04/08/2011

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:00:13. > :00:16.Sell, sell, sell, markets in freefall across the world. Huge

:00:16. > :00:19.sell-offs tonight, in New York and earlier in London, and across the

:00:19. > :00:23.continent. With the economies of Europe and the US on a knife-edge,

:00:23. > :00:28.is there now a real danger of a second global slump. That is more

:00:28. > :00:31.of the concern on the markets. How are we going to be able to avoid

:00:31. > :00:36.the recession from taking place. Two men who control tens of

:00:36. > :00:42.billions of pounds, and an eminent economist will tell us just how bad

:00:42. > :00:45.this really is. Also tonight, torture, rape and

:00:45. > :00:50.deliberate starvation, an exclusive undercover investigation by

:00:50. > :00:54.Newsnight reveals evidence of the Ethiopian Government using millions

:00:54. > :00:58.of international aid to punish their political opponents. We also

:00:58. > :01:05.investigate allegations of human rights abuse.

:01:05. > :01:07.They were beating me while I was being raped. I was bleeding. I

:01:07. > :01:14.became unconscious when I saw my unborn baby.

:01:14. > :01:19.I will be speaking to a senior Ethiopian diplomat. And is the

:01:19. > :01:22.death penalty back on the agenda, as a cascade of e-petitions pings

:01:22. > :01:30.into the Government's index, will the politicians really take any

:01:31. > :01:35.notice. Just when we hoped it might get a little better, it got worse.

:01:35. > :01:40.In fact, if the markets are to be believed, the west could even be

:01:40. > :01:45.hurtling towards a second recession. There was carnage on trading room

:01:45. > :01:48.floors around the world, as the markets went into freefall over

:01:48. > :01:52.fears the eurozone debt crisis could spread. The Dow Jones plunged

:01:52. > :01:56.by over 500 points tonight, in the biggest sell-off since the credit

:01:56. > :02:00.crunch brought the global economy to its knees three years ago. In

:02:00. > :02:04.the UK the picture wasn't much better, with the banks taking the

:02:04. > :02:12.biggest hit. Lloyd's came off worst, losing 10% of its value in a single

:02:12. > :02:17.day. (sound of knives being sharpened)

:02:17. > :02:21.It wasn't supposed to be this hard on the markets, and it definitely

:02:21. > :02:24.wasn't supposed to be the worst fall in London since the depths of

:02:24. > :02:28.the recession. Could we be going back there. Behind the sudden

:02:28. > :02:37.collapse was a fear that the world economy is on a knife-edge between

:02:37. > :02:43.recovery and another global slump. In London, the FTSE was down 191

:02:43. > :02:50.points, a drop of 3.4%, wiping �50 billion from the value of the top

:02:50. > :02:56.companies. In Germany the DAX was sharply down. The Dow Jones tumbled

:02:56. > :03:00.519 points, 4.3%, its worst one day performance since 2008. What is

:03:00. > :03:03.particularly worrying about today's sell-off, is it came despite

:03:03. > :03:07.attempts, costing billions of pounds by Brussels and Washington,

:03:07. > :03:12.to try to convince the financial world, that actually overindetected

:03:12. > :03:15.countries were sorting themselves out. And nagging doubt about that

:03:15. > :03:20.on the markets, today turned into a full blown loss of confidence.

:03:20. > :03:24.Sometimes there is nothing more disconcerting than reassurance.

:03:24. > :03:27.have a credible package. Only two weeks ago the President of the

:03:27. > :03:32.European Union was trumpetting a deal that was meant to contain the

:03:32. > :03:34.crisis in the eurozone, at least for the summer. Today he was

:03:34. > :03:40.warning that he was deeply concerned that the sovereign debt

:03:40. > :03:43.crisis would spread beyond Europe. International investors are now so

:03:43. > :03:48.worried about lending money to Spain, they are demanding interest

:03:48. > :03:52.rates to buy its bonds, at more than 6%. To lend to Italy and buy

:03:52. > :03:57.its bond, they want interest rates or yields of a similar amount. Some

:03:57. > :03:59.bond dealers say when rates get above 6%, a country's debts become

:03:59. > :04:05.unmanagable. The European Central Bank was put under massive pressure

:04:05. > :04:09.to step in and start buying up the bond that is no-one else wants.

:04:10. > :04:13.Today its president said it was buying bonds, but not the crucial

:04:13. > :04:17.Italian and Spanish ones. The key for everything is Government ahead

:04:18. > :04:23.of the curve, in both their fiscal policy, and their structural

:04:23. > :04:29.reforms, and structural reforms are absolutely of the essence. I know

:04:29. > :04:33.that they are here and there difficult, they might be

:04:33. > :04:37.politically difficult in our democracies. They are paying off.

:04:37. > :04:43.But the focus of traders' fears about the real economy has been

:04:43. > :04:48.shifting from debt to growth. The US is now clearly slowing down.

:04:48. > :04:52.Consumer spending virtually ground it halt, growing by 0.1%, compared

:04:52. > :04:56.with 2.1% growth in the first quarter. The economy grew at an

:04:56. > :05:03.annual rate of 1.3% in the second quarter. Economists had forecast

:05:03. > :05:06.growth of 1.8%. I think growth is the element of uncertainty that hit

:05:06. > :05:10.the markets more recently. Up until now we have had the political

:05:10. > :05:13.concerns, both in Europe and in the US. But the expectation was that we

:05:13. > :05:18.are going through a relatively soft period in economic growth, and we

:05:18. > :05:22.will be starting to see an uptake in the second half of the year.

:05:22. > :05:26.More recently we have seen a disappointment in terms of economic

:05:26. > :05:30.numbers. And if there is economic disappointment persisting, we could

:05:30. > :05:33.be heading in a global second-dip recession, that will have adverse

:05:34. > :05:38.impact. Now economists are starting to ask, once again, if it is the

:05:38. > :05:44.right time to be imposing austerity, when the global economy looks so

:05:44. > :05:48.weak. Economic austerity is not unlike personal austerity n a sense

:05:48. > :05:51.it is far easier to do when you are feeling strong, rather than weak.

