Healthspan Blog

By Biswajyoti Das

GUWAHATI, India (Reuters) - Indian authorities suspect Islamist groups were behind coordinated bomb blasts in the troubled state of Assam that killed 76 people and wounded more than 320, police said on Friday.

Separatist movements have riddled India's remote northeast for decades, but the level of sophistication and precision of Thursday's bombings echo similar blasts across India over the past year which have been blamed on Islamist groups.

Bangladesh-based Harkat-ul-Jihad al Islami (HuJI) is the main suspect in Thursday's attack. Police say the Islamist group could have sought to avenge attacks on Muslim settlers by indigenous tribes that killed at least 47 people last month.

"Our initial investigation points that these attacks were carried out by jihadi forces with the help of local militant groups," Khagen Sharma, inspector general of police in Assam and chief Assam's intelligence services, told Reuters.

The separatist United Liberation Front of Asom (ULFA) was also suspected, but police and security experts say the group may have only played a supporting or logistical roles. ULFA has denied any involvement.

Assam is one of seven states in the remote northeast racked by insurgency, connected to India by a thin strip of land and surrounded by Bangladesh, China, Myanmar and Bhutan.

Over the years Muslim settlers, mostly from Bangladesh, have moved to this Hindu and tribal-dominated region, leading to increased ethnic tensions that could have played into the hands of Islamists.

Analysts say plastic explosives were used in the blast to cause maximum damage and were remotely detonated within five minutes of each other using timer devices -- hallmarks of strikes by suspected Islamist groups in India.

"HuJI has actually been fingered by Assam police as being involved in the attack, an accusation substantiated by the discovery of RDX (plastic) explosives," U.S. private intelligence firm Stratfor said in a report.

Indian home ministry officials said on Friday they had warned the Assam government of a possible militant strike after Indian authorities intercepted a telephone conversation between Pakistan and HUJI operatives in Bangladesh referring to Assam.

"The Islamic groups from Bangladesh were using the state as a transit route to move in the rest of the country," Sharma said.

"Their activities in Assam were confined to supplying weapons and explosives, but they have become more active in Assam recently," he said.

FRAGILE SECURITY

The bombings in Assam have underscored the fragile nature of India's internal security, security analysts say.

"At the moment, we don't have a long-term strategy, things look really bad," security analyst C. Uday Bhaskar told Reuters in New Delhi.

A wave of bomb attacks has hit India in recent months, killing more than 125 people. Police have blamed most of those attacks on Islamist militants, although Hindu militants have also been suspected of carrying out several attacks.

With general elections due by early 2009, India's main Hindu-nationalist opposition Bharatiya Janata Party said the government had failed to check the influx of militants from Bangladesh, a sentiment echoed by Indian newspapers.

"India can no longer afford the growing perception of being led by an excessively gentlemanly prime minister and a dandy but weak home minister," The Times of India newspaper said in an editorial headlined "India Under Siege."

The Assam blasts also exposed poor disaster preparedness.

"There is a shortage of blood in hospitals and we have sought help from NGOs," said C.K. Bhuyan, an official in Guwahati, Assam's main city where 41 people died in four separate bombings. Seven other bombs went off in three other towns in the state.

Mobile telephone service providers have sent text messages urging residents in the city to donate blood to the injured.

(Writing by Bappa Majumdar; Editing by Krittivas Mukherjee and Paul Tait)

By Jeremy Gaunt and Hideyuki Sano

LONDON/TOKYO (Reuters) - Japan cut interest rates for the first time in seven years on Friday, expecting severe stress in the global economy to persist, while UK banking giant Barclays said it was raising $12 billion in capital.

The Bank of Japan's move followed a cut in interest rates from the U.S. Federal Reserve earlier in the week and likely presaged the same from the European Central Bank and Bank of England next week.

Policymakers have been struggling to find the right response to a rapid slowdown in the global economy that has hammered corporate profits and sparked a record freefall in global stock markets in October.

