Sink or swim in modern China

Chris Hogg heads to the small Chinese village of Zhushanxia, 200km from Shanghai, to see how lives have been shaped by the economy under communist rule, the recession and the country’s economic recovery.

China’s economic roller-coaster has divided communities and villages into those who have sunk financially, and those who managed to swim

Huang Jiao Ling lives at the end of a long dusty road.

Mobile phone numbers are daubed all over the walls of her home and those of her neighbours.

It is like a strange kind of mathematical graffiti, but the numbers are, in fact, advertisements for people offering goods and services.

In modern China, it seems everyone has something to sell.

Huang Jiao Ling, too, is an entrepreneur. She is in her 50s, but she looks younger.

In her front garden, where others might have planted vegetables, she has built a small workshop.

Inside, the walls are unfinished and the floor uneven, but there is just about enough room for a work-bench and a handful of basic machine tools.

Churning out widgets

On the floor are cardboard boxes filled with piles of tiny metal widgets.

They are simple to make – her husband sits at the bench turning them out rapidly by hand.

Many Chinese run their own small businesses in order to get ahead

A few feet away, his bicycle-taxi is parked just inside the front door of the house.

The machine work is a lot less tiring than pedalling passengers around, but he still keeps the bike.

It is useful, he says, to supplement their income in leaner times.

The Huangs sell the boxes of widgets to the factory where Huang Jiao Ling has a full-time job.

For a while this year they had to shut the workshop as demand dropped, but now the machines are humming again.

They have two children, because if you live in the country and your first child is a girl, you are allowed to have another one.

The girls go to very good schools, the best Huang Jiao Ling can afford.

She spends more than half her income on school fees.

“We have to think of their future,” she tells me.

“It’s a Chinese tradition. Parents always think of their children, and when the parents get old, their children will look after them. It’s the same for every generation.”

Yu Feng Guo is Huang Jiao Ling’s brother-in-law.

She is doing well for herself in China’s new modern market economy, but he has been left behind.

He used to work in a state-owned brick factory.

Different lifestyles

When the economic reforms began 30 years ago he watched as some of his co-workers left their jobs to start up their own small businesses, many of them selling prawns or fish by the side of the road.

He decided to do what he thought was the right thing, what the communist party would expect of a loyal worker in a state-owned enterprise – he stayed.

Eventually, the brick factory went bust and he was out of a job.

Agriculture provides an income for many rural Chinese

Now, dressed in a shabby khaki jacket, he works as a security guard in an open-air food market.

Those early entrepreneurs who had left his factory to try their luck in the fledgling market economy are now much richer than him and to his family this seems unfair.

“Thirty years ago everyone in the village was poor,” his son tells me.

“Now the difference in lifestyle between the rich and the poor in our village is huge.”

There is an implicit bargain in modern Chinese society between the leaders and the led.

Beijing tells its people “we will give you opportunities” – to earn more, to enjoy a better standard of living than your parents did.

But you, in return, will behave yourself.

Back on track

In Zhushanxia village quite a few cars can be seen bumping along past the fields, something you would not have seen 30 years ago.

If you have got used to having more, whether it’s a car, or a bigger house, or a more expensive school for your child, you have more to lose when times get tough.

That is why it is so important for the government to get the economy back on track.

When it first faltered, when factories started laying off workers, there was a risk that they would start to feel the government was no longer keeping to its side of the deal, so why should they?

So in Beijing, of course, there will be relief that a recovery appears to be under way.

But the next challenge for the government will be to do more to try to ensure that everyone shares the benefits.

Huang Jiao Ling is happy her workshop is busy again, but still nervous about the future.

So she, like most other Chinese, is saving as much of her income as she can.

Her brother-in-law Yu Feng Guo, has no idea how he will be able to save enough to secure a state pension on his meagre wages from his unstable job.

He and others like him will be looking to their leaders for reassurance that they will be cared for as they approach old age.

But that will costly and complicated. Fixing the economy may prove to have been the easy part.

US recession ‘may last into 2010’

US Federal Reserve chief Ben Bernanke has warned Congress that without the right policies from the government, the US recession could last into 2010.

But he said if the Obama administration and the central bank can restore some measure of financial stability, 2010 could be a year of recovery.

Mr Bernanke made the comments to the Senate Banking Committee.

He also warned that the global nature of the downturn was a threat because exports would be hit.