:05:51. > :05:55.Austerity is all about cutting back on your outgoings, but, if you

:05:55. > :05:59.don't have the economic growth, you don't have the income. Then you

:05:59. > :06:04.won't have the tax receipts from all that economic activity, to try

:06:04. > :06:08.to improve your financial position. In fact, it could even get worse.

:06:08. > :06:13.If we are going to get better growth, the west needs the spending

:06:13. > :06:21.power of the east. I think looking at the eurozone in the developed

:06:21. > :06:28.world and more generally, there is clearly a lot of head winds from

:06:28. > :06:31.highly indebted consumers seeing their wages fall, and growth cut.

:06:31. > :06:35.The Governments also cutting back on the spending. But growth going

:06:35. > :06:39.forward will be selling to increasingly wealthy consumers in

:06:39. > :06:43.the emerging markets. There is a second knife-edge here, sorting out

:06:43. > :06:47.Government finances now, may turn out to be at odds with getting the

:06:47. > :06:52.global economy going again. Governments have to cut spending,

:06:52. > :06:56.or raise tax, in order to prevent them losing their credit rating,

:06:56. > :07:01.and having sovereign debt crisis. On the other hand f they cut too

:07:01. > :07:04.much, or too soon, then they will suck demand out of their economies,

:07:04. > :07:09.and possibly turning a slowdown into a slump.

:07:09. > :07:13.So if we are to avoid a global recession, political leaders still

:07:13. > :07:17.have to convince the markets their debt reduction plans are credible.

:07:17. > :07:20.In one of the worst days in Wall Street's history, the markets

:07:20. > :07:25.demonstrated just how little confidence they have about that.

:07:25. > :07:30.With me now are two men who between them control tens of billions of

:07:30. > :07:40.pounds across the global markets. From New York I'm joined by Peter

:07:40. > :07:40.

:07:40. > :07:44.Schiff, CEO, and joining me here is Paul Griffiths.

:07:44. > :07:48.First of all, Paul Griffiths, how concerned are you about what

:07:48. > :07:52.happened today? We are very concerned. In terms of not only the

:07:52. > :07:58.market reaction, but really the way out here. At the moment we are,

:07:58. > :08:08.frankly, we are on a knife-edge. A little too hot, and a little too

:08:08. > :08:12.

:08:12. > :08:17.cold and we could easily see a double dip. You predicted the

:08:17. > :08:21.credit crunch last time round, how critical was today's drop in the

:08:21. > :08:26.US? Pretty predictable. A lot of people who control money around the

:08:26. > :08:31.world, were making bad bets on an economic recovery. But all the

:08:31. > :08:35.stimulus and bailouts in the United States, didn't create a recovery,

:08:35. > :08:39.it created debt advanced recovery. That exacerbated the fundamental

:08:39. > :08:43.problems with the economy. The US is headed for a more severe

:08:43. > :08:46.recession than the one we think we emerged from. I think we are in a

:08:46. > :08:53.depression, the depression is interrupted by Government stimulus

:08:53. > :09:02.that only sows the seeds for the next downturn. The markets are only

:09:02. > :09:05.starting to - to come to grips with this. The stimulus is weakening the

:09:05. > :09:09.underlying economy. We need higher interest rates and the Government

:09:09. > :09:13.cutting back on spending. None of that will happen because the

:09:13. > :09:18.politicians don't want the voters to taste that medicine, that is the

:09:18. > :09:22.only way to cure this economy. Looking at the eurozone, was

:09:22. > :09:25.Barroso right to issue such a strong warning? I think he was, I

:09:25. > :09:28.don't control billions of dollars like the other two, I'm trying to

:09:28. > :09:32.make sense of what is happening. There is a collision of two factors

:09:32. > :09:36.going on here, on the one hand, as you just heard, you have the world

:09:37. > :09:40.waking up to the fact that there is a process of so-called deleveraging

:09:40. > :09:43.going on. That the economies and companies and banks still need to

:09:43. > :09:48.cut debts, so do households, that process will be brutal and slow.

:09:49. > :09:52.Anyone who was looking for a quick recovery was basically in cloud-

:09:52. > :09:55.cuckoo-land. Secondly, that realisation of colliding with the

:09:55. > :10:00.fact that the problems in the eurozone, in particular, have not

:10:00. > :10:04.been solved, and the question of whether the eurozone can hang

:10:04. > :10:08.together or not, is absolutely at the forefront of investors' minds

:10:08. > :10:13.at the moment. That is a nasty cocktail, particularly in August,

:10:13. > :10:16.when markets are slow, and trading is suffering from the curse of

:10:16. > :10:21.August when prices tend to shoot all over the place. One of the

:10:21. > :10:24.ironies is, if, if, Europe could operate in a cohesive fashion, it

:10:24. > :10:29.is probably in a stronger position than the US. Frankly, we don't see

:10:29. > :10:34.very much chance of that. Why, structurally you don't think the

:10:34. > :10:39.euro was set up to handle a crisis like this? It wasn't. Structurally

:10:39. > :10:43.the euro is a collection, as we know, of nation states, and clearly

:10:43. > :10:49.with monetary on the one hand, but no fiscal or political union on the

:10:49. > :10:53.other, this sort of cry sifs in the mix at some - crisis was in the mix

:10:53. > :10:59.at some point. Looking at the crisis today, Italy and Spain, we

:10:59. > :11:09.have the second time coming back from holiday in Spain. What will

:11:09. > :11:10.

:11:10. > :11:14.happen there? It feels like the banking crisis of 2007/208900 -

:11:14. > :11:19.2008, where the markets are swinging from one way to the next.