Ripples from the crunch continued to flow on Friday with Barclays Plc saying it planned to raise 7.3 billion pounds ($12.06 billion) in additional capital from outside investors including from Gulf state Qatar.

Earlier this month, Barclays said it wanted to raise capital but would raise it privately rather than take UK government cash, as rivals Royal Bank of Scotland, Lloyds and HBOS are.

Mizuho Financial Group became the second major Japanese bank this week to cut its full-year net profit forecast by more than half because of bad loans and losses in its equity portfolio.

The global downturn has come hard on the heels of the credit crunch, the worst financial crisis since the Great Depression, with investors facing what Japanese Prime Minister Tara Aso "a harsh storm seen only once in 100 years."

Equity markets fell again on Friday, with Japan's Nikkei closing down 5 percent on disappointment at the size of the interest rate cut and Asian shares set to post their worst month ever.

European shares were off about 0.5 percent..

The MSCI all-country world index has lost around 42 percent so far this year, although gains in the earlier part of this week were putting it on track for its best week in its more than 20 year history.

RATE CUTS

The Bank of Japan cut its benchmark overnight call rate to 0.30 percent from 0.50 percent, a slightly smaller reduction that the quarter point many had expected.

A 4-4 vote on the policy board meant the central bank governor had to cast the deciding vote.

"At a time of extreme financial uncertainty and volatility, to have a policy board so evenly split is hardly reassuring," said Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong.

"Whatever the desired outcome -- the fact that the board was so evenly split jeopardizes that outcome."

The rate reduction was the latest in a series of rate cuts globally as central banks move rapidly to try to cushion growth now that interbank lending rates have been consistently falling.

The average benchmark interest rate in the Group of Seven countries has dropped to 2.36 percent, the lowest since April 2005, from 4 percent in August 2007 when credit markets began imploding because of mounting subprime mortgage defaults.

Economists widely expected Australia, Britain and the euro zone to cut rates next week.

European policymakers have some lingering concerns about inflation but will get an update with the release of euro zone prices data later in the day (1000 GMT).

CONTRACTION

The economies of Britain, Europe, Japan and the United States are contracting. The latest growth data showed the U.S. economy shrank in the third quarter, three months that ended with the dismantling of Wall Street in September.

The U.S. economy shrank at a 0.3 percent annual rate in the third quarter, the sharpest contraction in the United States in seven years. U.S. consumers slashed spending at the fastest rate in 28 years in the third quarter.

Along with central banks, governments around the world were waging an all-out battle to contain the fallout from the financial crisis, including by cutting taxes, taking equity stakes in banks and backing bank deposits.

The South Korean government is considering $7.3 billion in additional spending to support domestic demand, according to a local business paper, as the worst fears appeared to have dissipated about a meltdown in Asia's fourth-largest economy.

On Thursday, Japan also unveiled a $50 billion economic stimulus package and German cabinet minister Michael Glos said the European country planned to introduce a range of steps worth up to $39 billion.

(Reporting by Reuters bureaus worldwide; Editing by Mike Peacock)

(jeremy.gaunt@thomsonreuters.com; +44 207 542 1028; Reuters Messaging: jeremy.gaunt.reuters.com@reuters.net))

($1=.6054 Pound)

PESHAWAR, Pakistan (Reuters) - A suicide bomber killed at least seven people on Friday in an attack on police in the northwestern Pakistani town of Mardan.

Pakistan has seen a surge in militant violence, mainly in the northwest, since last year with security forces attacking militants in sanctuaries near the Afghan border and the militants responding with suicide bomb attacks.

Mardan police chief Akhtar Ali Shah said the attacker had detonated explosives as he was leaving his office with an escort.

Mian Iftikhar Hussain, information minister of North West Frontier Province, said eight people, including the bomber, had been killed and 25 wounded. A doctor at Mardan's main government hospital said nine people had been killed, three of them policemen.

