Archive for August, 2008

Alitalia sale advisers meet with Air France-KLM

Sunday, August 31st, 2008

Bank managers advising the government on the sale of Alitalia were to discuss the failing airline’s recovery plan Wednesday with Air France-KLM, Italian news reports said.

Top officials of Intesa Sanpaolo were traveling to Paris to present the plan to the Franco-Dutch carrier, which made a failed bid for Alitalia earlier this year.

Intesa Sanpaolo and Air France-KLM declined to comment on the reports.

News of a possible involvement of Air France-KLM came a day after 16 investors joined to create a new company that plans to take over Alitalia’s profitable assets and inject euro1 billion (US$1.5 billion) into the airline.

The group is lead by Roberto Colaninno, the chairman of motorcycle maker Piaggio, as well as Carlo Toto, the head of Italy’s second-largest airline, Air One.

Alitalia’s future has been on hold since Air France-KLM walked out of talks to take over the Italian carrier after reaching an impasse with unions.

Premier Silvio Berlusconi has vowed to save Alitalia and keep it in Italian hands. His government tapped Intesa Sanpaolo as an adviser in trying to sell its 49.9 percent stake in the airline.

News reports say the government is looking to break Alitalia in two, with the new company injecting money in the profitable part and absorbing part of Air One, while Alitalia’s bad assets will be covered by bankruptcy protection.

The government is scheduled to hold a Cabinet meeting Thursday and is expected to discuss possible measures for saving Alitalia. According to recent reports, the Cabinet might discuss changes to an existing bankruptcy protection law.

Alitalia is scheduled to hold a board of directors meeting Friday.

Apple fans loyal despite iPod, iPhone 3G woes

Saturday, August 30th, 2008

First, an iPhone price cut left early buyers feeling foolish, and then came reports that some iPods were spitting sparks.

Now, the new iPhone 3G has been marred by bugs, spotty service, disappearing programs for the device and a veil of secrecy over software developers trying to broaden its appeal.

Such a string of mishaps and missteps might throw another electronics company into crisis. But of course, Apple Inc. isn’t just another electronics company. Even as iPhone griping rages online, it looks like Apple’s sterling reputation will emerge untarnished.

“The objective reality is that Apple does plenty of wrong,” said Peter Fader, a marketing professor at the Wharton School of the University of Pennsylvania.

However, Fader said, the company’s loyal fans and even casual users have come to identify so strongly with Apple’s high-end, individualistic vibe that they’re willing to look the other way.

“Very few companies have this kind of iconic status where anything they do, even if it is mediocre, will automatically have a halo around it,” he said.

Kern Bruce, a 25-year-old Web designer in Boston, Massachusetts, waited in line for 13 hours to buy an original iPhone. He sold it to upgrade to a 3G.

“There was no going back at that point, but after I sold it, I quickly started to regret it,” he said. Bruce’s complaints echo countless Web forum posts: The device gets uncomfortably warm. Programs crash. And it so seldom connects to AT&T’s speedier third-generation, or 3G, data network that Bruce carries the iPhone around with 3G turned off.

Apple, which declined to comment for this story, said little as complaints rolled in but then released a software fix it said would improve the device’s ability to connect to 3G networks. Users on various sites have reported no improvement.

Bruce, an Apple aficionado since the very first iPod, also recently returned a MacBook Air because it got too hot and said his Apple cinema-display monitor sports burned-in images.

“They’re skimping on materials, on testing things to gain market share, but they’re kind of pushing away people who have been with the brand even when [it was] struggling,” he said.

Yet when asked whether he’d abandon Apple, the answer was no.

Macs are “a lot better than the alternative in terms of stability, viruses, being able to do high-end graphics work,” he said. “I wouldn’t tell people to stop getting Apple products. They make very good products.”

The new iPhone marked an important shift in the company’s relationship with software programmers. The first iPhone didn’t let outsiders write legitimate software for the device, though hackers did so anyway. Apple reversed course with the 3G and gave outside programmers tools to build iPhone applications and sell them on iTunes.

