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GOVERNO REABRE LICITAÇÃO PARA A NOVA MARGINAL (Brazil)

Posted by Gilmour Poincaree on January 7, 2009

07/01/2009 – 09h06

Folha Online

PUBLISHED BY ‘BOL’ (Brazil)

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PUBLISHED BY ‘BOL’ (Brazil)

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Posted in BANKING SYSTEMS, BRASIL, CONSTRUCTION INDUSTRIES, DESENVOLVIMENTO SUSTENTÁVEL, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FLUXO DE CAPITAIS, INDÚSTRIA DA CONSTRUÇÃO CIVIL, INDUSTRIAL PRODUCTION, INDUSTRIES, INFRAESTRUTURA - BRASIL, INTERNATIONAL, O SETOR DOS TRANSPORTES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF THE PUBLIC SECTOR, ROAD TRANSPORT, RODOVIAS, RODOVIÁRIO, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

DUPLICAÇÃO DA BR-408 TAMBÉM SERÁ INCLUÍDA NO PAC (Brazil)

Posted by Gilmour Poincaree on December 23, 2008

22/12/2008 – 19h46

Diário de Pernanbuco

PUBLISHED BY ‘DIÁRIO DE PERNAMBUCO’ (Brasil)

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PUBLISHED BY ‘DIÁRIO DE PERNAMBUCO’ (Brasil)

Posted in A PRESIDÊNCIA, BRASIL, CIDADES, COMÉRCIO - BRASIL, CONSTRUCTION INDUSTRIES, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS 2008/2009, FINANCIAL SERVICES INDUSTRIES, FLUXO DE CAPITAIS, INDÚSTRIA DA CONSTRUÇÃO CIVIL, INFRAESTRUTURA - BRASIL, INTERNATIONAL, LUIS INÁCIO LULA DA SILVA, MINISTÉRIO DOS TRANSPORTES, O PODER EXECUTIVO FEDERAL, O SETOR DOS TRANSPORTES, ORÇAMENTO NACIONAL - BRASIL, PROGRAMA DE ACELERAÇÃO DO CRESCIMENTO (PAC), RECESSION, ROAD TRANSPORT, RODOVIAS, RODOVIÁRIO, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

MINISTRA DILMA GARANTE LIBERAÇÃO DE MAIS R$ 50 MILHÕES PARA BR-226 (Brazil)

Posted by Gilmour Poincaree on December 23, 2008

22/12/2008

Diário de Natal

PUBLISHED BY ‘DIÁRIO DE NATAL’ (Brazil)

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PUBLISHED BY ‘DIÁRIO DE NATAL’ (Brazil)

Posted in A CASA CIVIL, A PRESIDÊNCIA, BRASIL, CIDADES, CONSTRUCTION INDUSTRIES, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, EXPANSÃO AGRÍCOLA, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FLUXO DE CAPITAIS, INDÚSTRIA DA CONSTRUÇÃO CIVIL, INDUSTRIES, INFRAESTRUTURA - BRASIL, INTERNATIONAL, LUIS INÁCIO LULA DA SILVA, O PODER EXECUTIVO FEDERAL, ORÇAMENTO NACIONAL - BRASIL, PROGRAMA DE ACELERAÇÃO DO CRESCIMENTO (PAC), RECESSION, ROAD TRANSPORT, RODOVIAS, THE FLOW OF INVESTMENTS | Leave a Comment »

ESTADO ANUNCIA R$ 300 MI PARA PAVIMENTAÇÃO DE RODOVIAS (Brazil)

Posted by Gilmour Poincaree on December 23, 2008

Domingo, 21 de Dezembro de 2008 – 17h30

Do sítio do Governo do Estado da Paraíba

PUBLISHED BY ‘CORREIO DA PARAÍBA’ (Brasil)

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PUBLISHED BY ‘CORREIO DA PARAÍBA’ (Brasil)

Posted in BRASIL, CIDADES, CONSTRUCTION INDUSTRIES, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS 2008/2009, FLUXO DE CAPITAIS, INDÚSTRIA DA CONSTRUÇÃO CIVIL, INDUSTRIAL PRODUCTION, INDUSTRIES, INFRAESTRUTURA - BRASIL, INTERNATIONAL, MACROECONOMY, MINISTÉRIO DOS TRANSPORTES, O PODER EXECUTIVO FEDERAL, O SETOR DOS TRANSPORTES, PROGRAMA DE ACELERAÇÃO DO CRESCIMENTO (PAC), RECESSION, ROAD TRANSPORT, RODOVIAS, RODOVIÁRIO, THE FLOW OF INVESTMENTS | Leave a Comment »