In its attempts to revive the economy, the Federal Reserve has cut its key interest rate to nearly zero, while the Obama administration has recently signed a $787bn (£546bn) economic stimulus package.

Mr Bernanke said that the potential economic turnaround would hinge on the success of such measures in getting credit and financial markets to operate more normally again.

“Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” he said.

Vicious circle

Mr Bernanke reassured legislators that he was, “committed to using all available tools to stimulate economic activity and to improve financial market functioning”.

But he also outlined long-run predictions for the economy, which he said reflected “the view of policymakers that a full recovery of the economy from the current recession is likely to take more than two or three years”.

He described a vicious circle of rising unemployment and shrinking house prices and savings forcing consumers to cut back, which would in turn increase unemployment.

“To break that adverse feedback loop, it is essential that we continue to complement fiscal stimulus with strong government action to stabilise financial institutions and financial markets,” he said.

Speaking of the concern about bankers benefiting from bail-outs, he added that the country “ought not abstain from saving the financial system just because it rewards people who erred”.

Sliding confidence

Mr Bernanke’s testimony came shortly after data showed that consumer confidence in February had fallen to the lowest level since the Conference Board began reporting the figures in 1967.

Its sentiment index fell to a much worse-than-expected 25.0 in February from January’s figure of 37.4.

“We just got the worst consumer confidence number ever on record,” said Matt Esteve, a foreign exchange trader at Tempus Consulting in Washington.

“Following yesterday’s awful sell-off in the stock market, it just highlights the risk that there is right now.”

House prices

There were also figures showing that the decline in US house prices had accelerated.

The S&P Case Shiller house price index showed the price of a single-family home had fallen 18.5% in December, compared with the same month of 2007.

It was the biggest drop since the index began being calculated 21 years ago.

“There are very few, if any, pockets of turnaround that one can see in the data,” said David Blitzer, chairman of S&P’s index committee.

“Most of the nation appears to remain on a downward path.”

China aims to silence reform call

China’s economy has liberalised, but its political system has not

Chinese lawyers, dissidents and academics who signed a document calling for political reform are being harassed by the authorities.

Signatories to the Charter 08 document have been detained, questioned by the police and put under pressure at work.

The charter calls for a radical overhaul of China’s political system by introducing elections, a new constitution and an independent judiciary.

Despite 30 years of economic reforms, China’s political system has hardly changed in that time.

And the authorities’ reaction to this latest call for reform suggests the country’s leaders still have no appetite for political reforms.

House arrest

Charter 08 was published last month on the 60th anniversary of the promulgation of the Universal Declaration of Human Rights.

December also marked three decades since China began reforms that have transformed the economy and the country’s fortunes.

But even before the document was published, the police started visiting some of the 300 or so original signatories.

Writer and dissident Liu Xiaobo is believed to be under a form of house arrest at an undisclosed location in Beijing.

CHARTER 08 New constitution Legislative democracy Judicial independence Freedom to assemble

The authorities have yet to state publicly why the 53-year-old has been detained.

He is believed to be the only signatory being held by the police, but others have experienced other kinds of harassment.

Police went to journalist Li Datong’s work unit to look for him. He was not there, but now he knows the authorities are watching him.

Shanghai lawyer Zheng Enchong has been taken in for questioning four times since the document was published.

Speaking out

Li Boguang, another lawyer, was invited to meet with a Chinese security official at a Beijing coffee shop, where for more than an hour he had to explain why he had added his name to the charter.

“The official didn’t say anything. He just listened to my reason and then left. This is how they operate,” he said.

I am willing to pay any price for this Xu Youyu, Charter 08 signatory

China usually metes out severe treatment to anyone who criticises the system, but Mr Li said he still thinks it was right to sign the charter.

“Change requires ordinary citizens, particularly intellectuals, to speak out. This will slowly influence the government,” he said.

Another signatory, academic Xu Youyu, experienced a different kind of pressure.

Mr Xu, a professor at the Chinese Academy of Social Sciences, was told by his boss that signing the document broke Chinese laws.

“I told him that was nonsense. That’s absolutely not the case,” the expert in Western philosophy told us.

Liu Xiaobo is in detention at an undisclosed location

He was then asked to retract his signature, which he refused to do. “I am willing to pay any price for this,” he added – even going to prison.

Mr Xu has also been told that he will not now be allowed to write the forward to the book of a colleague.

“The publishers received an order from the centre saying that everybody who signed their name to the charter had lost their qualification to publish any article or any book,” he said.