But developers, too, are irked by Apple’s secrecy and limits on the kind of programs they can design. An unusually restrictive agreement they must sign keeps them from comparing notes even with fellow programmers.

They also complain that Apple has limited their access to the iPhone’s inner workings. For example, non-Apple programmers can’t reach into a user’s iTunes library and play a song or display cover art.

Apple has kept developers in the dark as to why some applications are rejected or, in rare cases, removed from the iTunes store without warning or explanation.

One such program let people use the iPhone’s cell service to connect a computer to the Internet. Its developer, a company called Nullriver, did not respond to a message seeking comment but wrote of its consternation on its blog.

DoApp, a small mobile-software company in Minneapolis, Minnesota, said it took two months for Apple to review and ultimately reject its 99-cent whoopie cushion application. Wade Beavers, DoApp’s vice president of strategy, said Apple had never hinted that a program that mimics bodily functions would be considered inappropriate.

“Sometimes you feel like you’re in line with the Soup Nazi,” Beavers said, referring to a “Seinfeld” episode in which a soup vendor capriciously banished patrons. “It’s a really good deal to be part of the Apple thing, and you don’t want to say anything to rock the boat. ‘No soup for you! Your apps are gone!’ ”

Beavers also grumbled about crashing Mac hard drives and terrible iPhone 3G service. Even so, he said he’d still buy Apple products on the strength of their design — and because Apple gave small companies like DoApp the same access to the iTunes store as industry big shots.

Baba Shiv, a professor of marketing at the Stanford Graduate School of Business, compares Apple’s fan base to Harley-Davidson motorcycle riders who pass over arguably higher-quality Japanese bikes.

The critical move that changed Apple’s relationship with users was the launch of the iPod, Shiv said. Apple went from being a private luxury, a maker of niche products, to a mainstream one and wormed its way deeper into customers’ psyche.

“In the public domain, the coolness factor matters,” he said. Indeed, an iPod “halo effect” is thought to be one big reason why Macs have boosted their share of the U.S. personal-computer market to nearly 8 percent.

Shiv said Apple’s fans play down negative information to explain their relationship to the brand — and justify spending more for products that may not be better than the competition’s.

Once that loyalty is formed, “the transgression has to be so egregious for someone to completely change the narrative,” Shiv said. “If something like this had happened to Microsoft, the long-term impact would be much more for Microsoft than for Apple.”

Activity key to breast cancer patients’ survival

Saturday, August 30th, 2008

Women who stay active after being diagnosed with breast cancer — and even those who take up exercise for the first time after diagnosis — have a better chance of surviving the disease, a new study shows.

“Anything is better than nothing,” Dr. Melinda L. Irwin of the Yale School of Medicine in New Haven, Connecticut, one of the researchers on the study, told Reuters Health. “We actually observed benefits with just doing a little bit of exercise.”

Dozens of studies over the past two decades have shown that exercising can reduce breast cancer risk by up to 40 percent, while more recent research has found that activity has equal or even greater benefits for survival among women with the disease.

To better understand the timing and amount of physical activity necessary to improve survival, Irwin and her team looked at 933 women who had been diagnosed with breast cancer between 1995 and 1998 and were followed until 2004.

They found that women who got the equivalent of at least two to three hours of brisk walking each week in the year before they were diagnosed with breast cancer were 31 percent less likely to die of the disease than women who were sedentary before their diagnosis.

Two years after diagnosis, the women who did any recreational activity at all had a 64 percent lower risk of dying than women who were inactive at that point, while women who got at least two to three hours of brisk walking in weekly reduced their risk of death by 67 percent.

Women who decreased their physical activity after diagnosis were actually four times more likely to die of breast cancer than those who were sedentary and remained so, Irwin and her colleagues found. But those who had been inactive and started exercising after being diagnosed cut their death risk by 45 percent.

