Backward step for reform in Myanmar?

Myanmar's military has stepped up attacks on ethnic Kachin rebels in recent days with airstrikes. This move calls into question efforts by the United States and other international powers to richly and quickly reward the nominally civilian regime there for a series of gestures toward political reform.
US State Department spokesman Victoria Nuland told reporters yesterday that the Obama administration is "deeply troubled" by increased violence and urged dialogue between Myanmar's government and the Kachin Independence Organization, the political wing of the Kachin Independence Army, which has been in an on again, off again, war against the central state for decades.
Simon Roughneen wrote for the Monitor yesterday that "the Myanmar Army offensive – which includes helicopter gunships and aerial bombardment – comes after weeks of heavy fighting at outposts about 10 miles outside the KIA headquarters on the Myanmar-China frontier." He then quoted Joseph Nbwi Naw, a Kachin Catholic priest in the KIA headquarters town of Laiza as saying "the situation is very tense. The bombers are bombing just about four or five miles from the town here."
Myanmar (also known as Burma) is as ethnically complex a country as they come, and while most in the West have focused on the democracy struggle of Aung San Suu Kyi and her National League for Democracy, there is no guarantee that any new order that emerges from a political promise, with promised free elections scheduled for 2015, will create stability or justice for its minorities. Ms. Aung San Suu Kyi, an ethnic Burman like most of the junta that kept Myanmar under military rule from 1962 until 2011, has been mostly silent on violence targeting the ethnic Muslim Rohingyas recently and does not appear to have spoken out on the situation involving the Kachin.
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In September, the Irrawady, a Thailand-based news organization that focuses on Myanmar, reported that Aung San Suu Kyi argued against taking a strong stand, as it could make the situation worse. "There are people who criticized me when I remained [silent] on this case," she told a Burmese group on a visit to New York. "They can do so as they are not satisfied with me. But, for me, I do not want to add fire to any side of the conflict." The Irrawady wrote: "Some critics have condemned [Aung San Suu Kyi] for staying silent on Kachin as well as the sectarian violence between Arakanese Buddhists and Rohingya Muslims in western Burma."
In early November, I wrote about doubts over the wisdom of America's breakneck pace of normalization with Myanmar, with President Obama becoming the first US leader to ever visit the country that month.
Has there ever been faster restoration of US relations with a country it had once worked so hard to isolate, in the absence of either a US invasion or a revolution? I can't think of one. The once-maligned leaders are being brought in from the cold. The US even indicated in October that Burmese officers would be invited to the annual Cobra Gold military exercise between the US and Thailand as official observers.
The Obama administration's motivations are clear: Demonstrate the benefits of the generals’ political opening and turn toward democracy. But with the breathless rush to friendship comes a country where ethnic tensions still dominate, and ethnic violence, specifically against ethnic Rohingya Muslims, that the generals have been either unwilling or unable to stop.
... If all goes well, the Obama administration’s overture toward Myanmar will go down as a major foreign policy achievement, and more importantly signal a brighter future for Myanmar’s 48 million people. But there are challenges and pitfalls ahead, and with each concession the US and other major powers make before 2015, a potential carrot to offer for positive change is spent.
Hopefully, Obama will not have gone to Myanmar too soon.
The recent war with the Kachin is evidence of how hard it has been to build on the fruits of "dialogue" between Myanmar and armed ethnic-minorities. A 17-year cease-fire between the Kachin rebels, in northeastern Myanmar along the Chinese border, broke in June of 2011, and the results have been catastrophic. Human Rights Watch estimated that 75,000 Kachin were displaced from their homes in the fighting, recording the razing of homes, stealing of property, torture of Kachin civilians, use of civilians as slave labor, and the rape of Kachin women, all by Myanmar soldiers.
Such events have been frequent for Myanmar's ethnic minorities since shortly after independence from Britain in 1948. In February 1947, nationalist hero Aung San, the father of Aung San Suu Kyi, and other nationalist leaders signed the Panglong agreement with ethnic minorities, who today make up about 40 percent of the national population. The agreement envisioned Myanmar as a federal state, with regional autonomy for ethnic minority states like Kachin, where the residents are mostly Christian and speak a language distinct from the ethnic-majority Burmans, who are mostly Buddhist.
But autonomy was never delivered, and when Aung San and six members of his cabinet were assassinated in July 1947, the stage was set for decades of conflict not just with the Kachin but other ethnic minorities like the Shan and the Wa, many living in the rugged mountains in eastern and northern Burma.
For now, the elections of 2015 are a long way away, and whether those elections will lead to a more just approach to ethnic minorities remains an open question. That Aung San Suu Kyi has suffered personally and for decades for her principled stand on democracy for Myanmar is no guarantee that she or anyone else who may come to power there will handle the country's ethnic tensions any better than their predecessors have for the past 60 years.
Holding some diplomatic and sanctions pressure in the back pocket may prove a wiser course than declaring a democracy victory in early 2013.
Read More..

