry of Public Security said in a statement.

The suspects were found to have used banned chemicals as ingredients for the counterfeit drugs, re-packaged expired pharmaceuticals and forged qualification documents, according to the official Xinhua news agency.

They had copied prescription tablets and injections from more than 100 domestic and overseas pharmaceutical firms, it added.

Most of the fake drugs were sold online or to illegal pharmacies or clinics, it said. The report did not mention whether anyone had died or fallen ill after taking the counterfeit medicine.

This is the latest such police action. On November 4, China announced it had busted a gang that produced and sold fake medicine — some made of animal feed — arresting 114 suspects and seizing more than 65 million counterfeit tablets.

It is also the latest in a string of food and drug safety scandals to hit the nation.

In 2007, Zheng Xiaoyu, former head of the State Food and Drug Administration, was executed for accepting $850,000 in bribes in exchange for granting approval for hundreds of medicines, some of which were later found to be dangerous.

The case triggered governmental pledges to improve supervision of the country’s food and drug industries, but incidents have nevertheless erupted since then.

One of the biggest scandals emerged in 2008 when huge amounts of the industrial chemical melamine were found to have been illegally added to dairy products, killing at least six babies and sickening another 300,000. — AFP

BEIJING (AP) — China said Friday that the safe return of an unmanned spacecraft that docked twice with an orbiting module was a major step in preparation for the launch of its own space station.

The Shenzhou 8 craft landed by parachute in China’s western desert late Thursday after more than two weeks in space. It docked twice with the Tiangong 1 module, which remains in orbit, during a mission proving China capable of successfully docking by remote control. Early U.S. astronauts did so manually.

“It represents a major breakthrough for our country’s space rendezvous and docking technology program,” said Wang Zhaoyao, deputy director of the China Manned Space Engineering Office.

China will conduct two more space docking missions next year, one of them manned, and plans to complete a manned space station around 2020. At about 60 tons, the Chinese station will be considerably smaller than the 16-nation International Space Station.

China has made steady progress toward a space station since a 2003 launch that made it only the third nation to put a man in space. Two more manned missions have followed, and China separately seeks to launch a lunar rover next year.

China started a space station program after being rebuffed in its attempts to join the ISS, largely on objections from the United States. The U.S. is wary of the Chinese program’s military links and the sharing of technology with its chief economic and political rival.

However, China has refused to rule out future cooperation with the U.S. or European space programs and says its craft could dock with the ISS and U.S. spacecraft with only minor adjustments.

Wang said the Shenzhou 8 landing also meant the recovery of 17 biological experiments carried out with Germany in the docking vehicle — the first instance of international cooperation since the beginning of China’s manned space program. — AP

A Taiwanese official will soon be deported after pleading guilty Friday to mistreating two housekeepers brought from the Philippines to work in her Missouri home, US prosecutors said.

Liu Hsien-hsien, director of the Taipei Economic and Cultural Office in Kansas City, Missouri, was arrested last week for allegedly treating her Filipino housekeepers like slaves.

Liu — who appeared in court in shackles and prison garb — had faced up to five years in jail if convicted of the single charge of fraud in foreign labor contracting.

“Under the terms of today’s binding plea agreement, the government and Liu jointly recommend a sentence of time served, which will trigger Liu’s immediate deportation from the United States upon being sentenced,” prosecutors said in a statement.

“Liu remains in federal custody until her sentencing hearing.”

The two housekeepers were certified as “victims of a severe form of human trafficking” and will receive government support for a visa which would allow them to legally remain and work in the United States, prosecutors said.

Liu, 64, admitted that she “fraudulently entered into employment contracts with two Filipino housekeepers” and admitted that she paid them “significantly less than the contractual amount and forced them to work excessive hours,” prosecutors said.

As part of the plea deal, Liu paid the women $80,044 in restitution for the hours that they worked without pay.

A date has not yet been set for Liu’s sentencing, but her lawyer told AFP that he was assured by federal probation officials that they would prepare the necessary pre-sentencing report quickly.