The document that appears to be causing so much concern among senior Chinese leaders is one of the most important published in several years.

It was based on Charter 77, which in 1977 called for respect for human and civil rights in what was then Czechoslovakia.

Property rights

Charter 08 says the Chinese government’s approach to modernisation has been “disastrous”.

It “deprives humans of their rights, corrodes human nature, and destroys human dignity,” the document says.

It calls for a political system that guarantees human rights, freedom of expression and protection for private property.

It has also stirred interest abroad. Several Nobel laureates, among others, have written to Chinese President Hu Jintao asking him to release Liu Xiaobo.

China’s leaders are saying little about Charter 08 – or the detention of Mr Liu.

But President Hu made it clear in a speech to mark the 30th anniversary of the country’s reforms that China would not adopt Western-style democracy.

Willy Lam, of the Chinese University of Hong Kong, said China’s leaders are nervous about calls for political change.

This nervousness has increased with the country’s economic problems, which could create a restless population receptive to calls for political change.

Mr Liu’s detention is a case of “killing the chicken to scare the monkey”, according to Mr Lam.

This is a Chinese idiom that suggests making an example of one person to keep others in line.

No apathy as US election day looms

After nearly two years of digesting speeches and slogans, of being bombarded with adverts and requests for money, of coming to terms with the possibility of the first non-white or female president, Americans are nearly there.

One thing is certain: Americans are ready for this election

They voted in record numbers in the primary elections and now look poised to do the same in the general election. In fact, they already have been.

In more than 30 states, early voting began several weeks ago. It has not been uncommon to see large lines snaking around entrances to libraries, community centres and other voting locations.

If there is one thing that can confidently be said, it is that Americans are ready for this election.

At a time of economic crisis, with opinion polls consistently showing that large numbers of people are unhappy with the direction their country is taking, there is little sense of apathy.

‘Mind-boggling’ costs

And, after eight years of an increasingly unpopular Republican presidency, the advantage is with the Democratic Party – and the party’s candidate, Barack Obama.

Mr Obama has mustered a record-breaking fundraising operation

He has raised mind-boggling amounts of cash – far in excess of even the most generous estimates – enabling him to compete across the country and to afford extravagant amounts of advertising in these final few weeks, culminating in the half hour “infomercial” which aired at prime time on several US networks last week.

Of course, it’s not just the money. Throughout the months that I’ve covered this election, the levels of excitement and enthusiasm at Obama rallies have consistently outstripped those of his opponents, both Democratic and Republican.

Only Hillary Clinton and Sarah Palin – both historic candidates, in their differing ways, have managed to inspire crowds, in a similar fashion.

Transformational

But the question is: Will this enthusiasm, enhanced voter registration and substantial financial advantage be carried over into the polling stations?

If it is, Sen Obama has a real chance of winning many of the states, which have crossed from safe Republican territory into the “toss up” column; places like Indiana and Virginia, which last voted for a Democratic presidential candidate when the current one was just three years old.

The election could be transformational, not just in terms of bringing a non-white president to the White House, but in re-drawing the electoral map, at the same time.

Behind in the polls, Mr McCain insists will be the comeback kid

There are plenty of potential obstacles, though. Some are visceral.

When it comes down to it, how many Americans will find it hard to put a cross next to a man with an exotic name and mixed-race background?

Will Mr Obama, for all his inspiring rhetoric and calm demeanour be seen as too aloof and professorial?

Will Americans prefer the earthier, more “familiar-looking”, Mr McCain; a feature of public life for several decades, with an inspiring story of war time heroism – and reputation for bridging partisan divides?

And what of the polls, which have shown a fairly consistent Obama lead for the past few weeks? Will that keep Democratic voters away, through a sense of complacency, or, perhaps, discourage Republicans?

Palin effect

Certainly, the McCain campaign has made much of the tightening numbers in recent days and in places, such as Pennsylvania – a must win state for the Republican candidate.

There, the Arizona senator’s argument that Mr Obama is too inexperienced in foreign affairs and too left-wing in his economic views is gaining traction.

WHAT COULD GO WRONG? Higher than usual number of voters leads to long queues First-time voters are confused by the process, adding to delays Voters are challenged over their registration or identity at the polls Polling stations experience problems with voting machines High turn-out leads to shortage of ballot papers Householders with a repossession notice denied right to vote

Another big unknown is the Palin effect. Mr McCain’s running mate has inspired and disappointed in equal measure. She is likely to be a reason for many on both sides to turn out.

