Obama sets course for exit from Afghanistan

  President Barack Obama announced a plan on Wednesday to start withdrawing US troops from Afghanistan in a first step toward ending the long, costly war and returning America's focus toward it's own troubled economy.

Obama said he would pull 10,000 troops from Afghanistan by year's end, followed by about 23,000 more by the end of next summer and a steady withdrawal of remaining troops after that.

In a 15-minute televised address, Obama vowed that the United States -- struggling to restore its global image, repair its faltering economy and bring down the high jobless rate at home -- would end a decade of military adventures prompted by the September 11 attacks in 2001 and exercise new restraint with American military power.

"Tonight, we take comfort in knowing that the tide of war is receding," Obama said, heralding the gradual drawdown of US forces in Iraq and the limited US involvement in the ongoing international campaign in Libya.

"America, it is time to focus on nation building at home."

Yet news that Obama will pull the entire 'surge' force he sent to Afghanistan in 2010 is certain to fuel friction between Obama and his military advisors who have warned about the perils of a hasty drawdown.

Nearly 10 years after the Taliban government was toppled, US and NATO forces have been unable to deal a decisive blow to the resurgent Islamist group. The Afghan government remains weak and notoriously corrupt, and billions of dollars in foreign aid efforts have yielded meager results.

Obama's decision on trimming the US force was a more aggressive approach than many expected. It went beyond the options offered by General David Petraeus, the outgoing commander of US and NATO troops in Afghanistan, whom Obama has picked to lead the CIA.

The president's decision reflected the competing pressures he faces as he seeks to curb spending and halt US casualties without allowing the threat of extremist attacks to fester.

Outgoing Defense Secretary Robert Gates said he supported Obama's decision. But the plan is unlikely to sit well with the Pentagon's top brass who worry insurgents could regain lost territory as fighting intensifies along Afghanistan's eastern border with Pakistan.

"We've undercut a strategy that was working. I think the 10,000 troops leaving this year is going to make this fighting season more difficult. Having all the surge forces leave by next summer is going to compromise next summer's fighting season," said Senator Lindsey Graham, a Republican member of the Senate Armed Services Committee.

Even after the withdrawal of the 33,00 US troops, about 70,000 will remain in Afghanistan, about twice the number there when Obama took office.

Reaction from the US Congress was mixed, as lawmakers impatient with a war that now costs more than $110 billion a year complained Obama should have embraced a larger drawdown.

Unease in Washington over the war has escalated with worries about massive budget deficits, spiraling national debt and unemployment running at more than 9 percent. These are Americans' chief concerns and the issues likely to drive voters in next year's presidential election.

Obama clearly has been mindful of the US public's lack of support for the war as he eyes his re-election campaign.

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African leaders launch talks on biggest free-trade bloc

South African president Jacob Zuma, centre, King Mswati lll of the Kingdom of Swaziland, left, and Namibia’s president Hifikepunye Pohamba sit together at the opening of the tripartite SADC summit in Johannesburg. 

African leaders Sunday agreed to a framework to guide the next phase of negotiations on creating the continent’s biggest free-trade bloc, in a communiqué issued after a day of talks.

The new bloc would integrate the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community, an idea first backed in 2008.
It would combine 26 countries home to 700 million people with a combined economy estimated at $875 billion.

The bloc aims to enhance connectivity among the nations and reduce costs of doing business, while increasing investment flows to address capacity constraints.

‘It is now well documented that regional integration is one of the four factors that have sustained Africa’s growth in the last decade, as well as the quick and robust recovery from the recent financial crisis,’ said Eratus Mwencha, the deputy chairman of the AU Commission.

‘We all know that trade can act as an engine of growth,’ said Mwencha. ‘For the people of Africa, this will mean a paycheque in their pocket.’

The International Monetary Fund expects Africa to grow faster than the global average in the coming years. Six of the world’s 10 fastest-growing economies were on the continent last year.

Mwencha added that it was projected that Africa would double its GDP in the next ten years, a growth expected to be propelled by the growing middle class.