Women undergoing breast cancer treatment should think of exercise as a part of their therapy, Irwin said, and be sure to make the time for it, even just by beginning with a 15-minute walk every other day.

Being active isn’t only beneficial for survival, Irwin said; it may also help with the increased cardiovascular disease risk that may accompany treatment, and will certainly improve women’s quality of life in many ways. “Hopefully this study shows what a major benefit exercise can be,” she said.

July incomes drop by largest amount in 3 years

Saturday, August 30th, 2008

Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

The Commerce Department reported Friday that personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.

Consumer spending edged up a modest 0.2 percent, in line with expectations, but far below June’s 0.6 percent rise. When the impact of rising prices was factored in, spending actually dropped by 0.4 percent in July, the weakest showing for inflation-adjusted spending in more than four years.

The July performance for incomes and spending reinforced worries that the economy, which posted better-than-expected growth in the spring because of the rebate checks, could stumble in coming months as their impact fades.

Some economists worry that overall economic growth, which rose at a 3.3 percent annual rate from April-June, could come in at less than half that pace in the current quarter, and could actually dip into negative territory in the final three months of this year and the first quarter of 2009.

Back-to-back declines in the gross domestic product, which measures the value of all goods and services produced within the U.S. and is the best barometer of the country’s economic health, would meet one rule of thumb for a recession.

A gauge of inflation closely watched by the Federal Reserve remained elevated in July, rising by 0.6 percent. Over the past 12 months, this inflation gauge tied to consumer spending was up 4.5 percent, the biggest year-over-year increase in more than 17 years.

The surge reflected the big increases that have occurred this year in food and energy costs. Excluding food and energy, inflation by this measure was up 0.3 percent in July, and 2.4 percent over the past 12 months, still above the Fed’s comfort zone. The central bank is caught in a bind between a sluggish economy and rising inflation pressures.

The 0.7 percent drop in personal incomes followed a 0.1 percent rise in June and a 1.8 percent surge in May. After-tax incomes dropped by an even bigger 1.1 percent in July, following a 1.9 percent decline in June and a 5.7 percent surge in May. All the income figures were heavily influenced by the rebate checks.

Democrats, including presidential nominee Barack Obama, are calling for the government to pass a second stimulus package to guard against the economy slumping into a deep recession.

But President Bush, concerned about the impact the stimulus payments will have on the budget deficit, has resisted those calls, insisting that the rebate payments will continue to support the economy in coming months. The administration is already forecasting that the federal budget deficit for the budget year that begins on Oct. 1 will soar to an all-time high in dollar terms of $482 billion.

The report on consumer spending also showed that personal savings totaled 1.2 percent of after-tax incomes in July, down from a rate of 2.5 percent in June.

Flu shot does not cut risk of death in elderly

Saturday, August 30th, 2008

While influenza vaccination does provide protection against catching the flu, it does not have a major impact on death in the elderly, contrary to what some studies have suggested, a new study suggests.

In prior studies, an impressive 50 percent reduction in death from any cause had been noted in elderly people who got a flu shot, but some researchers were skeptical of this degree of benefit, suggesting that it may have been the result of the “healthy user effect.” The new study supports this line of thinking.

The study included more than 700 elderly people, half of whom had gotten a flu shot and half of whom had not. After controlling for a variety of factors that were largely not considered or simply not available in previous studies, the researchers concluded that any death benefit “if present at all, was very small and statistically non-significant and may simply be a healthy-user artifact that they were unable to identify.”

“The healthy-user effect,” study chief Dr. Sumit Majumdar of the University of Alberta in Edmonton, Canada explained in a statement, “is seen in what doctors often refer to as their ‘good’ patients — patients who are well-informed about their health, who exercise regularly, do not smoke or have quit, drink only in moderation, watch what they eat, come in regularly for health maintenance visits and disease screenings, take their medications exactly as prescribed — and quite religiously get vaccinated each year so as to stay healthy. Such attributes are almost impossible to capture in large scale studies using administrative databases.”