US drone strike in Pakistan kills influential Taliban commander

Key Pakistani Taliban commander Maulvi Nazir – considered a "good" Taliban by some among the Pakistani military – died in a US drone strike that left at least six dead on Thursday, according to local reports.
According to Pakistan's Dawn newspaper, Taliban and local government officials confirm that Mr. Nazir and at least two of his deputies were killed when a US drone hit their vehicle in South Waziristan, a Pakistani tribal region along the Afghan border. The commander's truck had reportedly broken down at the time.
The Guardian notes that neither the Pakistani government nor the Taliban has made an official statement on the reports, and that details remain murky.
Because journalists are usually prevented by militants from visiting places hit by drones, the exact details of what happened and who was killed in such attacks are often extremely hard to verify.
Residents and an intelligence official in South Waziristan who spoke to a local journalist said the total number of people killed in the first attack was either six or 10. The intelligence source said all the men killed were "top leaders" of the Mullah Nazir group, the leading militant group in South Waziristan.
Recommended: How much do you know about Pakistan? Take this quiz.
Maulvi Nazir was the primary militant commander in South Waziristan and a key figure in Pakistan's Taliban, having maintained a complex set of relationships among the region's players.
Unlike some of Pakistan's domestic militants, Nazir chose to focus his efforts fully on Afghanistan and the NATO and US forces stationed there, and according to the US “had a clear collaboration” with Afghanistan's powerful Haqqani network, a primary foe of US and NATO troops in Afghanistan. The Washington Post notes that he was accused of regularly sending troops into Afghanistan to fight alongside the country's own Taliban against the US-led forces there.
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His Afghan focus on targeting foreign troops earned him a reputation with parts of the Pakistani military as a "good" Taliban, and he negotiated a deal with the Islamabad to stay out of its battle with domestic militants in the region. His militants have also aided Pakistani troops in attacking members of Tehrik-e-Taliban Pakistan (TTP), an anti-Islamabad faction of the Taliban.
But that also earned him the hostility of some of his domestic Taliban peers. Nazir was wounded in November during a suicide attack on his convoy. Rival Taliban commanders were believed to have been behind the attack, which was said to have caused some fracturing of the Pakistani Taliban in the region.
Security analyst Imtiaz Gul told the Guardian that Nazir's death will likely be welcomed by both the US and Pakistan – despite the latter's peace deal with the late militant.
"Both the US and Pakistan will be happy because they now have one less enemy," he said. "Although he was in an undeclared peace deal with the government, he was also subverting the stated goals of that agreement by providing support and shelter to al-Qaida people whose leaders have pleaded with the rank and file of the Pakistani army to rebel against the state."
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Russia plans biggest war games since Soviet era

The Russian navy has announced that it will hold its biggest war games since Soviet times in the Mediterranean and Black seas later this month.
The ambitious exercises, which will involve ships from all four major Russian fleets, are a sign of growing confidence on the part of Russia's military as it begins to enjoy the benefits of President Vladimir Putin's huge budget allocations for renewing and re-equipping all branches of the armed forces.
The purpose of the war games will be to strengthen integration between different types of forces and gain practice with major military deployments outside Russia's immediate neighborhood, the Defense Ministry said in a statement Tuesday.
Do you know anything about Russia? A quiz.
As part of the maneuvers, naval ships will arrive at an "unprepared" coast in the Russian northern Caucasus region to take amphibious troops onto transport vessels.
"The primary goal of the exercise is to train issues regarding formation of a battle group consisting of troops of different branches outside of the Russian Federation, planning its deployment and managing a coordinated action of a joint Navy group in accordance with a common plan," the ministry's statement said.
The participating ships, it said, will be drawn from all of Russia's four major naval formations: the Northern, Baltic, Pacific, and Black Sea fleets.
Some experts suggest the war games may be cover for an increasingly nervous Moscow's preparations to evacuate Russian citizens and their dependents from war-torn Syria.
About 9,000 Russians are registered with the Russian embassy in Damascus, but some experts say the full number may be 30,000 or more. Over the nearly half a century that Moscow has enjoyed good relations with Syria, thousands of Russian women have married Syrian men and moved to the country. Many of them may urgently demand to return with their children to Russia if the situation turns critical.
This week the Russian navy refreshed a fleet, including several huge amphibious assault ships capable of carrying thousands of people, which it had deployed to the eastern Mediterranean last summer.
Experts say the replacement fleet dispatched this week is of similar makeup, with at least five huge troop-transport ships at its core.
As part of Russia's 8-year, $659-billion rearmament program, the navy is slated to receive 50 new warships by 2016, including new Borey-class nuclear-powered ballistic-missile submarines – the third of which entered service last weekend – 18 major surface warships, and dozens of special purpose and support vessels.
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Gerard Depardieu's latest drama: a Russian passport