:11:19. > :11:25.Investors have woken up to the fact that they can't assume all the

:11:25. > :11:29.countries will get bailed out continuously. There will be

:11:29. > :11:33.restructuring. Now they have crossed the psychological rub con,

:11:33. > :11:36.they can't actually tell who is next. If people are looking at

:11:36. > :11:40.Italy and Spain saying help, how do we know they are different from

:11:41. > :11:45.Greece. Is this about confidence as much as anything else? It is, but,

:11:45. > :11:47.of course, so far we are only talking about the west, we are only

:11:47. > :11:52.talking about developed market economies, investors have another

:11:52. > :11:56.choice, they can invest elsewhere, emerging markets, Latin America,

:11:56. > :12:00.Asia, there are opportunities. there safe havens for investors?

:12:00. > :12:03.You want to invest with the creditor, in the nation that is are

:12:03. > :12:07.producing all the goods the west is consuming. They are the ones that

:12:07. > :12:11.have viable economies. They don't need us. In fact, having to

:12:11. > :12:16.subsidise the American consumer is actually undermining the Chinese

:12:16. > :12:19.economy and other emerging markets. To the extent they allow their

:12:19. > :12:23.currency to appreciate, they can consume their own production, and

:12:23. > :12:27.leave the rest of the world to twist in the wind. That will happen.

:12:27. > :12:32.I agree the problems in Europe are bad, they are more severe in the

:12:32. > :12:36.United States. The twisting in the wind has big consequences? If you

:12:36. > :12:41.advise all Uruguays to invest in emerging markets? We do, we

:12:41. > :12:47.recognise there is opportunity, clearly whether you are looking at

:12:47. > :12:52.QE-2 or 3. Quantitative easing? printing of money, sorry, that

:12:52. > :12:57.liquidity of money where is it going, to overseas and emerging

:12:57. > :13:02.markets. Is that sustainable? I think to my mind, one of the

:13:02. > :13:06.signs to which investors are panicked, it those not putting

:13:06. > :13:10.money into emerging markets are scrambling for anything they think

:13:10. > :13:15.as safe. Not only are you seeing gold and the yen going up. One of

:13:15. > :13:18.the fascinating things on the front of the second section tomorrow, is

:13:19. > :13:22.the bank of New York is paying negative interest rates to

:13:22. > :13:27.depositors, people who want to put their money with that bank now

:13:27. > :13:31.because they think it is safe, they will have to pay a fee. There is a

:13:31. > :13:35.scramble to put cash where they think it is safe. They think it is

:13:35. > :13:41.safe because it is too big to fail. That is the problem. You have moral

:13:41. > :13:44.has standards with banks that are structurally unsound. If the Fed

:13:44. > :13:47.does the right thing, every bank bailed out will fail. That is one

:13:48. > :13:51.of the problems. That is why our Central Bank is keeping interest

:13:51. > :13:54.rates so low. It is propping up the financial sector and the US

:13:54. > :13:58.Government. If you think Greece has a problem paying its debts, imagine

:13:58. > :14:03.what will happen to the US Government when our interest rates

:14:03. > :14:07.spike up. That is another credit crunch? I would say right now you

:14:07. > :14:10.have again, things turning negative. This is unchartered territory, it

:14:10. > :14:14.is a sign of just how many dislocations there still are in the

:14:14. > :14:17.system that need to be worked out. They have to get growth, we have to

:14:17. > :14:21.get out in order to get out of it, where will it come from? In the

:14:21. > :14:26.west, that's a very challenging question. Frankly, you can have a

:14:26. > :14:30.bit of, add a little bit to the mix in terms of some policy stimulus,

:14:30. > :14:38.maybe reduce taxation, but it is very unclear where growth is coming

:14:38. > :14:42.from in the west. Can you force investment? We could get to the

:14:42. > :14:45.point where, whether it be in economies which are receiving too

:14:45. > :14:49.much influence, put on some form of capital controls, or in the west we

:14:49. > :14:54.start to see capital controls to see money flowing out, I don't see

:14:54. > :14:57.that as a crazy scenario. We are not going to have growth in the

:14:57. > :15:01.United States at all, we will have inflation, but not genuine growth,

:15:01. > :15:04.that comes from the market. That comes from private entrepeneurs,

:15:04. > :15:08.from business investment, but we can't do that, the Government in

:15:08. > :15:13.the United States is undermining our economy with regulations and

:15:13. > :15:17.taxation and barrowing, - borrowing that is stifleing economic growth,

:15:17. > :15:20.and sucking all the capital out of the private sector and spending it.

:15:20. > :15:27.You are absolutely right. And mentioned the key word, inflation,

:15:27. > :15:34.in the western economies we are living with, whether the US, the UK

:15:34. > :15:40.or significant chungs of Europe we have overly - chunkss of Europe

:15:40. > :15:47.have overly inflated inflation. I think it is tough and a lot of

:15:47. > :15:52.people are looking to emerging markets for global demand. Although

:15:52. > :15:56.the economies are slowing down and sluggish, they haven't fallen off

:15:56. > :15:59.the cliff yet. With the markets gyrating wildly in the thin trading

:15:59. > :16:02.of August, the fact of the matter is the economies right now are

:16:03. > :16:07.bumping along the bottom, they are not off the cliff. Certainly it

:16:07. > :16:13.will be tough going forward. don't need more demand, we need

:16:13. > :16:16.more sue ply, we need to - supply, we need to make more stuff. In the

:16:16. > :16:20.east they are making more stuff, they don't have to export what they

:16:20. > :16:24.give to us, what is missing in the west is real production, we need

:16:24. > :16:27.more manufacturing, we need to make some stuff, we can't do that, so we

:16:27. > :16:31.rely on the Asian economy to supply us with all the merchandise we

:16:31. > :16:34.don't produce ourselves. We have to borrow the money to do it. The

:16:34. > :16:37.countries financing us are having problems because they have to

:16:37. > :16:40.create so much inflation in their own countries to prop up the dollar.