AfDB APPROVES U.S.$ 64 MILLION FOR THREE MAJOR ROAD PROJECTS IN GHANA

Posted by Gilmour Poincaree on December 19, 2008

16 December

2008

SPONSOR WIRE

PUBLISHED BY ‘ALL AFRICA’ (Mauritius)

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PUBLISHED BY ‘ALL AFRICA’ (Mauritius)

Posted in BANKING SYSTEMS, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GHANA, INDUSTRIES, INTERNATIONAL, INTERNATIONAL ECONOMIC ORGANIZATIONS AND FORUMS, RECESSION, ROAD TRANSPORT, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

POWERSTAR IS ASCENDING

Posted by Gilmour Poincaree on December 17, 2008

12 Dec 2008

by Grainne Gilmore – Times Online

PUBLISHED BY ‘THE CAPE BUSINESS NEWS’ (South Africa)

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PUBLISHED BY ‘THE CAPE BUSINESS NEWS’ (South Africa)

Posted in AUTOMOTIVE INDUSTRY, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MINING INDUSTRIES, RECESSION, ROAD TRANSPORT, SOUTH AFRICA, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

QATAR LOOKS TO GROW FOOD IN KENYA -THE GULF STATE HAS JOINED A GROWING LIST OF RICH COUNTRIES THAT WANT TO GROW FOOD IN POOR COUNTRIES

Posted by Gilmour Poincaree on December 5, 2008

Tuesday December 2 2008 16.58 GMT

Xan Rice in Nairobi – guardian.co.uk

PUBLISHED BY ‘THE GUARDIAN’ (UK)

Qatar has asked Kenya to lease it 40,000 hectares of land to grow crops as part of a proposed package that would also see the Gulf state fund a new £2.4bn port on the popular tourist island of Lamu off the east African country.

The deal is the latest example of wealthy countries and companies trying to secure food supplies from the developing world.

Other Gulf states, including Saudi Arabia and the United Arab Emirates, have also been negotiating leases of large tracts of farmland in countries such as Sudan and Senegal since the global food shortages and price rises earlier this year.

The Kenyan president, Mwai Kibaki, returned from a visit to Qatar on Monday. His spokesman said the request for land in the Tana river delta, south of Lamu, in north-east Kenya was being seriously considered.

“Nothing comes for free,” said Isaiah Kabira. “If you want people to invest in your country then you have to make concessions.”

But the deal is likely to cause concern in Kenya where fertile land is unequally distributed. Several prominent political families own huge tracts of farmland, while millions of people live in densely packed slums.

The country is also experiencing a food crisis, with the government forced to introduce subsidies and price controls on maize this week after poor production and planning caused the price of the staple “ugali” flour to double in less than a year.

Kibaki said that Qatari Emir Sheikh Hamad bin Khalifa al-Thani was keen to invest in a second port to complement Mombasa, which serves as a gateway for goods bound for Uganda and Rwanda and is struggling to cope with the large volumes of cargo.

By building docks in Lamu, Kenya hopes to open a new trade corridor that will give landlocked Ethiopia and the autonomous region of Southern Sudan access to the Indian Ocean. Kabira said that if the financing was agreed, construction of the port would begin in 2010.

Qatar, which has large oil and gas revenues, imports most of its food, as most of its land is barren desert and just 1% is suitable for arable farming. It has already reportedly struck deals this year to grow rice in Cambodia, maize and wheat in Sudan and vegetables in Vietnam.

Much of the produce will be exported to the Gulf. Qatar’s foreign ministry in Doha did not return calls today, but Kabira said that its intention was to grow “vegetables and fruit” in Kenya.

The area proposed for the farming project is near the Tana river delta where the Kenyan government owns nearly 500,000 hectares (1.3m acres) of uncultivated land.

But a separate agreement to allow a local company to grow sugarcane and build a factory in the area has attracted fierce opposition from environmentalists who say a pristine ecosystem of mangrove swamps, savannah and forests will be destroyed.