So, will the pro or anti forces be the most energised?

And whose get out the vote efforts will be the most successful? The Republicans have a good track record in this and the McCain camp seems to have kept cash aside for the final push, but the Obama campaign has broken new ground in its organisational powers.

The experience of the long primary campaign is likely to come in very handy.

Undecided voters

And what of those undecided voters? The sense I get, is that many are people who voted for President Bush four years ago, but are still unconvinced by Mr McCain – either for reasons of ideology or temperament.

If that’s the case, Mr Obama doesn’t need to win them over. He’d be happy if they simply stayed at home.

At this point, the odds remain in favour of an Obama win. But it’s not the bookmakers who will decide the result of the election; it’s the American people.

And after the longest, most expensive – and, according to many veteran observers – most inspiring election campaign in living memory, they are about to make that decision.

Rarely can their choice have seemed so consequential for the country, or the world.

Alaska ethics probe clears Palin

Sarah Palin has always denied any wrongdoing over the affair

Republican vice-presidential candidate Sarah Palin has been cleared by a new report of abuse of power in firing Alaska’s top law enforcement official.

An independent investigator appointed by the Alaska Personnel Board said she had violated no ethics law.

Mrs Palin, governor of Alaska, was accused of sacking Walt Monegan because he failed to dismiss her ex-brother-in-law, state trooper Michael Wooten.

An earlier report for Alaska’s congress found that she had abused her office.

Mrs Palin has always denied any wrongdoing, and her supporters say the charges were motivated by her political opponents.

The Alaska Personnel Board report, led by investigator Timothy Petumenos, said there was “no probable cause to believe that the governor, or any other state official, violated the Alaska Executive Ethics Act in connection with these matters”.

Walter Monegan says Mr Wooten did nothing to warrant his dismissal

According to a copy of the report posted on the Anchorage Daily News website, the board concluded that there was no need to hold a hearing on “reputational harm”, as Mr Monegan had requested.

The report did say that the use of “private e-mails for government work” needed to be addressed, an apparent reference to Mrs Palin’s use at times of her personal e-mail account for state business.

Mrs Palin referred the matter to the personnel board herself.

The earlier report for the state legislature, released last month, said Mr Monegan’s refusal to fire Mr Wooten was not the sole reason for his dismissal, but a contributing factor.

However, it added that the actual sacking of Mr Monegan was a “proper and lawful” exercise of Mrs Palin’s rights as governor of Alaska.

Indian Moon probe pictures Earth

The terrain mapping camera will eventually help compile an atlas of the Moon

India’s Chandrayaan 1 spacecraft has sent back its first images.

The probe was launched on 22 October to embark on a two-year mission of exploration at the Moon.

Ground controllers in Bangalore instructed the probe to take pictures with its Terrain Mapping Camera as the spacecraft made a pass of the Earth.

Chandrayaan also fired its engines for three minutes to carry out an orbit raising manoeuvre which takes the probe closer to the lunar body.

That was the fourth manoeuvre of its type made by the spacecraft, extending its orbit to more than half the distance to the Moon.

Just one more like it is required to take Chandrayaan into the Moon’s vicinity, at a distance of 384,000km from Earth.

Keeping up

The first images, taken at an altitude of 9,000km, show the northern coast of Australia while others, snapped at a height of 70,000km, show Australia’s southern coast.

The camera takes black and white images at a resolution of 5m

The Terrain Mapping Camera is one of the eleven scientific instruments aboard Chandrayaan 1. The camera takes black and white pictures at a resolution of about 5m.

Once Chandrayaan reaches the Moon, it will slip into orbit to compile a 3D atlas of the lunar surface and map the distribution of elements and minerals.

The mission is regarded as a major step for India as it seeks to keep pace with other spacefaring nations in Asia.

The health of Chandrayaan 1 is being continuously monitored from the ISRO Telemetry, Tracking and Command Network (ISTRAC) in Bangalore with support from Indian Deep Space Network antennas at Byalalu.

The Indian Space Research Organisation (ISRO) – the country’s space agency – says that all systems have been performing well.

Crucial battle on Pakistan’s frontline

A tank fires at militant movement detected at the edge of the town of Loi Sam

Entering the combat zone, we drive past mile after mile of flattened buildings, crops and trees, razed to prevent ambushes.

Even still, soldiers are on high alert, watchful for possible attacks.

