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ASIAN MARKETS GAIN AFTER US HOUSE PASSES STIMULUS BILL; EUROPE OPENS DOWN

Posted by Gilmour Poincaree on January 29, 2009

January 29, 2009 – 3:45 AM

by Stephen Wright – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

BANGKOK, Thailand – Asian markets advanced Thursday, with Hong Kong jumping 4.6 percent in a catch-up rally, as the U.S. House of Representatives approved a $819 billion stimulus bill that investors hope will help lift the American economy out of its worst crisis in decades. European markets opened lower.

Japan’s Nikkei 225 stock average rose 144.95 points, or 1.8 percent, to 8,251.24 even as new data showed that retail sales in the world’s second-largest economy sank the most in nearly four years in December.

Hong Kong’s Hang Seng leaped 575.83 points, or 4.6 percent, to 13,154.43 after being closed for three days for the Lunar New Year. Mainland China’s markets are closed all week. South Korea’s Kospi gained 0.7 percent and Australia’s main index rose 0.9 percent.

Sentiment in Asia got a boost as President Barack Obama’s massive stimulus package moved closer to becoming a reality.

The Democratic-controlled House of Representatives approved the bill Wednesday night, sending it to the Senate where debate could begin as early as Monday. Democratic leaders have pledged to have legislation ready for Obama’s signature by mid-February.

“The U.S. stimulus package has a positive psychological impact on markets globally,” said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong.

“But there is still going to be bad news in the form of profit warnings and unemployment,” he said. “The unemployment rate is going to continue to climb, making U.S. consumers even more hesitant about spending.”

As trading got underway in Europe, major bourses fell with France’s CAC-40 off 1.1 percent, Germany’s DAX down 1 percent and Britain’s FTSE 100 slipping 1.1 percent.

U.S. stock index futures were down, suggesting Wall Street would open lower Thursday. Dow futures were down 87 points, or 1.1 percent, at 8,235 and S&P500 futures were off 8.6 points, or 1 perc(AP) — ent, at 862.90.

Financial stocks led Asia’s advance Thursday, buoyed in part by hopes of new U.S. efforts to trim bad debt and spur lending.

In Hong Kong, banking giant HSBC jumped 8.4 percent and China’s top lender, Industrial & Commercial Bank of China Ltd., or ICBC, added 5 percent.

In Tokyo, megabank Sumitomo Mitsui Financial Group soared 13 percent, Mitsubishi UFJ jumped 4.8 percent and Mizuho added 5.2 percent.

Japanese exporters such as Sony and Toshiba reported weak quarterly results after the market closed.

Sony Corp.’s net profit tumbled 95 percent in the October-December quarter, as the global slump hurt sales of its core electronics products, while Toshiba Corp. sank into the red in the third quarter and expects a loss for the full year.

Elsewhere, New Zealand’s benchmark index was up 0.8 percent after the central bank slashed its key interest rate by 1.5 percentage points to 3.5 percent to prevent the country’s recession from deepening.

Oil prices slipped below $42 a barrel as rising U.S. crude inventories offset expectations the U.S. stimulus package will revive growth and consumer demand. Light, sweet crude for March delivery was down 34 cents to $41.82 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange.

In currency trading, the dollar fell to 90.02 yen from 90.41 late Wednesday in New York, while the euro declined to $1.3044 from $1.3139.

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PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, HONG KONG, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, RECESSION, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STOCK MARKETS, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, THE PRESIDENCY - USA, THE WORK MARKET, UNEMPLOYMENT, UNITED KINGDOM, USA | Leave a Comment »

ASIAN MARKETS BOUNCE HIGHER AS BANK OF JAPAN TO EASE LIQUIDITY

Posted by Gilmour Poincaree on January 23, 2009

22 Jan 2009 – 05:28 AM ET

CNBC.com

PUBLISHED BY ‘CNBC’

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PUBLISHED BY ‘CNBC’

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, PUBLIC SECTOR AND STATE OWNED ENTERPRISES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, RESTRUCTURING OF THE PUBLIC SECTOR, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