Though such reports can sometimes take three months to prepare, defense attorney James Wirken said he hopes this one will be ready in a couple of weeks.

Liu is permitted to withdraw her guilty plea if the judge does not agree that time served is an appropriate sentence. In that case, she would then prepare for trial or some other resolution.

The case came to light after the second housekeeper sought help from a Filipino man she met at the grocery store.

She told him that Liu had taken away her passport, told her she was not allowed to leave the house without permission, made her work 16 to 18 hour days at a quarter of the agreed wages, monitored her with video surveillance cameras and restricted when she could sleep.

Liu also allegedly told the woman that if she “acted out, she would be deported” because Liu was “friends with local law enforcement and known well in the community,” charging papers said.

The previous housekeeper “went into a state of depression and stopped eating” as a result of the physical and verbal abuse, prosecutors said, citing testimony by an unnamed witness who works as a director at the Kansas City office.

The Taipei mission, which has several offices around the United States, serves as a de facto embassy.

Washington switched diplomatic recognition from Taipei to Beijing in 1979 but has remained a key ally and a leading arms supplier to the island. Beijing considers Taiwan a breakaway province. — AFP

Pakistani bowlers held their nerves to stop a threatening Sri Lankan team to win the third day-night international by 21 runs here on Friday to take a 2-1 lead in the five-match series.

Umar Gul (3-48) bowled well in the final overs to make sure good work by spinners Saeed Ajmal (3-42) and Shahid Afridi (2-42) do not go waste as they dismissed Sri Lanka for 236 in the penultimate over at Dubai stadium.

Captain Tillakaratne Dilshan topscored with 64 but it was Angelo Mathews whose aggressive 40-ball 32 kept Sri Lanka in the hunt before Gul took the last two wickets in a thrilling finish.

Sri Lanka were in a tight corner at 186-6 in the 41st over before Mathews and Jeevan Mendis (19) added 32 for the seventh wicket in quick time to threaten Pakistan, who in the end carried the day.

Pakistan won the first match by eight wickets last Friday while Sri Lanka levelled the series with a 25-run win in the second match on Monday — both played in Dubai.

The remaining matches will be played in Sharjah (November 20) and Abu Dhabi (November 23). Both teams also play a Twenty20 international in Abu Dhabi on November 25.

Sri Lanka were set on course for a win by Dilshan who added 106 runs for the second wicket with Kumar Sangakkara (45) after they lost opener Upul Tharanga (four) in paceman Umar Gul’s first over.

Sangakkara, who survived a run out with the total at 89-1, finally failed to beat a direct throw from Shahid Afridi from mid-on after he set off for a quick single.

He hit three boundaries during his 66-ball knock.

Pakistani spinners Afridi and Ajmal then put the brakes on Sri Lankan innings, as Dilshan dragged a leg-break from Afridi onto his stumps after hitting eight boundaries in his 78-ball knock.

Jayawrdene completed his 10,000 runs during his brief knock of 17, becoming the ninth batsman and second Sri Lankan to achieve the landmark.

Pakistan captain Misbah-ul Haq said Sangakkara’s run out turned the match.

“We bowled well in the final overs but the turning point was Sangakkara’s run out because before that point they were well and truly on course for a victory,” said Misbah.

Dilshan agreed with his counterpart.

“The turning point was Sangakkara’s run out and I got out to a bad delivery,” said Dilshan. “Had one of us batted for four more overs we would have clinched the game.”

Earlier, openers Mohammad Hafeez and Imran Farhat hit attractive half-centuries to help Pakistan post a challenging total.

Hafeez made a 101-ball 83 and Farhat notched an 82-ball 70 to give Pakistan, who won the toss and batted, a solid 151-run start before Sri Lanka grabbed four quick wickets in the space of 26 runs.

Hafeez, who took 26 balls for his first ten runs, hit paceman Dilhara Fernando for four boundaries in the 18th over to step up the tempo before he was finally bowled by spinner Seekkuge Prasanna in the 30th over.