Vladimir Putin flourished his pen Thursday morning and signed what must be the oddest decree of his long years in power: an order granting a Russian passport to French actor and tax exile Gerard Depardieu.
A terse announcement posted on the Kremlin website noted that Mr. Putin acted "to satisfy an application for citizenship of the Russian Federation by Gerard Xavier Depardieu, who was born in 1948 in France."
Mr. Depardieu, star of over 170 films and possessing what is often politely referred to as a "colorful" public personality, has been locked in a high profile battle with France's new socialist government over an emergency tax that would levy a 75 percent rate on people earning more than $1.3 million. He recently renounced his French citizenship and took up residence in Belgium, which offers a friendlier tax regime for the super-rich.
Recommended: Vladimir Putin 101: A quiz about Russia's president
France's high court struck down the law last week as "unconstitutional," but the government announced it will soon reintroduce the measure after taking the court's concerns into account.
It's not clear whether Depardieu actually applied for residence in Russia, which has a 13 percent flat income tax for all, but in a far-ranging press conference last month Putin declared "If Gérard really wants to have a residence permit or a Russian passport, you can consider it done, the issue solved positively."
Putin also said that he has long enjoyed "kind, friendly, personal relations" with the French actor.
COME TO CHECHNYA
Depardieu is no stranger to Russia. He has appeared in several ad campaigns and filmed the 2011 movie Rasputin in St. Petersburg. He is also rumored to be close to Chechen strongman Ramzan Kadyrov, and was guest of honor at the pro-Kremlin leader's birthday party in Grozny last October.
Mr. Kadyrov has said that he would happily invite Depardieu to come and live permanently in Chechnya if he wanted to. "If the country's leadership decides in favor of granting Depardieu Russian citizenship, we will be glad to create deserved conditions for the great cultural figure in our republic," Kadyrov said last week.
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Russia's blogosphere erupted in derision and sarcastic comment Thursday, with some people writing painfully of their own troubles with Russia's notoriously bureaucratic passport department.
One man posted on Facebook his own tale of trying for years to repatriate his own Russian-born elderly mother from next-door Belarus, but he has so far failed to move Russian authorities because her Belarussian documents show a slightly different spelling of her name than appears on her Russian birth certificate.
PART OF SPAT WITH WEST?
Sergei Strokan, a foreign affairs columnist with the liberal Moscow daily Kommersant, says the granting of citizenship to Depardieu should be seen in context with the escalating war of words between Russia and the West. Last month President Barack Obama signed the Magnitsky Act, which aims to punish corrupt Russian officials, and Moscow responded by enacting the Dima Yakovlev Act, whose main feature is a ban on US citizens adopting Russian orphans.
"Russia is very much on the defensive right now. The vindictive nature of Russia's adoption ban has shocked not only the US, but also many in Europe and here in Russia as well," Mr. Strokan says.
"We seem to be entering into a cold war-like battle of images, in which Russia is trying to show that it offers a better life, has higher ideals, and is more friendly to humanity than the West.... So this may be seen as a calculated PR move, an effort to demonstrate that we understand and care for the beloved French actor more than his own homeland does," he adds.
"I can't imagine that Depardieu would actually want to live here and experience the life of Russians, though. Let's see how it goes the first time he attempts to travel with that new Russian passport.
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Backward step for reform in Myanmar?