ASIAN STOCKS UP DESPITE SIGNS OF DEEPENING SLUMP

Posted by Gilmour Poincaree on January 22, 2009

22 Jan 2009, 0956 hrs IST

AGENCIES

PUBLISHED BY ‘ECONOMIC TIMES’ (India)

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PUBLISHED BY ‘ECONOMIC TIMES’ (India)

Posted in ASIA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

YUCHENGCOS SELL PACIFIC PLANS FOR P250M (Philippines)

Posted by Gilmour Poincaree on January 20, 2009

12:25:00 01/20/2009

by Doris Dumlao – Philippine Daily Inquirer

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

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PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

Posted in ASIA, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PETROL, PHILIPPINES, RECESSION, REFINERIES - PETROL/BIOFUELS, REGULATIONS AND BUSINESS TRANSPARENCY, RESTRUCTURING OF PRIVATE COMPANIES, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

OIL HIGHER IN ASIA ON OPEC CHIEF’S COMMENTS – OPEC SAYS PREPARED FOR ‘FURTHER MEASURES’ TO SHORE UP CRUDE PRICES AFTER REVIEWING MARKET

Posted by Gilmour Poincaree on January 16, 2009

2009-01-14

Middle East Online

PUBLISHED BY ‘THE MIDDLE EAST ONLINE’

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PUBLISHED BY ‘THE MIDDLE EAST ONLINE’

Posted in ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, OPEC, PETROL, RECESSION, REFINERIES - PETROL/BIOFUELS | Leave a Comment »

ASIAN MARKETS RISE ON BARGAIN HUNTING

Posted by Gilmour Poincaree on January 16, 2009

January 15, 2009 Thursday – Muharram 17, 1430

by Anne Seith and Jörn Sucher

PUBLISHED BY ‘DAWN’ (Pakistan)

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

ECONOMISTA PREGA PROTECIONISMO PARA DESENVOLVIMENTO DE PAÍSES POBRES

Posted by Gilmour Poincaree on January 14, 2009

12 de Janeiro de 2009 – 23h53

Vinicius Konchinski – Repórter da Agência Brasil

PUBLISHED BY ‘AGÊNCIA BRASIL’

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PUBLISHED BY ‘AGÊNCIA BRASIL’

Posted in AFRICA, ASIA, BALANÇA COMERCIAL, BRASIL, CENTRAL AMERICA, COMÉRCIO - BRASIL, COMMERCE, COMMERCIAL PROTECTIONISM, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS 2008/2009, FLUXO DE CAPITAIS, FOREIGN POLICIES, INDÚSTRIAS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, LATIN AMERICA, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH AMERICA, STATE TARIFFS, THE FLOW OF INVESTMENTS | Leave a Comment »

ASIA THE PERFECT FIT FOR QANTAS – AFTER THE TERMINATION OF AN $8 BILLION MERGER PROPOSAL WITH BRITISH AIRWAYS LAST MONTH, SPECULATION HAS RESURFACED THAT QANTAS HAS TURNED ITS ATTENTION TO ASIA AND IS LOOKING INTO A TIE-UP WITH ASIA’S BIGGEST BUDGET AIRLINE, MALAYSIAN-BASED AIRASIA, OR MALAYSIA AIRLINES (Australia)

Posted by Gilmour Poincaree on January 10, 2009

January 10, 2009

by Adele Ferguson – The Australian

PUBLISHED BY ‘THE AUSTRALIAN’

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AIR TRANSPORT INDUSTRY, ASIA, AUSTRALIA, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

OPPORTUNITIES FOR ASIA EXIST IN GLOBAL CRISIS (Philippines)

Posted by Gilmour Poincaree on January 10, 2009

Saturday, January 10, 2009

by Euan Paulo C. Añonuevo – Reporter

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

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PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PHILIPPINES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

IRAN AND KUWAIT TO DEEPEN OIL SUPPLY CURBS TO ASIA

Posted by Gilmour Poincaree on January 7, 2009

Wednesday January 7, 2009

Associated Press-Wire

PUBLISHED BY ‘THE STAR'(Malaysia)

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PUBLISHED BY ‘THE STAR'(Malaysia)

Posted in ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, IRAN, KUWAIT, PETROL, RECESSION | Leave a Comment »