Pastoralists, who regard the land as communal and rear up to 60,000 cattle to graze in the delta each dry season, are also opposed to the plan.

“We will have to ensure that this new project is properly explained to the people before it can go ahead,” said Kabira.

The sudden rush by foreign governments and companies to secure food supplies in Africa has some experts worried. Jacques Diouf, director general of the UN’s food and agricultural organisation (FAO), recently spoke of the risk of a “neo-colonial” agricultural system emerging.

The FAO said some of the first overseas projects by Gulf companies in Sudan, where more than 5 million people receive international food aid, showed limited local benefits, with much of the specialist labour and farming inputs imported.

A deal struck last month by Daewoo Logistics and Madagascar to grow crops on 1.3m hectares of land also attracted strong criticism. While the South Korean firm has promised to provide local jobs and will have to invest in building roads and farming infrastructure, it is paying no upfront fee and has a 99-year lease.

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in 'DOHA TALKS', AGRICULTURE, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FARMING SUBSIDIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOOD PRODUCTION (human), FOREIGN POLICIES, FRUITS AND FRESH VEGETABLES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, KENYA, MACROECONOMY, NATIONAL WORK FORCES, QATAR, REGULATIONS AND BUSINESS TRANSPARENCY, ROAD TRANSPORT, SOUTH KOREA, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, THE UNITED NATIONS, THE WORK MARKET, THE WORKERS, TRANSPORT INDUSTRIES, WATER | Leave a Comment »

ECONOMIC STIMULUS PLANS SPRING UP AROUND WORLD

Posted by Gilmour Poincaree on December 3, 2008

Published Tuesday, December 2, 2008

THE WASHINGTON POST

PUBLISHED BY ‘THE OMAHA WORLD-HERALD’ (USA)

WASHINGTON — In a bid to jump-start the beleaguered global economy, countries around the world are introducing massive public spending programs aimed at creating millions of jobs, boosting the use of green energy and modernizing infrastructure in a way that could transform urban and rural landscapes.

The viability of some of the plans remains unclear. But observers say the number of countries moving in tandem underscores the perceived severity of the coming global recession and the view that governments must at least temporarily pick up the slack as the hard-hit private sector sheds jobs and cuts spending.

It is time “to invest massively in infrastructure, in research, in innovation, in education, in training people, because it is now or never,” French President Nicolas Sarkozy said in a recent public address.

World leaders are pursuing various strategies to tame the economic crisis, including moves to unclog credit markets, strengthen financial institutions and ease monetary policy. But fiscal stimulus packages, in particular, have emerged as a favorite tool of policymakers.

Worldwide, economists say, the increase in public spending, if executed wisely, could add as much as 1 percent or 2 percent to global growth next year, perhaps easing recessions in the United States, Europe and Japan while cushioning the slowdown in the developing world, which until recently had seen red-hot growth.

Yet if the promise of combating a global recession with public funds is big, so too, experts say, is the danger that billions worth of taxpayers dollars could be spent in vain.

Analysts point out that the pitfalls of growth-by-spending were exposed by Japan, which launched a huge infrastructure program in the 1990s. To spur expansion after stock market and real estate crashes, the Tokyo government spent billions on new public works projects.

Those projects not only failed to prevent a decadelong economic slump but also produced a herd of white elephants that included new, but little-used, airports and ports, as well as a $250 million bridge to Kourijima Island. Population: 361.

“There is a huge danger of bridges to nowhere, and as Japan showed us, that is no way to get out of a recession,” said Grant Aldonas, a former high-level Bush administration trade official and a senior fellow at the Center for Strategic and International Studies.

While China and Japan enjoy a surplus of reserves, spending increases will drive the United States, Britain and many other European countries deeper into debt. The cost of raising cash on world markets by some rich nations, such as Ireland, has surged as investors grow increasingly skeptical of their fiscal health, limiting their options to spend more now.

“In normal times, we would be telling countries, ‘Please reduce your debt,'” said Olivier Blanchard, chief economist at the International Monetary Fund, which has taken the unusual step of calling on nations to raise public spending by 2 percent of gross domestic product to combat a global recession. “But these are not normal times.”

A snapshot of how governments plan to increase spending is emerging. Those plans include not only the building of more bridges and roads but also the introduction of measures to put more cash into the hands of strapped consumers.