They race down the road at top speed, firing occasional rounds from the guns mounted on the backs of their vehicles. Cobra attack helicopters circle overhead.

This is the tribal area of Bajaur near the Afghan border, or rather a small part of it.

The Pakistan army has wrested control of a 38km (24-mile) region from the Taleban, and it has given us rare access to the frontline.

We arrive in the town of Loi Sam, now in ruins. Militants here were targeted by the air force and artillery, followed by a ground offensive that lasted five days.

Civilians fled long ago – hundreds of thousands have been displaced by the fighting.

Key crossroads

A tank guards one of the approaches to the town, firing whenever there is movement in the distance.

Already a bulldozer has begun clearing away the blasted shells of buildings.

“You have to either occupy or remove the structures,” says one soldier, “otherwise the militants will return to them once we’ve left.”

For the army, this is a crucial victory: Loi Sam lies at a key crossroads between Afghanistan and Pakistan. From here local and Afghan insurgents could launch attacks in both countries.

“The militant activities from this tribal agency were radiating in different directions, towards Afghanistan, the rest of the border region and [Pakistan’s] settled areas,” says army spokesman Maj Gen Athar Abbas.

“Now we have this area under control, it will affect militant activities elsewhere, and we’ll capitalise on that.”

“The worst is over,” agrees Maj Gen Tariq Khan, who is in charge of the offensive. “I think we have turned the corner.”

Guerrilla warfare

The battle has been slow and deliberate. It took six weeks for the army to secure the road from the headquarters of the local security forces, the paramilitary Frontier Corps (FC), to Loi Sam, a distance of 13km.

Troops fought compound to compound in a terrain ideal for guerrilla warfare.

“There are road bends, there are depressions, there are houses located inside the depressions, trenches prepared, caves, tunnels, everything prepared,” says Col Javed Baloch, commander of one of the posts along the road, “so it was difficult to find them, to spot them, and then take the area.”

The Taleban has made extensive use of bunkers and tunnels which connected different compounds.

One commanding officer, Maj Kamal, took me 5m underground for a tour of the network.

He says his men blocked 20 or 30 passageways, including one that stretched 100m to a stream.

Many in Bajaur trace the roots of the uprising to a suspected US missile strike on an Islamic seminary, or madrassa, in November 2006, which killed around 80 people.

That radicalized local Islamists, they say, who were reinforced by militants from other Pakistani tribal areas. There was also an influx of fighters from Afghanistan.

Until and unless Afghanistan is made stable, you can do a million development activities in the Federally Administered Tribal Areas, and there will be no result Shafir Ullah Government representative in Bajaur

The battle for Bajaur was triggered when the FC tried to re-establish a check post in Loi Sam in early August. Fierce resistance led to the siege of the FC base before the army was called in.

Like other army officers, Maj Gen Tariq Khan criticises unilateral US air strikes on suspected insurgent targets as deeply counter productive.

But, he says, during the Bajaur operation there has been improved intelligence sharing and co-ordination with coalition forces, which has reduced cross-border militant infiltration from Afghanistan. “We’ve seen practical on-ground adjustments in relevance to our operations,” he says.

“I’ve got a very positive response and I feel we’ve set up some system in which we’re in some kind of regular touch, and I think that’s the way to go.”

Hearts and minds

Now that the fighting has subsided, attention is turning to reconstruction and development: acknowledgement that winning hearts and minds in the impoverished tribal region along the border is essential to fighting the insurgency.

But that won’t be enough, says Shafir Ullah, the government representative in Bajaur who deals with tribal elders.

“The reasons [for the insurgency] are poverty, backwardness and others, but the real problem is linked with Afghanistan,” he says.

“Until and unless Afghanistan is made stable, you can do a million development activities in the Federally Administered Tribal Areas, and there will be no result.”

The Taleban have been pushed back – the army claims it has killed 1,500 – but they haven’t been defeated.

Two soldiers were killed by rocket fire in Loi Sam shortly after we left the town, bringing the army’s death toll to 75. Nearly 100 civilians have also died, says Shafir Ullah.

One hillside post is so exposed to Taleban fire that the soldiers have dug in for protection.

Forty men can fit in the massive bunker at any one time, a few are saying their prayers and reciting the Koran in a makeshift underground mosque when we visit.

This is not a popular war in Pakistan: some have criticized the military for killing fellow Muslims.

Others accuse it of fighting “America’s War”. But the army insists it is fighting to defend Pakistan, not just responding to US pressure for action against the Taleban.