ASIAN MARKETS EXTEND GAINS TUESDAY, NIKKEI UP 0.4%

Posted by Gilmour Poincaree on January 7, 2009

Tuesday January 6, 2009

Associated Press-Wire

PUBLISHED BY ‘THE STAR'(Malaysia)

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PUBLISHED BY ‘THE STAR'(Malaysia)

Posted in ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

ASIAN STOCKS BEGIN YEAR WITH STRONG GAINS

Posted by Gilmour Poincaree on January 7, 2009

Tuesday, 06 Jan, 2009 – 10:21 AM PST

PTI

PUBLISHED BY ‘DAWN’ (Pakistan)

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in ASIA, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

ASIAN MARKETS GAIN, LED BY HIGHER ENERGY STOCKS

Posted by Gilmour Poincaree on December 31, 2008

Tue, Dec. 30, 2008

by Stephen Wright – The Associated Press

PUBLISHED BY ‘PHILLY.COM’ (USA)

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PUBLISHED BY ‘PHILLY.COM’ (USA)

Posted in ASIA, CHINA, COMMERCE, COMMODITIES MARKET, DIGITAL INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ELECTRIC / ELECTRONIC INDUSTRIES, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, NATURAL GAS, PETROL, PHILIPPINES, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

EUROPEAN AND ASIAN STOCKS GAIN, LED BY ENERGY SHARES

Posted by Gilmour Poincaree on December 29, 2008

December 29, 2008

by by Matthew Saltmarsh

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

Posted in ASIA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

WORLD MARKETS MIXED AFTER GLOOMY US ECONOMIC DATA

Posted by Gilmour Poincaree on December 25, 2008

Thursday December 25, 2008

Associated Press

PUBLISHED BY ‘THE STAR’ (Malaysia)

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PUBLISHED BY ‘THE STAR’ (Malaysia)

Posted in ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

BG EXEC LEAVES AFTER REVIEW OF SHARE DEALINGS – The head of BG Group’s Asian, African and Middle Eastern operations has left the company after an internal investigation found he committed “serious errors of judgment” in relation to his share dealings

Posted by Gilmour Poincaree on December 25, 2008

December 24, 2008

by Ross Kelly – Dow Jones

PUBLISHED BY ‘THE AUSTRALIAN’

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AFRICA, ASIA, AUSTRALIA, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, MIDDLE EAST, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

CONERGY, GE TO POUR $250M INTO ASIA-PACIFIC CLEAN POWER

Posted by Gilmour Poincaree on December 17, 2008

December 15, 2008

by David Ehrlich – GigaOm

PUBLISHED BY ‘THE NEW YORK TIMES’

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PUBLISHED BY ‘THE NEW YORK TIMES’

Posted in AEOLIC, ASIA, BIOFUELS, BIOMASS, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, NATURAL GAS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOLAR, STOCK MARKETS, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

SKOREA, CHINA, JAPAN SHOW UNITY AT FIRST SUMMIT

Posted by Gilmour Poincaree on December 14, 2008

Published: Dec 13, 2008 06:00 AM – Modified: Dec 13, 2008 07:06 AM

by Eric Talmadge – Associated Press Writer

PUBLISHED BY ‘THE NEWS&OBSERVER’ (USA)

FUKUOKA, Japan – The leaders of Japan, China and South Korea said Saturday that Asia must be the engine of growth to counter Japan's Prime Minister Taro Aso, center, delivers a speech as Lee Myung-bak, South Korea's president, sitting right, Wen Jiabao, China's premier, sitting left, isten at the start of dinner after their meeting at the Kyushu National Museum in Dazaifu, southern Japan, on Saturday, December 13, 2008. (AP Photo/Tomohiro Ohsumi, POOL)global financial turmoil and vowed to rev up their economies with infrastructure projects and bolster domestic demand.

Tokyo and Seoul also criticized North Korea for stalling denuclearization talks.

The Asian nations – which together make up 75 percent of the east Asian economy – were holding their first-ever three-way summit, with Japanese Prime Minister Taro Aso, South Korean President Lee Myung-bak and Chinese Premier Wen Jiabao attending.

The global financial slowdown was atop their agenda.