A severed head, apparently that of the bomber, had been found, Shah said. Suicide bombers usually strap explosives to their bodies and their heads are cut off in the blast.

Mardan, 110 km (70 miles) northwest of Islamabad, is the gateway to the Bajaur region on the Afghan border where security forces have been fighting militants since August.

(Reporting by Zeeshan Haider and Alamgir Bitani; writing by Robert Birsel; editing by Roger Crabb)

By David Bailey and David Lawder

DETROIT/WASHINGTON (Reuters) - Six U.S. governors and a group of chief executives on Thursday urged the Bush administration in a letter to aid the embattled auto industry while the White House rebuffed a request for direct support of a merger between GM and Chrysler.

An administration official said the focus instead would be on speeding of $25 billion of low-interest loans for factory retooling, a step the industry's allies say does not go far enough to reverse a deepening industry crisis.

Meanwhile, auto parts makers worried that a merger would eliminate vehicles that they supply, and a prominent industry consultant said GM could up to 40,000 Chrysler jobs and 16 of its 26 models.

GM and Chrysler-owner Cerberus Capital Managementhave been in talks for weeks over a merger that would combine struggling automakers hit by a sales downturn that started in the United States and has spread globally.

GM had been lobbying for up to $10 billion in government support in advance of a merger that analysts have said would likely result in thousands of job cuts across the white-collar and blue-collar work forces with plant closings.

GM, Chrysler and Ford Motor Co -- the potential odd-man out if GM and Chrysler get together -- have focused on maintaining cash to withstand the sales downturn and U.S. market share losses.

U.S. auto sales have fallen 13 percent through September and automakers expect to report October monthly auto sales on Monday that reflect the continued downturn.

All three automakers face increased scrutiny from creditors and investors over whether they have the financial strength to ride out the slump, which is now seen continuing through 2009.

PLEAS FOR HELP

The governors of Michigan, New York, Ohio, Kentucky, Delaware and South Dakota sought an immediate response to an auto industry crisis that puts at risk "the financial well-being of other major industries and millions of American citizens.

"The auto industry; their network of suppliers, vendors, dealers and other businesses and the communities that rely on those businesses face unimaginable challenges -- challenges we urge you to address," the letter said.

Michigan Gov. Jennifer Granholm, told reporters that quick loans were needed for the industry to get through the next six to 12 months.

"The bottom line is that all three automakers need some liquidity, some assistance with cash and they need it right now," Granholm said.

"The alternative is worse," Granholm said. "The alternative is the industry doesn't have access to funds and we lose a company or two. We don't want to do that."

The Business Roundtable, a group of chief executives of some of the largest companies in the United States, supported Treasury providing direct capital injections to automakers and their finance companies.

The group sent its letter to President Bush, Federal Reserve Chairman Ben Bernanke and lawmakers.

The massive U.S. auto parts supply base, comprised of a handful of large publicly traded companies and thousands of smaller private independents, also has been worried that a merger might drive even more firms out of business.

An investment banker familiar with the talks said suppliers were in for hard times regardless of whether there is a GM deal because the industry has far too much production capacity.

"A lot of plants have got to get closed," the banker said. "Regardless of government intervention, the impact will still be the same on suppliers."

PARITY FOR FORD?

Ford Motor Co also has had discussions with policymakers and would want some support should the government assist a GM and Chrysler merger, the automaker's president of the Americas told reporters.

"We have ongoing dialogue with policymakers and the powers that be to not only talk about the challenges facing the industry, but also the challenges facing Ford," Mark Fields, Ford's president of the Americas, told reporters.

"We just want to make sure we continue that ongoing dialogue and make sure that whatever happens there is a degree of parity," he said.

Kimberly Rodriguez, principal of Grant Thornton's automotive practice, said a GM-Chrysler merger would not be optimal, but was a good choice under the current circumstances and would require government aid or outside investors to work.

"There remains risks within a combined structure," she said. "There will be a lot of pressure on them to perform."