:16:40. > :16:45.Just before we finish. Bringing it back to Europe. What does the

:16:45. > :16:50.eurozone have to do, as Gillian says, will it be one crisis in one

:16:50. > :16:54.country one day or one the next? have moved on from, that the

:16:54. > :16:58.contamination effect we have talked about for so many months is with us,

:16:58. > :17:02.we need to see a coherent European solution. Frankly, though, I don't

:17:02. > :17:08.think it will happen any time soon. Are you as pessimistic? The problem

:17:08. > :17:13.is the politics. The problem is the politics, absolutely. The solution.

:17:13. > :17:17.One thing very clear from 2008 is sticky plaster solutions don't work.

:17:17. > :17:21.They tried it with the banks it failed, and with the eurozone t

:17:21. > :17:26.failed. Europe will have to choose, either it pulls together in a union

:17:26. > :17:30.and finds a common solution, or some element of the eurozone will

:17:30. > :17:34.break apart. The best solution for Europe and the euro is to let the

:17:34. > :17:38.countries that can't pay their bills default, let them restructure,

:17:38. > :17:42.there shouldn't be a bailouts, this shouldn't sacrifice the euro, they

:17:42. > :17:47.should force the people who recklessly loaned money to

:17:47. > :17:50.Governments to lose money. That will not happen, politically there

:17:50. > :17:55.is a long way to go. That is the problem. That is the problem, they

:17:55. > :18:00.will create a moral has standard which ultimately will doom the euro,

:18:00. > :18:04.before the euro dies, the dollar will die first, our problems are

:18:04. > :18:07.more acute, Europe's problems are for tomorrow, America's are for

:18:07. > :18:11.today. International attention is focused

:18:11. > :18:15.on the crisis in the Horn of Africa in an emergency appeal to save

:18:15. > :18:20.millions from starvation, apart from this country, countries like

:18:20. > :18:23.Ethiopia are given hundreds to pull them out of - hundreds of millions

:18:23. > :18:29.to pull them out of poverty. We look at allegation that is this

:18:29. > :18:33.money is being misused, that the Ethiopian Government suesing it as

:18:33. > :18:43.a weapon against the opposition, married with systematic torture and

:18:43. > :18:47.

:18:47. > :18:56.rape, to cow the population. The Horn of Africa, a humanitarian

:18:56. > :19:00.crisis on an unprecedented scale. Every day thousands of refugees are

:19:00. > :19:03.fleeing to northern Kenya from Somalia and Ethiopia. Walking miles

:19:03. > :19:13.to escape drought and familiar anyone, children, the old and sick,

:19:13. > :19:16.are dying. It is images like these that have

:19:16. > :19:21.prompted the international community to pour millions in

:19:21. > :19:27.emergency aid into the region. But this in itself is a drop in the

:19:27. > :19:34.ocean. Separately every year up to $3 billion in long-term development

:19:34. > :19:36.aid is given to Ethiopia alone. In this special report, by Newsnight

:19:36. > :19:41.and the Bureau of Investigative Journalism, we expose evidence that

:19:41. > :19:47.the west has turned a blind eye to systematic human rights abuses in

:19:47. > :19:52.had Ethiopia. I have given up on the west. I do

:19:52. > :19:58.not believe that the west is interested in democracy and the

:19:58. > :20:03.rule of law and human rights. In the third world.

:20:03. > :20:07.We reveal evidence of how aid is being used as a weapon of

:20:07. > :20:11.oppression. Propping up the Government of Meles Zenawi.

:20:11. > :20:19.Development is only available to those people who support the regime,

:20:19. > :20:24.or who vote for the ruling party. The rebels began pushing in through

:20:24. > :20:30.the suburbs at 4.00am this morning. Meles Zenawi came to power after

:20:30. > :20:37.ousting the military regime in 1991. The priority will be to ensure law

:20:37. > :20:46.and order. But the crunch came in the elections of 2005. A brutal

:20:46. > :20:51.crackdown. 193 civilians died, tens of thousands were detained. He

:20:51. > :21:01.remained a friend of the west. And allegations of human rights abuses

:21:01. > :21:03.

:21:03. > :21:06.continued to this day. In 2007, the Ethiopian army launched a counter

:21:06. > :21:09.insurgency campaign. Human Rights Watch and the American Association

:21:09. > :21:16.for the Advancement of Science, produced before and after satellite

:21:16. > :21:19.images of villages razez to the ground. Allegations that Ethiopian

:21:19. > :21:28.troops were forcibly displacing entire rural communities,

:21:28. > :21:32.destroying dozens of villages. The media and most aid agencies are

:21:32. > :21:36.banned from the region. We decided to find out what is happening now

:21:36. > :21:46.by talking to those who have recently fled to the refugee camps

:21:46. > :21:46.

:21:46. > :21:52.of northern Kenya. This is the largest refugee camp in

:21:52. > :21:59.the world. More than 400,000 people live here. It is a sprawling

:21:59. > :22:05.refugee city. The vast majority are from Somalia. Thousands are

:22:05. > :22:14.arriving on a daily basis, escaping the drought and familiar anyone.

:22:14. > :22:18.Ethiopians are coming here too. Civilians are caught up in the

:22:18. > :22:24.fighting between the rebels and the military. We have been told that

:22:24. > :22:28.the number of eat Ethiopian refugees is increasing over the

:22:28. > :22:31.last few weeks. We have tracked some down and are hoping to meet

:22:31. > :22:36.them here. This grandmother of four arrived

:22:36. > :22:42.just three weeks ago. She was arrested along with 100 others. She

:22:42. > :22:45.says soldiers killed her son in front of her.

:22:45. > :22:53.TRANSLATION: Whenever there is fighting between the two, they go

:22:53. > :22:58.to the nearest town and take their revenge on civilians. They would

:22:58. > :23:03.kill or arrest everybody. She was jailed for one-and-a-half years.

:23:03. > :23:08.The women kept in a container, picked out on a nightly basis to be

:23:08. > :23:15.tortured. TRANSLATION: They raped me in a room. One of them was

:23:15. > :23:20.standing on my head, and one tied my hands. They were taking turns. I

:23:20. > :23:25.fainted during this. After that they threw me into the container. I

:23:25. > :23:35.can't say how many, but there were many soldiers. I can't estimate the

:23:35. > :23:36.