Myanmar's military has stepped up attacks on ethnic Kachin rebels in recent days with airstrikes. This move calls into question efforts by the United States and other international powers to richly and quickly reward the nominally civilian regime there for a series of gestures toward political reform.
US State Department spokesman Victoria Nuland told reporters yesterday that the Obama administration is "deeply troubled" by increased violence and urged dialogue between Myanmar's government and the Kachin Independence Organization, the political wing of the Kachin Independence Army, which has been in an on again, off again, war against the central state for decades.
Simon Roughneen wrote for the Monitor yesterday that "the Myanmar Army offensive – which includes helicopter gunships and aerial bombardment – comes after weeks of heavy fighting at outposts about 10 miles outside the KIA headquarters on the Myanmar-China frontier." He then quoted Joseph Nbwi Naw, a Kachin Catholic priest in the KIA headquarters town of Laiza as saying "the situation is very tense. The bombers are bombing just about four or five miles from the town here."
Myanmar (also known as Burma) is as ethnically complex a country as they come, and while most in the West have focused on the democracy struggle of Aung San Suu Kyi and her National League for Democracy, there is no guarantee that any new order that emerges from a political promise, with promised free elections scheduled for 2015, will create stability or justice for its minorities. Ms. Aung San Suu Kyi, an ethnic Burman like most of the junta that kept Myanmar under military rule from 1962 until 2011, has been mostly silent on violence targeting the ethnic Muslim Rohingyas recently and does not appear to have spoken out on the situation involving the Kachin.
Get our FREE 2013 Global Security Forecast now
In September, the Irrawady, a Thailand-based news organization that focuses on Myanmar, reported that Aung San Suu Kyi argued against taking a strong stand, as it could make the situation worse. "There are people who criticized me when I remained [silent] on this case," she told a Burmese group on a visit to New York. "They can do so as they are not satisfied with me. But, for me, I do not want to add fire to any side of the conflict." The Irrawady wrote: "Some critics have condemned [Aung San Suu Kyi] for staying silent on Kachin as well as the sectarian violence between Arakanese Buddhists and Rohingya Muslims in western Burma."
In early November, I wrote about doubts over the wisdom of America's breakneck pace of normalization with Myanmar, with President Obama becoming the first US leader to ever visit the country that month.
Has there ever been faster restoration of US relations with a country it had once worked so hard to isolate, in the absence of either a US invasion or a revolution? I can't think of one. The once-maligned leaders are being brought in from the cold. The US even indicated in October that Burmese officers would be invited to the annual Cobra Gold military exercise between the US and Thailand as official observers.
The Obama administration's motivations are clear: Demonstrate the benefits of the generals’ political opening and turn toward democracy. But with the breathless rush to friendship comes a country where ethnic tensions still dominate, and ethnic violence, specifically against ethnic Rohingya Muslims, that the generals have been either unwilling or unable to stop.
... If all goes well, the Obama administration’s overture toward Myanmar will go down as a major foreign policy achievement, and more importantly signal a brighter future for Myanmar’s 48 million people. But there are challenges and pitfalls ahead, and with each concession the US and other major powers make before 2015, a potential carrot to offer for positive change is spent.
Hopefully, Obama will not have gone to Myanmar too soon.
The recent war with the Kachin is evidence of how hard it has been to build on the fruits of "dialogue" between Myanmar and armed ethnic-minorities. A 17-year cease-fire between the Kachin rebels, in northeastern Myanmar along the Chinese border, broke in June of 2011, and the results have been catastrophic. Human Rights Watch estimated that 75,000 Kachin were displaced from their homes in the fighting, recording the razing of homes, stealing of property, torture of Kachin civilians, use of civilians as slave labor, and the rape of Kachin women, all by Myanmar soldiers.
Such events have been frequent for Myanmar's ethnic minorities since shortly after independence from Britain in 1948. In February 1947, nationalist hero Aung San, the father of Aung San Suu Kyi, and other nationalist leaders signed the Panglong agreement with ethnic minorities, who today make up about 40 percent of the national population. The agreement envisioned Myanmar as a federal state, with regional autonomy for ethnic minority states like Kachin, where the residents are mostly Christian and speak a language distinct from the ethnic-majority Burmans, who are mostly Buddhist.
But autonomy was never delivered, and when Aung San and six members of his cabinet were assassinated in July 1947, the stage was set for decades of conflict not just with the Kachin but other ethnic minorities like the Shan and the Wa, many living in the rugged mountains in eastern and northern Burma.
For now, the elections of 2015 are a long way away, and whether those elections will lead to a more just approach to ethnic minorities remains an open question. That Aung San Suu Kyi has suffered personally and for decades for her principled stand on democracy for Myanmar is no guarantee that she or anyone else who may come to power there will handle the country's ethnic tensions any better than their predecessors have for the past 60 years.
Holding some diplomatic and sanctions pressure in the back pocket may prove a wiser course than declaring a democracy victory in early 2013.
Read More..