In the United States, the Federal Reserve and Treasury Department have moved to boost consumer spending and lower home mortgage rates, committing as much as $800 billion to make it easier for Americans to borrow money for cars, tuition and homes.

The British said they would slash the national sales tax from to 15 percent from 17.5 percent. The Germans are set to offer temporary tax incentives to consumers buying cars or renovating homes. The Japanese are giving out cash rebates to taxpayers.

Some of the projects being proposed are pre-existing infrastructure plans that are being accelerated. Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, estimates that only about half the “new projects” in Beijing’s $586 billion package amount to previously unplanned spending. “But that is still a great deal of money,” Lardy said.

A number of countries are gearing up for projects that offer long-term benefits, both economic and environmental.

In a move that may offer a guide to helping the ailing Big Three automakers in Detroit, the French are in the early stages of plans to assist their hard-hit auto industry by awarding government grants to boost research into hybrid and battery-power technology.

In comments last week, president-elect Barack Obama suggested that an expansion of wind and solar power generation would be part of his stimulus plans. Obama also cited a plan being circulated by environmental groups that would offer government loans to help schools update their heating and cooling systems, creating quick construction jobs and stimulating demand for building materials.

“I think the fervor in which (the Obama team) is seeking suggestions right now tells me that this kind of spending is something they are very serious about,” said Carl Pope, executive director the Sierra Club.

Some countries in Europe, such as Germany, appear more concerned about overspending. That is at odds with the leadership in France, where Sarkozy has seen the crisis as an opportunity to boost the role of government.

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PUBLISHED BY ‘THE OMAHA WORLD-HERALD’ (USA)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), BIOFUELS, CENTRAL BANKS, CHINA, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FRANCE, GERMANY, HOUSING CRISIS - USA, IMF, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INTERNATIONAL, JAPAN, MACROECONOMY, MARITIME, NATIONAL WORK FORCES, RAILWAY TRANSPORT, RECESSION, ROAD TRANSPORT, SOLAR, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, UNITED KINGDOM, USA | Leave a Comment »

CHINA SHARES UP AS ROAD-BUILDING PLANS REVEALED

Posted by Gilmour Poincaree on November 27, 2008

Published: Nov 26, 2008 03:44 AM

The Associated Press

SHANGHAI, China – China’s shares edged up Wednesday for the first time in five sessions, led by In July 7, 2008 photo, an investor looks at a stock price board at a private securities' company in Shanghai, China. Chinese shares fell sharply Friday, Aug. 8, 2008, on heavy selling of airlines and other market heavyweights, as investors and analysts puzzled over why expectations of a rally linked to the Beijing Olympic games never materialized. The benchmark Shanghai Composite Index sank 4.5 percent, or 122.81 points, to 2,605.16. The Shenzhen Composite Index of China's smaller, second market dropped 5.6 percent to 74transportation and steel stocks after the government announced road-building plans under a stimulus package.

The benchmark Shanghai Composite Index ended up 0.5 percent, or 9.17 points, to close at 1897.88. The Shenzhen Composite Index for China’s smaller second exchange rose 0.6 percent to 535 points.

Trading was thin, reflecting the market’s search for direction after a rally – prompted by Beijing’s Nov. 9 announcement of its stimulus package – faded, analysts said.

“If the policies become clearer, the euphoria could continue,” said Huang Xiangbin, an analyst for Cinda Securities.

Stocks in toll road operators and steel makers rose after the Ministry of Transport said it would spend 1 trillion yuan ($146 billion) on building highways and rural roads as part of the stimulus.

The package is meant to help shield China from the global downturn by pumping money into the economy through higher spending on construction, tax cuts and aid to the poor.

Guangxi Wuzhou Communications Ltd. advanced by the daily limit of 10 percent to 4.62 yuan, while Jiangxi Ganyue Expressway Co. jumped 2.9 percent to 8.15 yuan.

Steel stocks rose after iron ore supplier BHP Billiton Ltd. dropped its bid for rival Rio Tinto Group, which eased concerns that a tie-up would give the mining group too much leverage to raise prices.

Baoshan Iron & Steel Ltd., China’s biggest steel maker, gained 3.9 percent to 5.02 yuan. Anshan Iron and Steel Group rose 6 percent to 7.1 yuan.

Real estate stocks rose on expectations of a possible interest rate cut, despite comments by a central bank deputy governor who said the current level is appropriate.