Even as dusk falls artillery guns continue to pound militant positions. The war in Afghanistan has spilled over into Pakistan.

This is the other, rarely seen, side of the battle against the Taleban.

Libya compensates terror victims

Most of those killed in the Lockerbie bombing were Americans

Libya has paid $1.5bn into a US compensation fund for relatives of victims of terror attacks blamed on Tripoli, the US state department says.

The fund was agreed in August to settle remaining lawsuits in the US.

The attacks include the 1988 Lockerbie bombing that killed 270 people and the 1986 bombing of a Berlin disco which killed three and wounded more than 200.

Under the deal, Libya did not accept responsibility for the attacks, but agreed to compensate victims.

It is the final step in a long diplomatic process, which has seen Libya come back into the international fold.

US contribution

The first $300m Libyan payment into the fund was made on 9 October, shortly after an historic visit to Tripoli by US Secretary of State Condoleezza Rice.

Its second payment of $600m was received on Thursday and a final installment of $600m was made on Friday, said David Welch, the US diplomat who negotiated the settlement.

In exchange, President Bush has signed an executive order restoring the Libyan government’s immunity from terror-related lawsuits and dismissing pending compensation cases in the US, the White House said.

The US and Libya agreed to the compensation deal in August

Our correspondent says it is unclear why it took so long for the money to be paid into the fund.

She adds that there may have been contributions by American companies lured by business opportunities in Tripoli and keen to expedite the process of normalising ties.

The US State Department, however, has insisted that no money from the American taxpayer will be used for the US portion of the fund.

Libya has already paid the families of Lockerbie victims $8m (£4m) each, but it owes them $2m more.

The fund will also be used to compensate relatives of seven Americans who died in the bombing of a French UTA airliner over Chad in 1989.

In 2004, Libya agreed to pay $35m in compensation to non-US victims of the 1986 Berlin bombing.

In the same year, relatives of non-US victims of the UTA bombing accepted a payment of $1m each from the Gaddafi International Foundation for Charity Associations.

Relations between Libya and the US improved in 2003 when Tripoli stopped working on weapons of mass destruction.

The decision led to the restoration of US diplomatic ties with Libya in 2006.

In turn, it was removed from America’s list of countries sponsoring terrorism.

Regional DR Congo talks planned

Fears are growing for thousands of people who have fled into the bush

The Rwandan and Congolese presidents have agreed to try to end fighting in the Democratic Republic of Congo.

Rwanda’s Paul Kagame and his Congolese counterpart Joseph Kabila agreed to attend a regional summit after talks with a senior EU official on Friday.

French Foreign Minister Bernard Kouchner and UK Foreign Secretary David Miliband are due to meet the two men and visit Goma on Saturday.

The UN refugee agency has described the situation as “a total disaster”.

Aid groups say they are struggling to reach 250,000 people fleeing fighting between government and rebel forces.

European Union Development and Humanitarian Aid Commissioner Louis Michel said the only way to resolve the crisis was through a summit involving all regional leaders.

He said agreement had been reached on the prospect of a regional summit after two days of talks in the Congolese capital Kinshasa and the Rwandan capital, Kigali.

“They are both fully agreed on the idea of having this summit,” Mr Michel told.

But renegade rebel general Laurent Nkunda had not yet been asked to join the talks, Mr Michel added.

A ceasefire is holding in and around Goma, the capital of North Kivu province, but aid agencies say the situation there remains highly volatile.

Gen Nkunda’s forces are positioned some 15km (nine miles) from the city, which they have threatened to take unless UN peacekeepers guarantee the ceasefire and security there.

Refugee stampede

As diplomatic efforts to end the crisis gathered pace on Friday, UN Secretary-General Ban Ki-moon on Friday called leaders in Africa, Europe and the US to urge them to “do all they can to bring the parties to a neutral venue for negotiations”.

Tanzanian President Jakaya Kikwete, the current African Union chairman, and AU Commission chief Jean Ping said the summit could be held in the Tanzanian capital Dar es Salaam or the Ethiopian capital Addis Ababa.

Food, water and medicine in the city are scarce, and many international relief workers have pulled out after reports widespread rape and looting by retreating Congolese troops.

The BBC’s Orla Guerin witnessed scenes of chaos at a refugee camp in Kibati outside Goma, as desperately hungry people surged towards aid distribution points.

Children were trampled underfoot and panicked aid staff were forced to beat back the heaving crowd.