Fed minutes short-circuit Wall Street rally

NEW YORK (Reuters) - Stocks dipped on Thursday after signs the Federal Reserve has growing concern about its highly stimulative monetary policy, giving investors reason to pull back after a two-day rally.
The minutes from the Fed's December policy meeting, released on Thursday, showed increasing reticence about adding to the central bank's $2.9 trillion balance sheet, which it expanded sharply in response to the financial crisis and recession of 2007-2009.
Some policymakers thought asset buying should be slowed or stopped before the end of 2013 while others highlighted the need for further stimulus. The Fed's policy of easy credit has helped push the S&P 500 to a 13.4 percent gain in 2012. Ending that policy would remove an incentive for investors to purchase riskier assets like stocks.
"The surprise was the changes to duration and extent of that program in 2013, but given the tone in previous Fed meeting minutes, it should not have been an entire surprise," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
Despite the concerns about the effects of its asset purchases, the Fed look set to continue its open-ended stimulus program for now.
Stocks pushed the S&P 500 index 4.3 percent higher in the previous two sessions. On Thursday investors turned their focus to coming battles in Congress, including the likelihood of bitter fights over budget cuts and raising the federal debt ceiling.
"We were definitely technically extended and ripe for a little bit of a consolidation and today is very orderly - traders and investors are still trying to digest the language and the details from the 2012 taxpayer act," Dickson said.
The Dow Jones industrial average <.dji> dropped 21.19 points, or 0.16 percent, to 13,391.36. The Standard & Poor's 500 Index <.spx> shed 3.05 points, or 0.21 percent, to 1,459.37. The Nasdaq Composite Index <.ixic> lost 11.70 points, or 0.38 percent, to 3,100.57.
Economic data showed U.S. private-sector employers shrugged off a looming budget crisis and stepped up hiring in December, offering further evidence of underlying strength in the economy as 2012 ended.
The government's broader monthly payrolls report, due on Friday, is expected to show the economy created 150,000 jobs compared with 146,000 in November, according to a Reuters poll. The U.S. unemployment rate is seen holding steady at 7.7 percent.
Retailers advanced after several major companies in the sector beat expectations of modest sales increases in December, with the S&P retail index <.spxrt> up 0.4 percent.
Shares in Costco Wholesale Corp rose 1 percent to $102.49 after the company reported a better-than-expected 9 percent rise in December sales at stores open at least a year.
Gap Inc stock climbed 2.3 percent to $32.09 following news that the retailer will buy women's fashion boutique Intermix Inc, the Wall Street Journal reported.
Family Dollar Stores Inc stumbled 13 percent to $55.74 on the company's report of lower-than-expected quarterly profit.
Volume was relatively strong, with about 6.68 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly above the 2012 daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by 1,692 to 1,321, while on the Nasdaq, decliners beat advancers 1,287 to 1,187.
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Hong Kong shares may trim strong 2013 start after Fed voices concern

HONG KONG, Jan 4 (Reuters) - Hong Kong shares could end a
two-day rally on Friday, tracking Wall Street weakness after
signs that the U.S. Federal Reserve has growing concerns about
its stimulative monetary policy.
Any losses could be limited if mainland China markets reopen
strongly on Friday, trading for the first day in 2013 after a
three-day New Year holiday.
On Thursday, the Hang Seng Index ended up 0.4 percent
at 23,398.6, its highest since June 1, 2011. The China
Enterprises Index of the top Chinese listings in Hong
Kong added 0.8 percent, reaching another peak since August 2011.
On the week, the indexes are up 3.2 and 5.5 percent,
respectively. The H-share index's relative strength index (RSI)
value suggests that it is now at its most overbought since
October 2010.
Elsewhere in Asia, Japan's Nikkei is up 3 percent in
its first trading session for the year, while South Korea's
KOSPI is down 0.4 percent at 0042 GMT.
FACTORS TO WATCH:
* Consolidation of Austria's cutthroat telecom market moved
ahead on Thursday when Hutchison Whampoa Ltd completed
its 1.3 billion euro ($1.7 billion) takeover of Orange Austria,
making it the country's third-biggest mobile operator.
* Hong Kong's Li & Fung Group agreed to acquire a
majority stake in South Korean children's apparel maker Suhyang
Networks for roughly 200 billion won ($188 million), a South
Korean newspaper reported on Thursday.
* Hong Kong November 2012 retail sales rose 9.5 percent from
a year earlier.
* Bestway International Holdings Ltd has cancelled
part of its mining area in Mongolia due to the implementation of
new regulations.
* Chinese property developer Kaisa Group Holdings Ltd
has issued $500 million in senior notes due 2020
bearing an interest rate of 10.25 percent per annum.
* Chinese property developer Country Garden has
issued $750 million senior notes due 2023 with an interest rate
Read More..