:23:36. > :23:39.number. A mother with a young child. Again stories of rape, and torture.

:23:39. > :23:45.TRANSLATION: There were more than 50 women in prison with me, we all

:23:45. > :23:49.experienced the same sorts of things. I gave up on life, I

:23:49. > :23:55.thought they were going to kill me. You don't worry about rape when you

:23:55. > :24:02.have no hope. This woman says she was arrested and accused of being a

:24:02. > :24:05.supporter of the rebel militia, the National Liberation Front, declared

:24:05. > :24:15.a terrorist group by the Ethiopian Government. She shows us the marks

:24:15. > :24:22.and scars of torture. Stab wounds from a bay I don't know net. - a

:24:22. > :24:26.Bayonette. TRANSLATION: They used to beat me, whatever they liked.

:24:26. > :24:35.Then they started raping me. They were beating me while I was being

:24:35. > :24:40.raped. I was bleeding. I became unconscious when I saw my unborn

:24:40. > :24:47.baby. And you were eight months pregnant at this time? TRANSLATION:

:24:47. > :24:54.Yes. A man stamped on my stomach, you can imagine what happened to

:24:54. > :25:03.the child. Very big kicks. Blows with the butt of a gun. As a

:25:03. > :25:08.consequence of that, the child died. Independent sources have told us

:25:09. > :25:13.similar stories of widespread human rights abuses. There is no way that

:25:13. > :25:23.we can verify these stories, and the press can't operate freely in

:25:23. > :25:25.

:25:25. > :25:30.Ethiopia, we are going to try to go in undercover.

:25:30. > :25:35.Away from the drought and familiar anyone, the rains have come to

:25:35. > :25:41.Addis Abada. It is difficult to operate here, it is a virtual one-

:25:41. > :25:48.party state, and dissent is not tolerated. We arranged clandsetine

:25:48. > :25:53.meetings with key contacts. Ethiopia receives approximately $3

:25:53. > :26:02.billion in long-term development aid. The UK is the second-largest

:26:02. > :26:06.donor, after the US. This year our budget tops �290 million. The

:26:06. > :26:12.Ethiopian Government controls much of the distribution. Almost all of

:26:12. > :26:17.this aid goes through the Government channels. They have the

:26:17. > :26:22.Government administrators have the last say on who gets and who does

:26:22. > :26:28.not. The motivation is buying support, that's how they recruit

:26:28. > :26:35.support. Holding the population hostage.

:26:35. > :26:42.We travelled to the southern region. It is surprisingly illusion here,

:26:42. > :26:48.but this is deceptive. Lush here, but it is deceptive. The rains have

:26:48. > :26:53.come late and the crops haven't matured. The wife of this village

:26:53. > :26:57.elder died a few days a the reason, he says, chronic hunger.

:26:57. > :27:01.TRANSLATION: Five old people and five children died because of the

:27:01. > :27:11.familiar anyone recently. There are many children begging in the towns

:27:11. > :27:19.and on the sides of the roads. They are struggling to survive. This

:27:19. > :27:27.woman is a widow. She has seven children. The older ones have gone

:27:27. > :27:30.to town to beg, and scavange scraps from bins.

:27:30. > :27:36.TRANSLATION: This year there has been no help, no intervention from

:27:36. > :27:41.the Government. What are your fears for your children, for their

:27:41. > :27:48.future? TRANSLATION: Got knows, if they survive they might find their

:27:48. > :27:53.way, or die of poverty. What can I TRANSLATION: I give my children

:27:53. > :27:59.water, boiled with the leaves from coffee trees, and a sort of grass

:27:59. > :28:05.that is meant for the animals, that is how they are surviving.

:28:05. > :28:10.Another village 30kms away, it is a similar story. We spoke to the

:28:10. > :28:18.villagers, some had not eaten for four days. They told us they have

:28:18. > :28:21.had no help from the Government. In 2005, the people of these villages

:28:21. > :28:26.voted overwhelmingly for the opposition. And according to our

:28:26. > :28:31.sources, they are still being punished now.

:28:31. > :28:36.We travelled 100kms north to meet with others, farmers who say they

:28:36. > :28:40.too have been targeted because of their political beliefs. It was too

:28:40. > :28:47.dangerous to meet in their own village, they walked two hours

:28:47. > :28:52.across country, to meet at a safe location. TRANSLATION: Because we

:28:52. > :28:57.are in the opposition, we are not able to survive in our country. Our

:28:57. > :29:01.integrity, our conscience, does not allow us to join the ruling party,

:29:01. > :29:08.for these reasons we suffer greatly, we suffer if we want to get

:29:08. > :29:16.fertiliser, I think there are spies here. Is that him? Is it safe?

:29:16. > :29:20.is not safe. This is not safe? We can divert. We have had to cut

:29:20. > :29:23.the interviews here short, we have basically been told that we have

:29:23. > :29:28.attracted too much attention, and it is no longer safe to continue

:29:28. > :29:33.here. But these people here, these farmers have told us how they have

:29:33. > :29:37.been denied fertiliser, seed, they have had their land grabbed from

:29:37. > :29:41.them, such is the situation that their own wives are leaving them,

:29:41. > :29:44.they have been completely ostracised from their own

:29:44. > :29:48.communities, just because of their political beliefs and the grip the

:29:48. > :29:51.regime has on the community here. Opposition leaders say they have

:29:51. > :29:57.personally brought evidence like this to the attention of the

:29:57. > :30:05.international community time and time again.

:30:05. > :30:08.The position is dismissive. They always want to dismiss it as an

:30:08. > :30:18.isolated incident, when we present them with proof, and we challenge

:30:18. > :30:20.

:30:20. > :30:27.them to go down and check it out for themselves, they don't do it.