China Vanke Ltd., the country’s biggest developer, climbed 3.7 percent to 6.8 yuan, and rival Poly Real Estate Group rose 2.6 percent to 17.38 yuan.

In currency markets, China’s yuan weakened to 6.8282 to the U.S. dollar in over-the-counter trading around 0800 GMT, down from Tuesday’s close of 6.8220.

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PUBLISHED BY ‘THE NEWS & OBSERVER’ (USA)

Posted in CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, ROAD TRANSPORT, STOCK MARKETS, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

WORLD BANK TO LOAN ANGOLA $1B

Posted by Gilmour Poincaree on November 22, 2008

Nov 20, 2008 1:35 AM

The World Bank will loan an estimated $1 billion to Angola between 2009 and 2013 to help the oil-rich WORLD BANK LOGOAfrican nation diversify its economy, the World Bank’s director for Angola said.

“Between June of 2009 and June of 2013 we will make available an estimated $1 billion in loans to the Angolan government to help diversify the economy away from oil,” Alberto Chueca told Reuters.

“Angola is beginning to diversify its economy, but it still has a long way to go,” he added.

Angola rivals Nigeria as sub-Saharan Africa’s largest petroleum producer, with oil making up over 80 percent of the southwestern African nation’s exports and a projected 58 percent of gross domestic Secretary-General with Joao Bernanrdo de Miranda FM Angolaproduct in 2008, according to the World Bank.

Angola’s government, however, is keen to boost investment and production in non-oil sectors, including agriculture and banking, as it rebuilds an economy shattered by a 27-year civil war.

Luanda has received billions in oil-backed loans and credit from China to help rebuild ports, railways, roads and other infrastructure damaged by the conflict, which ended in 2002.

Source: Reuters

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PUBLISHED BY ‘ONE NEWS – TVNZ’ (New Zealand)

Posted in AGRICULTURE, ANGOLA, BANKING SYSTEMS, CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, FUELS, INDUSTRIES, INTERNATIONAL, MARITIME, PETROL, RAILWAY TRANSPORT, ROAD TRANSPORT, THE FLOW OF INVESTMENTS, WORLD BANK | Leave a Comment »

GOODYEAR TO STOP PRODUCTION FOR ONE WEEK (Luxembourg)

Posted by Gilmour Poincaree on November 22, 2008

21-NOV-08

GOODYEAR Goodyear in Colmar-Berg have announced that they will stop CHARLES GOODYEARproduction of truck tyres for next week, according to local media reports.

It is understood that the decision was taken due to a slump in the demand for truck tyres as fewer trucks are being purchased.

The new follows recent stoppages of production at week-ends.

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PUBLISHED BY ‘STATION’ (Luxembourg)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, LUXEMBOURG, RECESSION, ROAD TRANSPORT, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, TRANSPORT INDUSTRIES | Leave a Comment »

INDIA’S NEW RURAL ROADS MAY BUFFER ECONOMY FROM WORLD RECESSION

Posted by Gilmour Poincaree on November 19, 2008

November 19, 2008

by Cherian Thomas

Nov. 19 (Bloomberg) – The 100 kilometers (62 miles) of roads India is adding each day may save RURAL ROAD - INDIAAsia’s third-largest economy from the worst of a global recession.

New roads built so far under the $27 billion program have brought urban markets within reach of 60 million village dwellers over the past five years, letting them earn money selling fruits, vegetables and milk that would have spoiled otherwise. They are now spending their cash just as the world economy falters.

“Rural demand is keeping the economy kicking along,” said Shashanka Bhide, chief economist at the privately funded National Council of Applied Economic Research in New Delhi. “Growth will slow in India, but not as dramatically as the rest of the world.”

Some of India’s biggest companies are already benefiting: shares of Hindustan Unilever Ltd., the biggest maker of household products, and Hero Honda Motors Ltd., India’s largest motorcycle maker, are up this year while the benchmark stock index has plunged 56 percent. Domestic spending will help cushion India from the worst global meltdown since the Great Depression, according to the Reserve Bank of India.

When the roads program is completed in two years, every village with 1,000 or more inhabitants will RURAL ROAD - INDIA - UDAIPUR HIGHWAYhave access to all-weather roads, up from 40 percent when construction started in 2003. Spending on the project, run by the National Rural Roads Development Agency, was worth about 5 percent of gross domestic product when it was announced.