Asia stocks eke out gains on China hopes, oil eases

HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China, although oil gave back part of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.
The MSCI Asia Pacific ex-Japan index of stocks rose 0.2 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff".
Data from China showing the services sector expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares over the past month.
The China Enterprises index which rallied more than 4 percent in the previous session eased 0.2 percent. Onshore Chinese markets will resume trading on Friday.
"China looks like it's improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.
"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace."
Australian stocks rose 0.7 percent to their highest in more than 19 months, with mining giants Rio Tinto up 2.4 percent and BHP Billiton up 0.8 percent, among the top gainers on the benchmark S&P ASX/200 index.
South Korea's Kospi underperformed the region, falling 0.4 percent as automakers and other exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.
In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.
"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.
The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.
The U.S. dollar rose 0.2 percent against a basket of major currencies.
President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought deal averted the fiscal cliff of automatic tightening that threatened to push the U.S. into recession.
Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping 0.3 percent and U.S crude futures down 19 cents to $92.93.
"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."
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South African rand weakens in muted trade

JOHANNESBURG (Reuters) - South Africa's rand softened against the dollar on Thursday in thin post-holiday trade, underperforming many emerging market currencies.
The rand was at 8.5168 to the dollar at 0651 GMT, 0.3 percent weaker than Wednesday's New York close, making it one of the worst performers in a basket of 20 emerging market currencies monitored by Reuters.
It had reached a 3-month high of 8.42 to the dollar early on Wednesday, lifted by U.S. lawmakers reaching a deal to avoid a "fiscal cliff" of tax increases and spending cuts that threatened the world's biggest economy.
The rand erased most of those gains later in the session.
Trading was expected to pick up next week when most market participants return from their holidays, giving the rand some direction.
"There's still a holiday mentality out there and liquidity has been very thin. The rand has been trading erratically," said one trader.
"We will only start seeing proper trades coming back into the market next week when market participants are back again."
The yield on the 2026 government bond was at 7.25 percent while the 2015 issue was yielding 5.33 percent.
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Brent falls towards $112; China data offsets US concerns

 Brent crude pared earlier losses to stay above $112 a barrel on Thursday as positive data reinforced hopes of an economic recovery in China, but the prospect of more budget battles in the United States and rising oil supply weighed on prices.
President Barack Obama and congressional Republicans face even bigger budget wrangling in the next two months after a hard-fought deal halted a round of automatic fiscal tightening that threatened to push the world's largest economy into recession.
Brent crude fell 29 cents to $112.18 a barrel by 0529 GMT after rising more than 1 percent on Wednesday to settle at the highest since October.
U.S. crude for February delivery was down 21 cents to $92.91 after closing at its highest since September.
"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."
Both contracts pared earlier losses of more than 50 cents after data showed China's services sector expanded in December, fueling hopes that the world's second largest economy is recovering.
Oil prices surged at the start of the year despite analysts' expectations of a lower price in 2013 as supply outweighs demand. Crude production in the United States has hit a 19-year high while Russia pumped the most oil in the world last year, ahead of Saudi Arabia.
"If one focuses on the oil fundamentals, pricing at the current level appears overbought," Shum said, pointing to the fragile global economy and the growth in oil production from non-OPEC countries.
"In 2013, OPEC may have to limit supply in order to accommodate a rise in non-OPEC oil production growth," he said.
In the United States, a major pipeline expansion that aims to ease the bottleneck at Cushing, Oklahoma -- a factor that has depressed U.S. crude prices -- should pump at full rates from the end of next week.
The spread between Brent and West Texas Intermediate has narrowed to about $19 a barrel, down from 2012 highs of about $26.
Investors will be scouring weekly data on U.S. jobless claims and oil inventories due later on Thursday for further cues on the economic health of, and fuel demand in, the world's largest economy.
U.S. commercial crude oil stockpiles likely fell last week due to lower imports as refiners drew down inventories for year-end tax purposes, a preliminary Reuters poll of eight analysts showed.
The American Petroleum Institute (API) will release its report on Thursday, delayed due to the New Year day's holiday on Tuesday. The U.S. government's Energy Information Administration (EIA) will issue its data on Friday.
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