Hafeez hit nine boundaries and a six during his 11th one-day half century.

Ten runs later Farhat followed, caught at long-on off Tillakaratne Dilshan. He hit six boundaries and a six.

Pakistan’s decision to promote Abdul Razzaq backfired as the allrounder hit Prasanna straight into the hands of long-on after scoring just six off 16 balls.

Pakistan was forced to take the batting power-play in the 36th over and managed just 22 runs losing Umar Akmal and Misbah (seven each) but Younis Khan hit a fighting 52-ball 42 to ensure Pakistan cross the 250-mark.

Prasanna and Malinga finished with two wickets apiece. — AFP

Philippine police arrested ex-president Gloria Arroyo at her hospital bed on Friday on charges of conspiring with a feared warlord to rig an election, an offence that could lead to life in jail.

The events capped a tumultuous week in Philippine politics that had seen the government block Arroyo, 64, from leaving the country after she arrived at Manila airport wearing a neck brace and saying she needed medical care abroad.

The decision by the Commission on Elections to charge her Friday with rigging the 2007 senatorial elections also marked the high-point in President Benigno Aquino’s campaign to hold his predecessor to account for alleged graft.

“Mrs Arroyo is compelled to stay in the country and face the charges of electoral sabotage,” Justice Secretary Leila de Lima told reporters after a Manila court issued an arrest warrant against the ex-president.

“(This case) has great implications not just to the integrity of our electoral system, but also to the very principles of democracy.

“It is our desire… that the Filipino people are finally given the justice they duly deserve.”

Police then served the arrest warrant on Arroyo on Friday night at a Manila hospital where her aides said she was being treated for a rare bone disease that had led to three unsuccessful spine operations this year.

However Senior Superintendent James Bucayo, who served the arrest warrant, told reporters at the hospital that she would remain there until she was well enough to leave.

“We just put police guards outside her room,” he said.

Arroyo, the country’s second female president who is now a congresswoman, had been accused of many corrupt acts, such as bribery, and efforts to rig elections during her time in power from 2001 until the middle of last year.

She defeated repeated parliamentary impeachment attempts and coup attempts over the allegations while she was president.

Aquino vowed after winning landslide elections last year that one of his top priorities during his term would be to bring Arroyo to justice.

The election commission said Friday that Arroyo had ordered the wide-scale tampering of ballots in the 2007 senatorial elections.

It said the ballots that had been switched were in the southern province of Maguindanao, which was then ruled by the Ampatuan family.

The Ampatuans were close allies of Arroyo and had a reputation as warlords who enforced their rule of the province for a decade with a brutal private army.

Arroyo was eventually forced to sever ties with the Ampatuans after the family was accused of orchestrating the massacre of 57 people in 2009 to eliminate a rival’s political challenge.

The patriarch of the family, Andal Ampatuan Snr, who is on trial for those murders, was also charged on Friday as one of three other people who allegedly conspired with Arroyo to rig the 2007 election.

Arroyo’s lawyer, Raul Lambino, denounced the charges against his client as an injustice and a desperate effort to prevent her from leaving the country.

“They are violating the basic rule of due process. It is clear this (decision) was railroaded (forced through) from the start,” he said.

Arroyo had arrived at Manila airport on Tuesday night in a wheelchair and looking frail, seeking to fly to Singapore, hours after the Supreme Court overturned a government travel ban on her.

The Supreme Court ruled that she should be allowed to travel because she had not yet been charged with any crimes, rejecting government concerns that she was using her health condition as a ruse to flee into exile.

In a high-stakes political standoff, the government defied the Supreme Court and ordered immigration authorities to stop her from leaving the country, while racing to file charges against her.

The Philippines has consistently been ranked by anti-graft watchdogs as one of the most corrupt countries in the world, and its leaders from national to provincial level are regularly accused of abuses of power.

Arroyo, who was then vice-president, took over in 2001, after her predecessor, Joseph Estrada, was forced to stand down on corruption charges. — AFP