Some who reached Kibati told the BBC they had more chance of getting food in the forests than inside Goma.

Trading accusations

The UN refugee agency said camps sheltering 50,000 refugees in Rutshuru, 90km north of Goma, had been forcibly emptied, looted and then burnt to the ground.

“There are some 50,000 people who were in those camps,” said UNHCR spokesman Ron Redmond. “We don’t know where they would be, we’re afraid that they may have just dispersed off into the bush.”

The UN has more than 17,000 peacekeeping troops in DR Congo – the largest UN force in the world – but correspondents say it is struggling to cope with the scale of the current crisis.

The origin of the ongoing conflict in eastern DR Congo is the 1994 genocide in neighbouring Rwanda.

Gen Nkunda says he is fighting to protect his Tutsi community from attack by Rwandan Hutu rebels, some of whom are accused of taking part in the genocide.

The Congolese government has often promised to stop Hutu forces from using its territory, but has not done so.

There have also been accusations of collusion between DR Congo’s army and Hutu guerrillas.

The Congolese government, for its part, has accused Rwanda of backing Gen Nkunda.

Rwanda denies this, but it has twice invaded its much larger neighbour in recent years.

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Bank crisis to dominate EU talks

There are fears of a recession in Germany, the EU’s biggest economy EU leaders are meeting in Brussels to discuss a multi-billion-euro rescue scheme for Europe’s ailing banks. The 27-member bloc is expected to rally behind plans agreed on Sunday by officials from the 15-nation eurozone. Stocks markets appear to have stabilised since then, but are expected to remain nervous because of worries over a recession in the US and Germany. Green groups are fearful that the economic crisis will derail EU plans to tackle climate change. ‘Common sense’ European leaders at the meeting are expected to try to keep the emphasis on joint action to unfreeze bank lending and restore confidence in the markets. “I am sure… there will be a common position,” said European Commission chief Jose Manuel Barroso. “I have boundless faith in the sense of responsibility and common sense of our heads of government and states.” However, Germany, the continent’s biggest economy, is on the verge of recession, a report said on Tuesday. Leaders will meet under the chair of the French, who hold the current presidency, and have a packed agenda that includes: • Bank bail-outs Europe’s largest economies have announced hundreds of billions of euros in state support for their struggling banks. France, Germany, the Netherlands, Spain and Austria are planning to guarantee bank lending, provide short-term liquidity and partly nationalise some banks, in schemes modelled on the UK’s £500bn (640bn-euro) bail-out package. Other members of the 15-nation eurozone are expected to brief their colleagues on similar rescue plans. French President Nicolas Sarkozy, chairing proceedings, has urged European governments to act together in the crisis, to avoid damaging splits. In a departure from the norm, European Central Bank President Jean-Claude Trichet will address the summit on Wednesday. The commission now has the task of scrutinising each country’s plan to ensure they do not disadvantage other EU member states or violate EU competition laws. • Immigration Leaders are expected to sign an immigration pact, committing their countries to common principles for handling immigrants, and trying to achieve a better match between immigrants’ skills and jobs in the EU labour market, which is facing certain skills shortages and an ageing workforce. An EU “return directive” sets out common rules for processing illegal immigrants, while the EU also has plans a “Blue Card” scheme to attract more high-skilled immigrants. • Energy France is anxious to get agreement on a package of environmental measures before its EU presidency ends in December. President Sarkozy has stressed that, despite the economic strains caused by the credit crunch, the EU must become “a low-carbon economy”. Politicians in Germany, Italy and Poland have argued that existing targets for reducing greenhouse gas emissions would impose extra burdens on electricity generators and carmakers, as an economic recession looms. In the case of the UK, similar resistance has arisen over including aviation in the CO2 targets. • Lisbon treaty EU leaders are waiting for the Irish government to come up with a “roadmap” – a way forward – after Irish voters rejected the Lisbon Treaty in June. The treaty, aimed at streamlining EU institutions to cope with enlargement, has to be ratified by all 27 member states to take effect. Most have now ratified it, but no big breakthrough is expected at this summit. • Relations with Russia The EU has postponed talks on a new EU-Russia partnership treaty, amid continuing concern about Russia’s military presence in Georgia. EU monitors verified a Russian withdrawal from buffer zones around the breakaway regions of South Ossetia and Abkhazia, but the situation remains very tense. There are divisions in the EU about when to resume partnership talks.