:30:28. > :30:33.A traditional funeral further north. This is Ethiopia's largest and most

:30:33. > :30:38.populist region. In the last few months more than 200 political

:30:38. > :30:43.activists have been detained in a series of mass arrests. Many

:30:43. > :30:47.detained without charge. Accused of being members of the Oromo

:30:47. > :30:55.liberation front, an armed seperatist organisation, again,

:30:55. > :30:58.declared a terrorist group by the Ethiopian Government.

:30:58. > :31:01.Professor Merera Gudina is a seasoned national opposition

:31:01. > :31:05.politician, with his roots firmly in the region. He says the

:31:05. > :31:10.Government is rounding up members of his and other parties, accusing

:31:10. > :31:14.them of being terrorists. Hundreds of them are now in prison, our

:31:14. > :31:17.members. The Government knows our members, but they say they are

:31:17. > :31:21.members of the other party, the outlawed party. You are saying

:31:21. > :31:24.these are innocent people that have been jailed? We know they are our

:31:24. > :31:27.members they have been in parliament, some of them, some of

:31:27. > :31:31.them in the pal parliament, some of them were in the regional

:31:32. > :31:40.parliament. Some of them were our candidates last time, during the

:31:40. > :31:47.elections. What happens to them in jail? Some of them are severely

:31:47. > :31:56.tortured. Back in Addis Abada, it is here that some of the worst

:31:56. > :32:01.human rights abuses are alleged to be currently taking place. This is

:32:01. > :32:07.the prison, and it is here that opposition politicians, academics

:32:07. > :32:14.and dissidents are interrogated. This man recently fled from

:32:14. > :32:21.Ethiopia after his release. TRANSLATION: Interrogation starts

:32:21. > :32:31.with beating. They handcuff your hands and feet, and hang you upside

:32:31. > :32:35.

:32:35. > :32:40.down. They immerse you in water. They use electric shocks. This man

:32:40. > :32:50.was a senior opposition politician. He was interrogated every night for

:32:50. > :32:50.

:32:50. > :33:00.six weeks, kept in solitary confinement. I have never seen such

:33:00. > :33:02.

:33:02. > :33:09.being grigaigs of - being gridaigs of human being. I saw a man -

:33:09. > :33:17.Degradation, they said to a man to remove his trousers, they beat him,

:33:17. > :33:25.and beat him, they took his penis and with a cable round it just beat

:33:25. > :33:28.it like that, he will never produce again. You will be castrated.

:33:28. > :33:33.The Ethiopian Human Rights Commission recently published a

:33:33. > :33:43.report into conditions in 35 prisons across the country. It says

:33:43. > :33:50.

:33:50. > :34:00.The international community funds the Ethiopian commission. Last year

:34:00. > :34:05.the UK's contribution was �230,000. This is an internationally

:34:05. > :34:13.respected human rights campaigner, Professor Mesfin Woldemariam.

:34:13. > :34:22.they wanted the Human Rights Commission to work, justly, legally,

:34:22. > :34:27.I think there is a lot to be said. But these are puppets appointed to

:34:27. > :34:32.the commission. Absolute puppets. You know we have a generation of

:34:32. > :34:36.people beaten, some of them even lost their lives, and we challenge

:34:36. > :34:43.a lot of diplomats, including British diplomats to get access to

:34:43. > :34:48.what is going on. What is their response? They say the Government

:34:48. > :34:52.say this is interference, the Government say this and that, more

:34:52. > :34:57.apologetic, not really pressing hard to get the information about

:34:57. > :35:00.what is going on. They need to think much more strategically about

:35:00. > :35:04.how you engage with a country that fundamentally disrespects human

:35:04. > :35:10.rights. How do you make sure that aid in that contextually gets where

:35:10. > :35:15.it is supposed to get. It is a - context, actually gets where it is

:35:15. > :35:18.going to get. The purpose of development said is to help

:35:18. > :35:21.Ethiopia on to its feet to establish democracy, justice and

:35:21. > :35:31.the rule of law. The evidence we have gathered suggests it is

:35:31. > :35:33.

:35:33. > :35:41.failing. Joining me now is the Ethiopian deputy head of mission to

:35:41. > :35:46.the UK, ambassador Abdirashid Dulane. First of all, what we

:35:46. > :35:51.discovered was human rights violations that were systemic,

:35:51. > :35:55.widespread abuse and sorture, a pregnant woman raped and tortured,

:35:55. > :36:01.a grandmother in the refugee camp who said she was raped, another

:36:01. > :36:06.woman who was stamped on her stomach, what do you say to that?

:36:07. > :36:16.First, thank you very much actually for allowing us to explain, but,

:36:16. > :36:26.first, I want to indicate that this is completely a report that lacks

:36:26. > :36:27.

:36:27. > :36:37.objectivity, it also lacks even- handedness, and as a matter of fact

:36:37. > :36:37.

:36:37. > :36:43.it solely got the source, the sources which it used are opponents

:36:43. > :36:52.of Ethiopia who have been rejected by the electorate, and who have

:36:52. > :36:57.been, time and again, already shown that their allegations are

:36:57. > :37:02.unfounded. If you look, for example.: Do you disbelieve these

:37:02. > :37:09.women were raped and tortured, one had bayonet marks on her feet,

:37:09. > :37:13.these are not, these are women and grand mothers? These are in the

:37:13. > :37:18.refugee camp. These are in the refugee camp? Only one, the others

:37:18. > :37:22.were within the country. They were, our reporter was there? He said

:37:22. > :37:26.actually he was reporting from the refugee camp. He spoke to one women

:37:26. > :37:30.in the refugee camp, and he spoke to others within the country. The

:37:30. > :37:35.point is surely that these women, whether these women are opposition

:37:35. > :37:44.supporters or not, presumably you condemn any kind of torture or

:37:44. > :37:47.abuse? Yes. I was generally talking about the report. As far as torture

:37:47. > :37:54.and rape is concerned, the Ethiopian Government is a

:37:54. > :37:58.Government that is governed by the rule of law. That human rights and