“Over the last two decades in the United Sates, even while (flu) vaccination rates among the elderly have increased from 15 to 65 percent, there has been no commensurate decrease in hospital admissions or all-cause mortality,” added co-investigator Dr. Dean T. Eurich, who is also with the University of Alberta.

“Further, only about 10 percent of winter-time deaths in the United States are attributable to influenza, thus to suggest that the vaccine can reduce 50 percent of deaths from all causes is implausible in our opinion,” he added.

The study involved 352 patients given the vaccine and 352 matched control subjects. Overall, 85 percent of patients were over 64 years of age. Severe pneumonia was seen in 29 percent of patients and 12 percent of the patients died.

Flu vaccination was, in fact, associated with reduced mortality of about 50 percent (8 percent vs. 15 percent mortality in the vaccinated and unvaccinated groups, respectively), and this finding did not change after accounting for age, gender, or co-existing illnesses.

However, after adjusting for other potential confounders, including functional and socioeconomic status, the mortality reduction was weakened and no longer statistically significant.

“Previous studies were likely measuring a benefit not directly attributable to the vaccine itself, but something specific to the individuals who were vaccinated — a healthy-user benefit or frailty bias,” Eurich concluded in a statement.

Stress may raise breast cancer risk in young women

Friday, August 29th, 2008

Young women who experience more than one stressful life event are at greater risk of developing breast cancer, but a general feeling of happiness and optimism may help guard against the disease, Israeli researchers report.

The findings shouldn’t be interpreted to mean that optimism is all you need to prevent breast cancer, Dr. Ronit Peled of Ben-Gurion University of the Negev in Beer Sheva, study’s lead author, told Reuters Health. The best way to protect oneself against the disease is still to eat well, be physically active, and follow screening recommendations, she said in an interview.

Peled and her team investigated the role of severe life events, such as losing a parent before age 20, in breast cancer risk. The breast cancer incidence in Israeli women is among the highest in the world, while stress is also a fact of life for people living in the country, Peled noted.

She and her colleagues recruited 255 women between 25 and 45 years old who had been diagnosed with breast cancer and 367 women of the same age who were free from the disease. They asked the women whether they had experienced any severe life events, such as loss of a spouse or a close relative, as well as events considered to be mild or moderately stressful, such as severe illness, job loss, or separation from a spouse. Women also completed a 15-item questionnaire to evaluate their levels of anxiety, depression and happiness and optimism.

Women who had experienced two or more severe or mild-to-moderate life event were 62 percent more likely to have breast cancer, the researchers found. “This suggests that stressful events do not protect us from the effect of additional events, and even ‘moderate or mild events’ seem to have a cumulative effect,” Peled and her team write in the medical journal BMC Cancer.

Women with breast cancer were statistically more likely to have higher scores for depression and lower score for happiness and optimism.

However, they also found that women with a “general feeling of happiness and optimism” had a 25 percent lower risk of having been diagnosed with breast cancer.

The fact that women with breast cancer were asked about their mood pre-diagnosis but surveyed after they had been diagnosed is one limitation to the study, Peled conceded. However, she added, the number of life events a person experiences can be measured objectively.

Based on these findings, she concludes that “women who suffer severe losses in their young age should be considered as a (breast cancer) risk group and be treated accordingly.”

Mideast running on different clocks at Ramadan

Friday, August 29th, 2008

The start of the holy month of Ramadan next week is causing clock confusion in the Middle East. Egypt and the Palestinians are falling back an hour far earlier than usual, trying to reduce daylight hours for Muslims fasting until sunset in sweltering summer temperatures.

Politics is also adding a twist. The Palestinian militant group Hamas is ending daylight-saving time at midnight Thursday in the Gaza Strip, which it controls — while the West Bank, run by the rival Fatah faction, is waiting until midnight Sunday.