A Grant Thornton study of the merger potential found 30,000 to 40,000 of Chrysler's employees might be eliminated. The ripple effect could bring job losses in the 100,000 to 200,000 range when taking into account suppliers and dealers.

The study also found the combined company could slice up to $10 billion of costs, mainly in corporate functions such as accounting or information technology, purchasing, research and development and engineering.

(Additional reporting by Soyoung Kim, Poornima Gupta in Detroit, Karey Wutkowski in Washington and Jui Chakravorty in New York)

By Andrew Gray

WASHINGTON (Reuters) - Hailed as an American hero for his role in pulling Iraq back from the brink of all-out civil war, U.S. Army Gen. David Petraeus takes on an even more challenging job on Friday as the head of U.S. Central Command.

The warrior-scholar with a doctorate in international relations from Princeton University takes responsibility for U.S. military operations in a volatile swathe of the world that includes Afghanistan, Pakistan, Iraq, Iran and the Gulf.

As the top commander in Iraq, Petraeus presided over a surge of 30,000 extra U.S. troops into the country and implemented a strategy focused on protecting the Iraqi population, which contributed to a steep decline in violence.

The turnaround in Iraq was also due to other factors -- including Sunni former insurgents turning against al Qaeda and a ceasefire by radical Shi'ite cleric Moqtada al-Sadr -- but Petraeus has received widespread credit for his leadership.

His work earned lavish praise from President George W. Bush and both candidates to take over in the White House, particularly Republican Sen. John McCain, and a promotion to the post at Central Command, based in Tampa, Florida.

But while Iraq was regarded by many as a lost cause when he took command there in February 2007, Petraeus could at least concentrate on one country and had as many as 170,000 U.S. troops under his direct command.

In his new post, he has responsibility for an area that includes 20 countries and less direct control.

Afghanistan will demand much of his attention. Insurgent violence has risen sharply there this year and both McCain and his Democratic rival Sen. Barack Obama, who leads in the polls, have pledged to send more U.S. troops.

"You have a leader who's become, obviously, well known because of his role in Iraq and the public perception is driven by that," said Peter Singer, a military analyst at the Brookings Institution in Washington.

"Yet I think, with his Centcom hat on, it's going to be Afghanistan that defines it."

But the fight against the Taliban is led by a 50,000-strong NATO force with troops from more than 40 nations that reports to U.S. Army Gen. John Craddock, the Atlantic alliance's top commander, based in Belgium, rather than Petraeus.

Petraeus will only have a direct line to about 19,000 U.S. troops in Afghanistan engaged in missions ranging from training Afghan forces to conducting counterterrorism operations.

PAKISTAN MILITANTS

However, analysts say the authority of his office -- the head of Central Command is one of the top posts in the U.S. military -- and his own personal reputation will give Petraeus substantial influence across the region and in Washington.

In Pakistan, no one is seriously suggesting a large influx of U.S. troops to fight militants there so Petraeus will have to focus largely on persuading and assisting the Pakistani military to carry out effective operations.

Military leaders in Pakistan, where al Qaeda has regrouped in areas bordering Afghanistan, will be keen to learn from Petraeus, said Shuja Nawaz, the author of a book on the Pakistani army called "Crossed Swords."

"The knowledge that he's acquired in fighting ... militancy in Iraq is going to be listened to," Nawaz said.

"Also, Gen. Petraeus' knowledge of political systems and working with politicians is something that would be valuable."

Petraeus always argues that defeating insurgencies requires much more than military force and stresses the importance of political deals and economic development.

With his intellectual air and high media profile, Petraeus is not universally loved in the U.S. military. Some believe he regards himself too highly and nickname him "King David."

But Singer said there was no question that Petraeus was well-suited to the Central Command post.

"He's obviously been proven to be ... besides a distinguished leader, a pretty creative thinker and a great motivator," he said.

(Editing by David Wiessler)