More to Come

Even at its current pace of investment, India still needs to spend more to buoy growth. The South Asian nation requires $100 billion annual investments in its highways, railways, power systems, ports and other infrastructure for the next five years, according to the government. Inadequate capacity shaves two percentage points off the nation’s growth each year, the finance ministry estimates.

Rural connectivity is increasing people’s income and adding to domestic consumption, which makes up 55 percent of India’s economy, compared with 37 percent of gross domestic product in China.

Hazari Lal Negi, 55, a farmer in the northern Indian state of Himachal Pradesh, says this year’s crop of cabbages, potatoes, beans and cauliflower was his first not to perish on the way to market because of lack of transport.

“Earlier, we would have to haul our produce and walk all night to the nearest town to catch the early RURAL ROAD - INDIAmorning trucks,” Negi said. “We could sell only about a quarter of our produce and the rest got wasted. Now, we sell everything.” Negi plans to expand into organic farming to boost his income.

`Consumer Boom’

“New markets are opening up for our products,” said Pranay Dhabhai, chief operating officer at Haier Appliances (India) Ltd., the local unit of China’s biggest home appliances maker. “People’s aspirations levels are rising with higher incomes. There’s a huge consumer boom waiting to happen because penetration levels are so low in India.”

Haier, which opened its first factory in India last year, estimates that only 19.6 percent of Indian households have refrigerators, 27 percent own television sets and just 3 percent of homes have air-conditioners installed.

Sanjeev Chadha, chief executive officer of PepsiCo Inc.’s India unit, said the September-October period “has been one of the best ever” for sales.

“Buying power is coming,” said Joerg Mueller, head of India operations for Volkswagen AG, which is RURAL ROAD - INDIA - TRUCK STOPbuilding a 580 million euro ($730 million) car factory in the western Indian city of Pune. “We are optimistic and happy to be here. We see a very positive future.”

Cushioning the Slowdown

The International Monetary Fund expects India’s economic growth to slow to 6.3 percent in 2009 from an estimated 7.8 percent this year. That’s still faster than the South Asian nation’s average 4.5 percent expansion since 1947.

China may grow 8.5 percent in 2009, compared with 9.7 percent this year, according to the IMF. The U.S. and the Euro area may shrink by 0.7 percent and 0.5 percent in 2009, the Washington-based lender said.

“Overall, India is still poised to rank as the second- fastest growing major economy after China,” said Rajeev Malik, regional economist at Macquarie Group Ltd. in Singapore. “Consumption expenditure is poised to be resilient, but investment spending will be hit owing to scarce availability and higher cost of funding.”

Even though India has a domestic consumption-led economy, its growth may be hampered by slower RURAL ROAD - INDIA - MALSHEJ GHAT ROADinvestments by companies as borrowing options dry up in a global recession.

Lending Slips

Investor appetite in the stock market has waned, with overseas funds selling a record $12.7 billion of equities this year. Foreign lenders are shying away from emerging markets like India, as Europe and Japan last quarter slipped into recession.

The rural roads program is financed by the federal government using revenue from an additional tax imposed on the sale of diesel.

“India can’t be fully insulated from what’s happening in the rest of the world,” said Rajat Nag, managing director at the Manila-based Asian Development Bank. “Infrastructure financing will be tight for a while.”

Nag said India’s banks are well capitalized and can afford to step up lending. They have just $1 billion of toxic Western assets out of a total loan portfolio of $510 billion, according to the central bank. The global credit crunch has seen financial institutions around the world write off or lose $965.8 billion.

To stimulate investments, India’s central bank has slashed lenders’ reserve requirement in cash and bonds by 3.5 percentage points and one percentage point respectively and cut interest rates by 1.5 percentage points in the past month.

“India is connected with the global crisis, but not as severely as other Asian countries,” said K.V. Kamath, chief executive officer of ICICI Bank Ltd., the nation’s second- biggest. “We will have to get back to the consumers to get India back on a higher growth path.”

To contact the reporter on this story: Cherian Thomas in New Delhi

Last Updated: November 18, 2008 13:43 EST

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PUBLISHED BY ‘BLOOMBERG’

Posted in AGRICULTURE, ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INDUSTRIES, INTERNATIONAL, MACROECONOMY, ROAD TRANSPORT, TRANSPORT INDUSTRIES | Leave a Comment »