The Palestinians have traditionally changed their clocks at different times from Israel in a gesture of independence. Now for the first time, they’re directing the gesture at each other, reflecting the rival claims for power in the more than year-old split between the Palestinian territories.

“Hamas just wants to show they’re different from the Palestinian government, to pretend that they are the real government here,” said Jamal Zakout, a spokesman for the prime minister of the West Bank-based Palestinian Authority. He said the PA chose midnight Sunday because Ramadan is expected to begin Monday.

Egypt will also move its clocks back one hour at midnight Thursday, a full month earlier than usual. The switch will put Egypt two hours ahead of Greenwich Mean Time and at least an hour later than its Mideast neighbors.

The creeping-up of the clock change reflects the complications of the lunar Islamic calendar.

Ramadan comes around 11 days earlier each year. Currently, that brings it more into the long, hot days of summer, making it particularly tough for Muslims, who abstain from food and drink from sunrise to sunset during the holy month. Even in September, temperatures in Egypt are in the upper 90s.

Egypt’s decision will enable its people to have their “iftar” evening meal, breaking the fast, an hour earlier.

Israel goes off daylight-saving time on Oct. 5, before the Jewish holy day Yom Kippur. It won’t reduce the length of the 25-hour fast, which goes from sunset to sunset, but makes it a bit easier by reducing the number of daytime hours observant Jews must go without food or water.

Jordan and Lebanon will switch the clocks back as usual by the end of October. Syria falls back in late September, while Saudi Arabia and Iraq don’t change clocks.

Ramadan, which commemorates the revelation of the first verses of the Quran to the Prophet Muhammad, begins and ends with the sighting of the new moon. During the month, families and friends gather for sometimes lavish iftar meals, ending with the Eid al-Fitr, a three-day holiday of the breaking of the fast.

Abbas: no to settlement of refugees in Lebanon

Friday, August 29th, 2008

Palestinian President Mahmoud Abbas on Thursday rejected the idea that Palestinian refugees living in Lebanon might be forced to stay there permanently, saying they should have the right to return home.

About 400,000 Palestinian refugees and their descendants live in a dozen refugee camps in Lebanon, which were set up for those who fled or were pushed out during fighting around Israel’s creation in 1948.

Israeli Foreign Minister Tzipi Livni said this week that the “right of return” is incompatible with the creation of a Palestinian state.

On a visit to Beirut, Abbas said, “The refugees should have the right of return to their homeland and we are negotiating this with the Israelis. I have to say we are not with permanent settlement of Palestinian refugees in Lebanon.

“We are against permanent resettlement,” Abbas told reporters after meeting Lebanese President Michel Suleiman. Abbas later met with Prime Minister Fuad Saniora and Parliament Speaker Nabih Berri.

Israel has refused to accept the return of refugees, believing that they should be resettled in a future Palestinian state or the places where they now live. Israel has also offered compensation.

The fate of millions of Palestinian refugees is one of the most difficult issues in Palestinian-Israeli peace talks.

Many Lebanese oppose the permanent settlement of Palestinian refugees in their country, fearing they would tip its delicate sectarian balance.

Abbas also discussed the delicate issue of how to handle armed groups in the camps. The Lebanese military is supposed to stay out of the camps under a 1969 agreement that allows the Palestinians to run them.

But last year, the Lebanese army entered the Palestinian refugee camp of Nahr el-Bared near the northern city of Tripoli to crush an al-Qaida-inspired group that had set up a base there.

Abbas hinted in an interview with Al-Arabiya television that he supported the Lebanese government taking charge of security inside Palestinian refugee camps.

“The camps in Lebanon are part of the Lebanese territories and part of the Lebanese government’s responsibility, regarding security and non-security matters,” Abbas said. “We are ready to cooperate by all means because we do not see ourselves as being in charge of security inside the camps.”

Top Iraqi official detained at Baghdad airport

Friday, August 29th, 2008

U.S. forces arrested a top Shiite official in Iraq’s government as he stepped off a plane in Baghdad, a political ally said Thursday, and a U.S. military intelligence official linked the man to a June bombing that killed four Americans and six Iraqis.