The mega-bloc would bring together the continent’s most developed economies of South Africa and Egypt and some of its most energetic, such as Angola and Ethiopia.

It is expected to end the challenges presented by the current trade blocs which have different rules, with some countries belonging to more than one grouping, complicating efforts to streamline trade.

‘This Tripartite is blazing a path to be followed by other regions in Africa in realising the dream of a united Africa,’ said Sindiso Ngwenya, general secretary of the Common Market for Eastern and Southern Africa.
‘There are a number of areas where, by building on the work already done by member and partner states, working regionally, we can expect quick wins,’ he said.


But the pact faces immense hurdles: tariff barriers, poor infrastructure, weak supply chains, and economies often largely reliant on natural resources rather than manufactured products.


The three existing free trade areas — of which the five-member East African Community is the most advanced — have failed to meet intra-trade targets despite removing the bulk of trade tariffs.
And the bloc includes countries hit by conflicts, coups and political turmoil, such as Libya, Madagascar, Sudan and Zimbabwe.


New World Bank research says trade within southern African accounts for just 10 per cent of the total in the region — compared to 60 per cent in Europe and 40 per cent in North America.


Southern African Development Community exports increased from 20 to more than 30 per cent of combined GDP over the past decade, but regional trade made up a mere three per cent of the increase.

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Australian Stock Market Report

 the us employment trends index fell from a downwardly-revised reading of 100.1 in April (previously 100.5) to 99.7 in May.

The broader measure of European shares fell for a fourth straight day on Monday on continued concerns about the health of the global economy. There was also an element of caution ahead of the European Central Bank meeting on Thursday. But mining shares rose with BHP Billiton up 0.9pct in London trade and Rio Tinto up 1.0pct. The FTSEurofirst index fell by 0.6pct but while the German Dax was down by 0.3pct, the UK FTSE gained 0.1pct.



US sharemarkets fell again on Monday. Investors continue to fret about the softening economy. And airline stocks fell after global industry body, IATA, halved its profit expectations for 2011. Shares in Delta Airlines lost 3pct. The Dow Jones fell by 61pts or 0.5pct with the S&P 500 down by 1.1pct and the Nasdaq lost 30pts or 1.1pct.

US treasury prices ended little-changed on Monday. There was no major economic data to provide guidance and traders were not keen to take positions ahead of auctions later in the week. Treasury will sell $32 billion of 3-year notes on Tuesday, $21 billion of 10-year notes on Wednesday and $13 billion of 30-year notes on Thursday. US 2yr yields were flat at 0.429pct and US 10yr yields rose 1pt to 3.00pct.

The US dollar clawed back some of its recent losses against major currencies in European and US trade on Monday. The Euro eased from highs near US$1.4655 to US$1.4560, before ending US trade near US$1.4670. The Aussie dollar eased from highs near US107.65c to near US106.90c before ending US trade near US107.05c. And the Japanese yen held between 79.95 yen per US dollar and JPY80.35, ending US trade near JPY80.15.

Crude oil prices fell on Monday in choppy trade on expectations that OPEC oil ministers will raise production quotas at their meeting on Wednesday. On-going instability in the Middle East and North Africa limited losses. The Nymex crude oil contract fell by US$1.21 or 1.2pct to US$99.01 a barrel after trading from US$98.64 to US$100.68 a barrel. And London Brent crude fell by US$1.36 to US$114.48 a barrel.

Base metal prices were mixed on the London Metal Exchange on Monday. The tin price fell 1.5pct and nickel lost 0.8pct but other metals rose 0.4-0.9pct except lead which gained 2.7pct. And the gold price also edged closer to record highs on Monday with Comex gold futures up by US$4.80 an ounce to US$1,547.20.

Ahead: In Australia, the Reserve Bank Board meets to decide interest rate settings. In the US, the Federal Reserve chief Ben Bernanke is expected to deliver a speech. Data on consumer credit and weekly chain store sales are also due.

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