BAE Sells 3 Offshore Patrol Vessels to Brazilian Navy

BAE Systems has sold three already built offshore patrol vessels (OPV) to Brazil as the first part of a deal that also involves a manufacturing license for at least five more warships built locally.

The vessels were originally built for the Trinidad & Tobago government, but that deal was terminated in 2010 when the Caribbean nation refused to take possession of the OPVs due to late delivery. The two sides are currently in arbitration.

The three vessels will cost the Brazilian Navy 120 million pounds ($186 million U.S.) with a further 13 million pounds being allocated for training and support by BAE.

The first two 90-meter vessels are scheduled to be reactivated and handed over in June and December of this year, with the final warship being delivered in 2013.

The deal also has BAE handing over a manufacturing license to the Brazilian Navy for the local construction of at least five more OPVs.

A BAE spokeswoman said the local shipyard will be nominated by the Brazilian Navy.

The warships weigh 2,200 tons fully loaded, are armed with 30mm and 25mm cannons, and have a helicopter flight deck.

The OPVs are part of a major program, known as Prosuper, aimed at expanding Brazilian naval capabilities. Competitions to supply frigates and a logistics ship are ongoing.

A British offer to sell redundant Royal Navy Type 22 frigates as a short-term measure was rejected by Brazil last year.

A submarine fleet is already being built with French assistance

F 35 is useless

Japan Developing Cyber Weapon

TOKYO: Japan has been developing a virus that could track down the source of a cyber attack and neutralise its programme, the daily Yomiuri Shimbun reported Sunday. The weapon is the culmination of a 179 million yen ($2.3 million) three-year project entrusted by the government to technology maker Fujitsu Ltd to develop a virus and equipment to monitor and analyse attacks, the daily said. The United States and China are reported to have put so-called cyber weapons into practical use, Yomiuri said. Japan will have to make legal amendments to use a cyber weapon as it could violate the country's law against the manufacture of a computer virus, the daily said. In November a computer system run by about 200 Japanese local governments was struck. In October, Japan's parliament came under cyber attack, apparently from the same emails linked to a China-based server that have already hit several lawmakers' computers. It was also reported that Japanese computers at embassies and consulates in nine countries were infected with viruses in the summer. Currently, the virus is being tested in a "closed environment" to examine its applicable patterns. (AFP)

India's PM Worried by Budget Deficit

NEW DELHI - India's Prime Minister Manmohan Singh said in his New Year's message to the nation Dec. 31 that controlling the government's budget deficit was a priority for 2012 to avert another crisis.

In a lengthy address from the beleaguered premier, whose cabinet has suffered from corruption scandals and policy setbacks this year, Singh laid out his vision for the next 12 months.

"I am concerned about fiscal stability in the future because our fiscal deficit has worsened in the past three years," Singh said in a statement sent to AFP.

After heavy borrowings over the last three years to fund a stimulus package to counter the effects of the 2008 global financial crisis, he accepted the budget now needed to be rebalanced with new taxes and cuts to subsidies.

"We have run out of fiscal space and must once again begin the process of fiscal consolidation," he said.

Recalling the country's financial crisis in the 1990s, he added: "This is important to ensure that our growth process is not jeopardized and, equally important, our national sovereignty and self respect are not endangered."

He said the government "must ensure that the country does not go down that road once again", referring to the 1991 bailout of the country by the International Monetary Fund.

The Indian economy has hit headwinds in the last six months, with high inflation coupled with sharply lower growth forecast to be 7.0 percent by economists for this financial year - low by recent standards.

The rupee has also fallen sharply this year and is at record lows against the dollar.

Singh also stressed the importance of the expensive task of modernizing India's defense forces, something he described as "my most important task as prime minister.

"India's economic and energy security require this," he said.

Maliki Declares 'Iraq Day' to Mark U.S. Pullout

BAGHDAD - Prime Minister Nuri al-Maliki declared "Iraq Day" on Dec. 31 to mark the end of a pact allowing U.S. forces to stay in the country, two weeks after they left and with Iraq mired in a political row.