Ali al-Lami’s arrest raised fresh concerns about Iranian and Shiite militia influence in the top ranks of Iraq’s leadership.

Without naming al-Lami, the U.S. military in Iraq said the suspect arrested Wednesday evening is believed to be a senior leader of “special groups” — Iranian-backed militiamen in Iraq.

Al-Lami’s detention could also further discredit attempts by the Shiite-led government to keep top supporters of Saddam Hussein out of senior government jobs. Al-Lami was in charge of that task, as head of a committee that screens former Baath party members.

He and his family were returning to Baghdad from Lebanon, where he underwent medical treatment, when he was arrested at the city’s international airport, said Qaiser Watout, a member of al-Lami’s committee.

U.S. troops were waiting for al-Lami as the plane’s doors opened, Watout said, adding that his family was allowed to proceed. “We condemn this act,” Watout said. “Al-Lami was a moderate official and we are surprised by his arrest.”

The U.S. military confirmed it arrested a senior Shiite figure Wednesday, but would not release the name or say whether it was al-Lami. The military said the man, who was known to travel to Iran and Lebanon, was detained after his plane landed at the airport.

The U.S. military intelligence official in Iraq confirmed al-Lami’s arrest. He said he has received several reports about al-Lami’s alleged involvement in a June 24 bombing.

The official spoke on condition of anonymity because he is not authorized to discuss intelligence information with reporters. He said al-Lami is believed to have information that could lead U.S. officials to others.

The military said the detainee is believed to be behind the June attack that killed 10 people, including two U.S. soldiers and two American civilians, in a district council building in Baghdad’s Shiite slum of Sadr City, the military said.

Iraqi officials have said it appeared to be an inside job and suspicion at the time fell on the headquarters’ Shiite Muslim guard force.

The Iraqi Defense Ministry also said it appeared the Iraqi council members and not the Americans were the main target of the blast, which came ahead of an election to choose a new chairman of the council.

The bombing hit as the U.S. military and civilian officials were stepping up efforts to promote the local administration and restore services in Sadr City and other areas, amid a sharp drop in violence.

Meanwhile, anti-American Shiite cleric Muqtada al-Sadr released a statement saying his largely disbanded Mahdi Army militia would extend its cease-fire “until further notice.”

The statement, which was read by an aide in the Iraqi holy city of Najaf, also warned that any “person who violates” the truce would no longer be considered part of the Mahdi Army.

Al-Sadr’s militia battled U.S. and Iraqi forces for years, but last year he declared a cease-fire. The truce had been extended in six-month increments, but Thursday’s statement indicated it would now be considered open-ended.

Last month, al-Sadr, who lives in Iran but retains significant clout in Iraq, announced he was transforming his militia into a social welfare body with a few guerrilla cells to attack U.S. troops if Washington doesn’t agree to leave Iraq. The announcement followed setbacks in battles with the U.S.-supported Iraqi army in Baghdad, Basra and Amarah.

Separately, the U.S. military said an American soldier died of wounds he received after coming under fire while patrolling northern Baghdad on Wednesday. Another U.S. soldier was killed in a roadside bomb attack while on patrol Thursday in Baghdad, the military said.

Asian alliance rebuffs Russian plea for support

Thursday, August 28th, 2008

China and several Central Asian nations rebuffed Russia’s hopes of international support for its actions in Georgia, issuing a statement Thursday denouncing the use of force and calling for the respect of every country’s territorial integrity.

A joint declaration from the six-member Shanghai Cooperation Organization also offered some support for Russia’s “active role in promoting peace” following a cease-fire, but overall it appeared to increase Moscow’s international isolation.

Russia’s search for support in Asia had raised fears that the alliance would turn the furor over Georgia into a broader confrontation between East and West, pitting the U.S. and Europe against their two main Cold War foes.

