World Watch

WASHINGTON
Christmas in January
President George W. Bush proposed an audacious tax-cut program — one he hopes will jump-start the sputtering U.S. economy. The plan, which would eliminates taxes on corporate dividends, delighted Wall Street but led Democrats to charge that Bush was merely making the rich richer. To counteract that criticism, the package also includes a rise in child and married-couples tax allowances. In addition, tax-rate cuts scheduled for 2004 and 2006 would be introduced immediately. "Our first challenge is to allow Americans to keep more of their money so they can spend and save and invest," Bush said.

The President's program, if Congress passes it unchanged, would cost the Treasury $364 billion over the next 10 years in lost taxes on dividends alone. The cost of the cuts as a whole would be $674 billion — more than twice what Bush's allies had expected. Although Bush touted the fact that the average tax bill would shrink by $1,083, almost half of all taxpayers would receive reductions of less than $100, and the average cut for the bottom 80% would be $239, according to the left-leaning Center on Budget and Policy Priorities. The top 1% would get breaks of $24,400 on average. "You have to give tax cuts to the people who pay taxes," argues House Majority whip Roy Blunt. Most of the benefits would kick in around election time, 18 months from now. Should the stock market bounce back and unemployment fall by that time too, Republicans believe that voters won't care if the rich get richer — as long as they do too.

Democrats, who have their own, more modest program, remain critical: "This is the most reckless policy I have seen pursued by any President in my adult life," fumed Kent Conrad of North Dakota, the ranking Democrat on the Senate Budget Committee. Reckless or not, the plan is likely to move rapidly through the House of Representatives, where the Republicans are comfortably in control. The Senate will be tougher, since moderate Republicans also worry about the size of the cuts. The result is likely to be a scaled-back bill, finalized this summer. But that's how Bush is playing it: scaling back from $674 billion gives him plenty of room to maneuver.

THE NETHERLANDS
Fortuyn Lives
The ghost of murdered conservative leader Pim Fortuyn looms large over the run-up to the Netherlands' Jan. 21 general election. In campaigning, many centrist politicians have adopted his controversial positions on issues like immigration, crime and education. Freedom and Democracy Party leader Gerrit Zalm has embraced the notion that the country can no longer take in immigrants: "The Netherlands is full," he now says in his speeches. Social Democrat leader Wouter Bos is doing a more effective Fortuyn impersonation — "Only Dutch to be taught in our schools" — and is leading in the polls. Ironically, Fortuyn's own party, the List Pim Fortuyn, is faring badly. But as his once-radical ideas turn into the conventional political wisdom, Fortuyn is emerging a posthumous winner. "It's as if Fortuyn weren't dead — he might as well still be here," says Amsterdam-based media consultant Joop Nederstigt. — By Andrew Rosenbaum/Amsterdam

BRAZIL
Misery's Road Trip
On his first official trip, newly elected President Luiz Inacio Lula da Silva took 29 members of his cabinet to Vila IrmãDulce in the northeastern state of Piauí, the second-poorest in Brazil, to witness what he called "absolute poverty." Lula — as the President is universally known — has made eradicating the malnutrition that afflicts 54 million Brazilians the top priority of his center-left government. Dubbed "the caravan of misery," the trip made good on Lula's election promise to take his ministers to see the suffering of the country's rural areas at first hand. Seemingly oblivious to the blazing sun, the Workers' Party leader hugged locals and stopped off in half a dozen mud homes to speak with the families living there. All the mothers he spoke with raise their children alone, on incomes far below the minimum wage. Few have the means to provide basic necessities like food, let alone pay for running water or schooling. "This is a practical demonstration of the importance of our commitment to fight inequality," said Sports Minister Agnelo Quieroz, one of those who accompanied Lula on the first day of the two-day trip. "There are a lot of social indicators that are so shocking that we have become accustomed to them. But we can't not react." — By Andrew Downie/Vila IrmãDulce

FRANCE
Terror Setup
A French-Algerian airport baggage handler, suspected of being a terrorist when he was arrested after weapons and explosives were found in the boot of his car, was released from jail. Police say he was the victim of a setup. Abderazak Besseghir argued that he was being framed by the family of his late wife, a claim substantiated when a witness who told police he saw Besseghir handling the guns in the car park of Charles de Gaulle airport admitted to being part of a plot to implicate him.

GERMANY
Al-Qaeda Arrests
In an apparent breakthrough in the effort to apprehend members of al-Qaeda, German police arrested two Yemeni men in a hotel at Frankfurt airport. The arrests were made at the request of U.S. officials, who suspect the men of being members of the terrorist network. Authorities believe one, Mohammed Ali Ahssan al-Moayyed, is a high-ranking fundraiser for al-Qaeda, though neither is thought to have been directly involved in Sept. 11. Both the U.S. and Yemen have requested extradition, but the Justice Ministry said the men would likely be sent to the U.S.

LITHUANIA
Meet the New Boss
In a surprise election victory, conservative Rolandas Paksas ousted incumbent President Valdas Adamkus by a margin of 55% to 45%. A two-time former Prime Minister who trailed favorite Adamkus in the first round of voting in December, Paksas fought back with a flamboyant campaign. He allayed fears that he would undo Lithuania's E.U. accession agreement, saying he would pursue a policy of stability.

DEMOCRATIC REPUBLIC OF CONGO
Kabila Verdicts
A military court sentenced around 30 people to death for their role in the assassination of President Laurent Kabila, who was shot in January 2001 by one of his bodyguards. The trial was described as unfair by human-rights organizations. Although prosecutors claimed the murder of Kabila — who seized power in 1997 — was a failed coup attempt, the sentences are unlikely to end speculation about the motives behind it. The defendants appealed to his son and successor, current President Joseph Kabila.

RWANDA
Detainees Freed
The first 2,000 prisoners were released under a decree by President Paul Kagame that will free up to 40,000 detainees, including thousands of genocide suspects, in order to ease overcrowding in the country's jails. Attorney General Gerard Gahima said that the decree did not apply to ringleaders of the 1994 genocide — in which an estimated 800,000 people, most of them minority ethnic Tutsis, were slaughtered in a campaign by extremists from the Hutu majority. Those freed would still be tried by community courts. Survivors criticized the move, saying suspects might intimidate witnesses.

NORTH KOREA
Nuclear Dispute
Pyongyang announced that it was withdrawing from the Nuclear Nonproliferation Treaty (NPT) in a major escalation of the crisis surrounding its nuclear activities. It claimed the move was in response to U.S. aggression and also rejected a demand by the International Atomic Energy Agency, the U.N.'s nuclear watchdog, to readmit inspectors expelled last month. Pyongyang is widely suspected of violating the NPT, which bars the development of nuclear weapons. Efforts continued to find a diplomatic solution to the dispute, with Washington offering to hold direct talks with North Korea, but only on the subject of how Pyongyang should dismantle its nuclear program.

CHILE
Graft Scandal Grows
Former Public Works Minister Carlos Cruz, a longtime friend of President Ricardo Lagos, was charged with bribe taking in a growing scandal that has undermined the image of the country as Latin America's least corrupt. Five current ruling-party lawmakers are also facing graft charges, but Lagos denied the scandal constituted a crisis for his center-left government.

MEANWHILE
Hacker Victory
In an embarrassment to the Hollywood studios that brought the case against him, Norwegian teenager Jon Johanssen was acquitted of digital piracy by an Oslo court. Johanssen had developed a program to crack the codes on DVDs that prevent unauthorized copying and posted it on the Internet. The court ruled that he had only used the program to view DVDs he legally owned, and there was no evidence anyone else had used it illegally.