:37:58. > :38:08.also democratic rights, are enshrined within the Ethiopian

:38:08. > :38:13.constitution. What happens in prison, in prison in Addis Abada,

:38:13. > :38:18.we heard there were men that had their heads held underwater, whose

:38:18. > :38:24.genitals were smashed, who had electric currents put through their

:38:24. > :38:28.body? These are completely rehashed and recycling of old allegations

:38:28. > :38:34.for which my Government has time and again and repeatedly has given

:38:34. > :38:37.answers to. What about having a UN special raconter on torture, to go

:38:37. > :38:42.into the country and look around the prisons and speak to the

:38:42. > :38:46.people? What about that? What I'm saying is look at your reporter,

:38:46. > :38:52.what he was saying that the reporters are not actually allowed,

:38:52. > :38:58.and he was reporting actually from Addis Abada. He got in secretly? He

:38:58. > :39:03.was undercover, ambassador? He was reporting from Oromo, he was also

:39:03. > :39:10.reporting. Can I just tell you, he was undercover? Can I tell you, one

:39:11. > :39:17.of your reporters, Mike skap skal woolridg, he was there, he has been

:39:17. > :39:21.there, he was reporting in the country. Can I be clear, you have

:39:21. > :39:27.to understand the BBC position on this, he had to go undercover, he

:39:27. > :39:33.would have not been allowed entry into Ethiopia. Who were his sources,

:39:33. > :39:38.who took him into the country, OLF, these are the two organisations he

:39:38. > :39:42.took as a source. He spoke to many, many villagers, and scores of

:39:42. > :39:48.people, one particular point, let's talk about the farmer who said he

:39:48. > :39:52.had neither fertiliser and seeds, what Angus Stickler found when he

:39:52. > :39:55.visited villages, is one village would be on the edge of starvation

:39:56. > :39:58.and no crops, and the next village people were not starving, they were

:39:58. > :40:02.not prosperous, they were not starving, and the village that was

:40:02. > :40:06.in much greater trouble was a village that had opposition

:40:06. > :40:11.supporters, the village that was looked after, was a Government-

:40:11. > :40:18.supported village, do you deny that? Yes, I completely deny that.

:40:18. > :40:24.In Ethiopia in 200315 million people were actually requiring

:40:24. > :40:27.assistance, now, in 2011 only 4.5 million people are requiring

:40:27. > :40:35.assistance. From here you can understand that the policies of the

:40:35. > :40:42.Government, for which we are always putting as a priority, in making

:40:42. > :40:46.sure that the early warning systems are actually in place, and these

:40:46. > :40:50.people which they are saying actually have never actually

:40:50. > :40:56.starved. The UN report on torture on Ethiopia, amnesty, Human Rights

:40:56. > :40:59.Watch, they are all lying, they are just talking nonsense, and

:40:59. > :41:03.Newsnight too? Because these independent investigations have

:41:03. > :41:08.already been carried out. As a matter of fact by saying my

:41:08. > :41:18.Government is actually starving people, and the use of aid money

:41:18. > :41:18.

:41:18. > :41:21.and aid resources and the development assistance group has

:41:21. > :41:25.already independently investigated and already found that these

:41:25. > :41:33.allegations were completely unfounded, and were fabricated.

:41:33. > :41:38.Just one last point, do you think that you would let, not only the UN

:41:38. > :41:42.special person in, but do you think journalists should be able to come

:41:42. > :41:48.into the country to speak to whoever they wish and go wherever

:41:48. > :41:58.they want, and they should be allowed into Ethiopia to make their

:41:58. > :42:06.own judgments? Journalists with special agendas, working close with

:42:06. > :42:11.these terrorists elements will still be not allowed And the UN

:42:11. > :42:13.representative, you will let him in? We will be able to do that.

:42:13. > :42:23.Unfortunately there was no-one from the Department of International

:42:23. > :42:36.

:42:36. > :42:39.development available tonight. They It's 13 years since capital

:42:39. > :42:43.punishment has been voted on at Westminster. It seems it is rarely

:42:43. > :42:47.talked about among politicians. But the subject has received the most

:42:47. > :42:52.on-line e-petitions, more than 40, in the Government's new e-petitions

:42:52. > :42:56.scheme, which went live today. If the number of signatures to these

:42:56. > :42:59.e-petitions were to reach 100,000, it is possible it could trigger a

:42:59. > :43:04.parliamentary debate. Supporters of capital punishment believe MPs have

:43:04. > :43:14.no stomach for the issue of the death penalty, and this just might

:43:14. > :43:16.

:43:16. > :43:20.On June 21st Ruth Ellis was found guilty of murder at the Old Bailey.

:43:20. > :43:26.The questions about the death penalty haven't changed. Millions

:43:26. > :43:31.are asking is it iflised to kill by law, does it really act as a

:43:31. > :43:37.deterrent. Ever since its abolition, the campaign to bring it back has

:43:37. > :43:41.flared up periodically. An hour before the debate began a cue 100

:43:41. > :43:46.yards long had formed outside the House of Commons. They should bring

:43:46. > :43:50.hanging back. Ultimately the attempts have never gotten anywhere.

:43:50. > :43:58.Hanging seems to be, literally, a dead issue. The latest attempt to

:43:58. > :44:03.bring back capital punishment, has come from a blogger who has named

:44:03. > :44:06.himself after someone who was executed, or a while back, Guido

:44:06. > :44:11.Fawkes. The public has always supported the death penal tee, but

:44:11. > :44:15.politicians have voted against it. At the moment we have seen a

:44:15. > :44:20.disengagement between the political classs and the public. As way of

:44:20. > :44:23.trying to address the disengagement, the Government has launched its e-

:44:23. > :44:28.petition website. It is this that campaigners for the death penalty

:44:28. > :44:34.think will make a decisive difference. Get00,000 names and it

:44:34. > :44:40.could, could, trigger a Commons debate. The final decision is up to

:44:40. > :44:44.a committee of backbenchers. I'm anxious this will be a success. It

:44:44. > :44:47.is an improvement on the previous e-petition, which ended at Number