IRAQI PRIME MINISTER Nuri al-Maliki delivers a speech Dec. 31 during a ceremony at Al-Shaab stadium complex in central Baghdad. Maliki declared 'Iraq Day' to mark the withdrawal of U.S. forces. (Ali Al-Saadi / AFP via Getty Images)

Maliki called for Iraqis to unite, and said the country's days of dictatorship and one-party rule were behind it, even as rival politicians have accused him of centralizing decision-making power.

Speaking at a ceremony attended by several ministers and top security officials at the Al-Shaab stadium complex in central Baghdad, Maliki said Dec. 31 was "a feast for all Iraqis" and marked "the day Iraq became sovereign".

"I announce today, the 31st of December, which witnessed the completion of the withdrawal of U.S. forces, to be a national day," Maliki said. "We call it Iraq Day."

"Today, you are raising the Iraqi flag across the nation, and unifying under that flag. Today, Iraq becomes free and you are the masters."

He continued: "The withdrawal of U.S. forces from Iraq returns the country to normality. That makes targeting civilians, police, the army and other security forces, or carrying out any sabotage against infrastructure a huge betrayal, and that puts those who commit these acts in the corner of the enemy."

U.S. troops completed their withdrawal from Iraq on Dec. 18, nearly nine years after Washington launched a controversial war to oust dictator Saddam Hussein.

At their peak, American forces in Iraq numbered nearly 170,000 and had as many as 505 bases. Now, just 157 remain, under the authority of the embassy, to train Iraqi forces to use equipment purchased from the United States.

In 2008, Baghdad and Washington signed a deal which called for all U.S. soldiers to leave Iraq by the end of 2011.

Efforts to keep a significant American military training mission beyond year-end fell through when the two sides failed to agree on a deal to guarantee U.S. troops immunity from prosecution.

The Iraqi premier also told his countrymen that they should "be totally confident that Iraq has rid itself forever of dictatorship and the rule of one party, one sect, and one ruler."

Maliki's remarks came amid a festering political standoff in Iraq, with authorities having charged Sunni Vice President Tareq al-Hashemi with running a death squad and Maliki calling for Sunni Deputy Prime Minister Saleh al-Mutlak to be fired.

Mutlak and Hashemi's Sunni-backed Iraqiya party has boycotted parliament and cabinet meetings. Hashemi, who is holed up in the autonomous Kurdish region, rejects the accusations, while Mutlak has decried the Shiite-led government as a dictatorship.

The support of Iraqiya - which narrowly won a 2010 poll and garnered most of its seats in Sunni areas, is seen as vital to preventing a resurgence of violence.

The Sunni Arab minority dominated Saddam's regime and was the bedrock of the anti-U.S. insurgency after the 2003 invasion.

Iran Keeps Tensions High Over Oil Strait

TEHRAN - Iran kept tensions simmering Dec. 31 over its threat to close the Strait of Hormuz to oil tankers by readying war game missile tests near the entrance to the Persian Gulf.

AN IRANIAN WAR-BOAT fires a missile Dec. 30 during the 'Velayat-90' navy exercises in the Strait of Hormuz. (Ali Mohammadi / AFP via Getty Images)

Washington has warned a closure of the strait "will not be tolerated" after Iranian Vice President Reza Rahimi's threat this week that "not a drop of oil" will pass through the channel if more Western sanctions are imposed over Tehran's nuclear program.

Iran has brushed off the warning from the United States, which bases its Fifth Fleet in the Gulf, with Iranian navy chief Adm. Habibollah Sayari saying it would be "really easy" to close the strait.

A spokesman for the Iranian navy, Commodore Mahmoud Mousavi, told state television on Dec. 31 that, "in the next days, we will test-fire all kinds of surface-to-sea, sea-to-sea and surface-to-air as well as shoulder-launched missiles" in the final stages of the war games.