Russian President Dmitry Medvedev had appealed to the Asian alliance, which is made up of China, Russia and four ex-Soviet Central Asian nations, for unanimous support of Moscow’s response to Georgia’s “aggression.”

But the alliance, which was created in 2001 to improve regional coordination on terrorism and border security, opted to take a neutral position and urged all sides to resolve the conflict through “peaceful dialogue.”

“The participants … underscore the need for respect of the historical and cultural traditions of each country and each people, and for efforts aimed at preserving the unity of the state and its territorial integrity,” the alliance’s statement said.

None of the other alliance members joined Russia in recognizing the independence claims of Abkhazia and South Ossetia.

Russian Prime Minister Vladimir Putin, in an interview with CNN, accused the U.S. of orchestrating the conflict in Georgia to provide a talking point in the American presidential campaign. The White House press secretary Dana Perino called the claims “patently false.”

Russia’s decision to recognize Georgia’s separatist regions Tuesday sparked another storm of criticism from the West because both provinces make up roughly 20 percent of Georgia’s territory. The West had already criticized Russia for what it calls a disproportionate use of force in fighting this month with Georgia, its small southern neighbor that wants to join NATO.

In Washington, State Department spokesman Robert Wood expressed satisfaction about the Asian group’s statement, saying “it wasn’t what I would call an endorsement of Russia’s recognition of Abkhazia and South Ossetia.”

China has traditionally been wary of endorsing separatists abroad, mindful of its own problems with Tibet and Muslims in the western territory of Xinjiang. The joint statement, which was unanimously endorsed, made a point of stressing the sanctity of borders — two days after Russia sought to redraw Georgia’s territory.

The Asian alliance’s statement offered some praise of Moscow’s actions, at least in the context of the peace deal signed five days after the war began Aug. 7. The alliance said it supports “the active role of Russia in promoting peace and cooperation in the given region.”

The four Central Asian members of the group — Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan — all seemed reluctant to damage their relations with Europe and the U.S.

Kazakhstan enjoys significant Western investment in its rich hydrocarbon sector, and impoverished Kyrgyzstan earns $150 million in aid and rent for hosting a U.S. air base that supports military operations in Afghanistan.

The alliance conducts joint military exercises and aspires to become a counterweight to NATO. In 2005, its members called for a timetable for U.S. forces to leave Central Asian bases the U.S. uses to support operations in Afghanistan.

Despite continuing Western protests and a visit by U.S. warships to Georgia’s Black Sea coast, Russian troops remain at checkpoints inside areas controlled by Georgia prior to the recent conflict.

While a cease-fire agreement calls for both sides to withdraw to their previous positions, the Kremlin says the agreement allows Russian forces to occupy “security zones” outside the rebel regions.

In a rare gesture of conciliation, Russian forces turned over 12 Georgian soldiers on the border of Abkhazia. The Georgians were seized Aug. 18 and paraded — blindfolded and hands tied behind their backs_ on top of Russian armored vehicles.

The soldiers appeared unharmed Thursday, and some were smiling.

But there was also new conflict in the region. South Ossetia claimed to have shot down an unmanned Georgian spy plane that was scouting the skies over the republic. Georgia denied the report and its parliament later urged the country’s leadership to break off diplomatic relations with Russia, calling it an “aggressor country.”

Russia responded to Georgia’s military offensive on South Ossetia by sending hundreds of tanks rolling into the rebel region, pushing Georgian troops out of South Ossetia’s capital, Tskhinvali, before driving deep into Georgia proper.

The West accuses Russia of excessive force in response to the Georgian offensive, of failing to meet its troop withdrawal commitments under an EU-brokered cease-fire and of violating international law in recognizing the two separatist regions.

In Vienna, Georgian Foreign Minister Eka Tkeshelashvili said Russian forces and their armed allies have driven all Georgians out of South Ossetia and Abkhazia and were now ethnically cleansing villages in other areas of Georgia. Russia denied the charge.