:44:47. > :44:50.Ten and didn't lead to the House of Commons. I'm sure the Backbench

:44:50. > :44:53.Business Committee will want to respond to the petitions and look

:44:53. > :44:57.at it alongside other priorities, and find time to debate the most

:44:57. > :45:01.important issues that emerge from the launch today. Even if there is

:45:01. > :45:06.a debate t seems unlikely that enough MPs would vote for a

:45:06. > :45:10.restoration. Across the world, the countries with death penalties,

:45:10. > :45:16.there are so many people, hundreds of thousands of people executed

:45:16. > :45:19.yearly, it hasn't prevented those sorts of crimes taking place. When

:45:19. > :45:24.criminals commit crime, they don't think of the sentence, but whether

:45:24. > :45:29.they can get away with it. Should our elected representative doss

:45:30. > :45:34.what we tell them. MPs like Edmund Burke have long argued that they

:45:34. > :45:39.should have the strength to resist popular opinion. As I said to my

:45:39. > :45:43.speech of the electors of Bristol 1774, your representatives owes you,

:45:43. > :45:50.not his industry only, but his judgment, and he betrays, instead

:45:50. > :45:53.of serving you, if he sacrifices it to your opinion. And I went on to

:45:53. > :45:59.say, authoritative instructions, mandates issued, which the member

:45:59. > :46:03.is bound blindly and implicitly to obey, to vote and to argue for,

:46:03. > :46:07.though contrary to the clearest conviction of his judgment and

:46:07. > :46:16.conscience, these are things utterly unknown to the laws of this

:46:16. > :46:22.land, and which arise from a fundamental mistake of our order

:46:22. > :46:25.and tenor of our constitution. other words MPs are representatives

:46:25. > :46:28.not delegates. Then there is how you measure the public opinion.

:46:28. > :46:31.is absolutely true the public would like to see this issue debated in

:46:31. > :46:35.parliament. We find three quarters of people saying that politicians

:46:35. > :46:38.ignore the popular will when it comes to sentences for serious

:46:38. > :46:42.crimes. We know many people see crime as one of the biggest

:46:42. > :46:46.problems facing Britain. We know when we ask people what is it about

:46:46. > :46:49.crime bothering you, it is sentences being too lenient. But

:46:49. > :46:55.when people sit down and consider the issues, in the way that MPs

:46:55. > :46:59.have to, their views turn out to be a bit more nuanced. If you take the

:46:59. > :47:04.killing of Sara Payne, people said at the time of her murder her

:47:04. > :47:08.killer should be executed. After all the judicial process, and life

:47:08. > :47:13.in jail, as the sentence, without remission, 84% admitted that

:47:13. > :47:16.judgment was right. As if to illustrate the problem, the most

:47:16. > :47:21.popular petition on the Government's website tonight is to

:47:21. > :47:29.keep the ban on capital punishment, getting more than double the

:47:29. > :47:33.support for the petition for bringing back the death penalty.

:47:33. > :47:38.Further Government developments on the stories developing last night

:47:38. > :47:43.on Newsnight, we reported claims by Heather Mills claiming her phone

:47:43. > :47:49.was hacked by a Mirror Group journalist. We carried an exclusive

:47:49. > :47:54.interview with Heather Mills, where she said she had been contacted by

:47:54. > :47:59.a Mirror Group journalist, who relayed to her, verbatim, a message

:47:59. > :48:05.that Sir Paul McCarthy had left on her voicemail, leading her to the

:48:05. > :48:11.conclusion that her phone had been hacked, apparently confirmed by an

:48:11. > :48:16.unnamed journalist. Added to this, an article written by Piers Morgan,

:48:16. > :48:22.not the journalist named to u where he explained during his time as

:48:23. > :48:26.editor of the Mirror, he was played a tape of a message left by Sir

:48:26. > :48:30.Paul McCarthy. Tonight there is word that Sir Paul McCarthy has

:48:30. > :48:34.entered the fray, talking to a group of journalists in Los Angeles,

:48:34. > :48:40.where he has said he will ask the police to investigate this

:48:40. > :48:45.allegation, decribing the hacking of phones as a horrendous invasion

:48:45. > :48:49.of privacy. When someone of his stature gets involved in this, it

:48:49. > :48:53.only makes people like Piers Morgan to explain how they heard this tape.

:48:53. > :49:03.No time for the papers, they all go on financial meltdown. That is all

:49:03. > :49:28.

:49:28. > :49:32.from Newsnight tonight, join us After the rain of Thursday, Friday

:49:32. > :49:34.is looking good. With most places dry and bright, with some very

:49:34. > :49:37.pleasant sunshine, the rain clearing away from the Northern

:49:37. > :49:41.Isles during the course of the day and for the rest of the UK we are

:49:41. > :49:45.set fair. Mid-afternoon, broken cloud and sunshine, across the

:49:45. > :49:49.heart of England. Temperatures in the comfort zone, high teens, low

:49:49. > :49:53.20s, light winds. Warmer than that, across the London area. We have

:49:53. > :49:57.lost the oppressive heat which many of us have endured over the last

:49:57. > :50:02.couple of days. Some of the best sunshine around the coastal fringe.

:50:02. > :50:06.There will be some cloud building up inland, across the south west

:50:06. > :50:12.peninsula, it shouldn't threaten rain, it is a similar story across

:50:12. > :50:16.Wales too, some of the best of the blue skies will be on the beaches.

:50:16. > :50:21.In Northern Ireland the odd chance of a shower. Most places staying

:50:21. > :50:25.dry and bright, and for Scotland showers will be isolated.

:50:25. > :50:28.Temperatures 17-18. Friday looking OK, Saturday across the more

:50:28. > :50:32.northern areas is more mixed, there will be a threat of showers, and

:50:32. > :50:36.some heavy and slow moving. Further south, I think any showers

:50:36. > :50:42.remaining fairly isolated, a good chance on Saturday that many of us

:50:42. > :50:47.again will stay dry, high teens and low 20s, this is the set up on