He did not say exactly when the launches would start, but explained they would involve tests of "medium- and long-range missiles" to evaluate their operational effectiveness.

The navy exercises started Dec. 24 and are due to end on Jan. 2.

Twenty percent of the world's oil moves through the Strait of Hormuz, at the entrance of the Gulf, making it the "most important chokepoint" globally, according to information released Dec. 30 by the U.S. Energy Information Administration.

Around 14 crude oil tankers per day pass through the narrow strait, carrying a total 17 million barrels. In all, 35 percent of all seaborne oil transited through there this year.

On Dec. 29, a U.S. aircraft carrier and an accompanying missile cruiser passed through the zone where the Iranian navy was conducting its drill. U.S. officials insisted it was a routine passage.

No confrontation occurred, though an Iranian military aircraft flew in close to record video of the aircraft carrier, which was then shown on state television.

Analysts and oil market traders have been watching developments in and around the Strait of Hormuz carefully, fearing that the intensifying war of words between arch foes Tehran and Washington could spark open confrontation.

With tensions rising, the United States said it has signed a $29.4-billion dealto supply Iran's chief rival in the Middle East, Saudi Arabia, with 84 new fighter jets.

The sale was a "strong message" to the Gulf region, Washington said.

Iran is subject to four rounds of U.N. sanctions over its nuclear program, which many Western countries allege is being used to develop atomic weapons.

Tehran denies the allegation.

The United States and its allies have also imposed unilateral sanctions on Iran's economy.

The last lot of unilateral sanctions triggered a demonstration in Tehran that led to members of the Basij militia controlled by the Revolutionary Guards ransacking the British embassy. London reacted by closing the mission and ordering Iran's embassy in Britain closed.

More sanctions are on the way.

U.S. President Barack Obama is expected to soon sign into law additional restrictions on Iran's central bank, which acts as the main conduit for Iranian oil sales.

The European Union is considering other measures that could include an EU embargo on Iranian oil imports, with foreign ministers to meet on the issue in a month's time.

Iran's oil minister, Rostam Qasemi, told the Aseman weekly that sanctions "will drive up the price of oil to at least 200 dollar" per barrel.

Iran's top nuclear negotiator, Saeed Jalili, was quoted by the Iranian media telling Islamic republic's envoys who have been gathered in Tehran that "we will give a resounding and many-pronged response to any threat against the Islamic Republic of Iran."

But he and other officials also left the door open to resuming long-stalled talks on Iran's nuclear program.

Addressing world powers involved in the talks, Jalili said: "We officially told them to come back to the negotiation based on cooperation."

Iran's ambassador to Germany, Alireza Sheikh-Attar, told the Mehr news agency on Dec. 31 that "we will soon send a letter, after which (new) talks will be scheduled."

Foreign Minister Ali Akbar Salehi was also quoted by a website of the state broadcaster as telling a visiting Chinese foreign ministry official that "Iran is prepared for the continuation of nuclear negotiations" on the basis of a Russian proposal.

Lockheed Wins Contract for UAE Anti-Missile System

Washington - The Pentagon awarded U.S. defense giant Lockheed Martin Corp. with a $1.96 billion contract Dec. 30 to supply the United Arab Emirates with a missile defense system.

Under the contract, Lockheed will deliver two Terminal High Altitude Area Defense or Thaad systems that include radar, interceptors and launchers, according to a Pentagon statement.

The project is part of President Barack Obama's plans to build up a regional defense in the Middle East to counter Iran's growing arsenal of ballistic missiles.

Under the plan, land-based interceptors would be tied in with a detection network on U.S. Navy Aegis-class warships.

UAE is the first country to purchase the expensive Thaad system.

The announcement came amid rising tensions with Iran and a day after the United States confirmed the signing of a $30 billion arms deal to provide another Gulf ally - Saudi Arabia - with 84 new fighter jets.