“The current financial crisis continues to spread,” Wen said at a joint news conference. “We are important economic players in Asia and the world, and we must strive to respond to this once-in-a-century crisis.”

In a joint statement, the leaders said they believed Asia must be a center of growth to counter the sliding world economy. They said they would push domestic demand and infrastructure projects while refraining from raising new barriers to investment or trade over the next 12 months.

“The three leaders shared the view that efforts need to be strengthened to minimize the negative impacts that the current financial turmoil could have on the world economy,” the statement said. “Asian countries are expected to play a role as the center of world economic growth.”

Meeting ahead of the summit, Aso and Lee welcomed a deal reached the night before to increase a bilateral currency swap arrangement to the equivalent of $20 billion. The Bank of Korea also announced a deal with the People’s Bank of China worth about $26 billion.

“This is very meaningful,” Lee said of the currency swap arrangement. “We translated cooperation into action.”

Swaps generally entail one central bank borrowing a currency from another and offering an equivalent amount of its own as collateral.

Seoul has seen its own currency reserves dwindle and feared that without the swap arrangements it could suffer a foreign exchange crisis because of the global financial turmoil. The South Korean won has declined 32 percent this year amid record selling of South Korean stocks by foreign investors.

Aso and Lee also criticized North Korea for its lack of cooperation at nuclear disarmament talks and stressed the importance of continuing to push together for progress.

Four days of negotiations in Beijing ended in stalemate Thursday with North Korea refusing to put into writing any commitments on inspection, making it impossible to move forward on a disarmament-for-aid agreement reached last year.

“We have made progress but it has been slow,” Lee said. “We must have patience and hope.”

The three leaders said they planned to make the trilateral summit an annual event and strengthen ties through increased political and cultural exchanges.

“Politically and economically, we have a very significant presence in the region,” Aso said. “We should have had this kind of a summit sooner.”

Though their countries are often at odds over the legacy of Japan’s militarist past, solidarity was the word of the day.

Officials said the summit was intended to be a show of unity in the face of the global economic downturn and was an important step toward better relations overall between the three neighbors.

Left off the table was lingering animosity over Japan’s pre-1945 colonization of Korea and its often brutal aggression on the Asian mainland in the first half of the last century. Such issues have frequently flared up in the past and continue to be a thorn in relations.

Japanese officials said it was “significant” that the three countries were putting such issues behind them and trying to approach the summit with a more forward-looking stance.

Other sensitive issues remain, however.

In a meeting with Wen, Aso expressed concern over the entry of Chinese vessels earlier this week into waters Tokyo claims near disputed southern islands known as the Senkaku in Japanese and the Diaoyu in Chinese.

Japan lodged a protest with Beijing on Monday after the ships spent nine hours near the islands, which are claimed by Japan, China and Taiwan.

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PUBLISHED BY ‘THE NEWS&OBSERVER’ (USA)

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, CURRENCIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INTERNATIONAL RELATIONS, JAPAN, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH KOREA, THE FLOW OF INVESTMENTS | Leave a Comment »

WEATHERING THE STORM – Syrians are quickly realising that the impact of the global financial crisis will be larger than first thought. In an age of globalisation, no country is an island

Posted by Gilmour Poincaree on December 13, 2008

Issue: December 2008

by Brooke Anderson

PUBLISHED BY ‘SYRIA TODAY’

Despite government assurances that their country will weather the storm engulfing markets around the world, Syrians are quickly realising that in the 21st century, no country is immune from a global economic meltdown.

“No country can say it’s unaffected,” Samira al-Masalmeh, managing editor of local affairs at the independent Syrian daily newspaper Al-Watan and the economic weekly Al-Iqtissadiya, said. “It’s true, we don’t have direct economic relations with the United States, but the crisis is affecting Europe. We work with Europe and Asia, so there is an indirect effect on Syria.”

Syria will, however, weather the storm better than most countries, Masalmeh said. “For the most part, 70 percent of investment in Syria is from inside the country,” she said. “Syria has a strong and diversified internal economy that doesn’t depend on oil. We don’t have a stock market.”

The global financial crisis, which originated in the US banking system, hits Syria at a time when the country is opening up its economy after more than 40 years of socialist rule. Many in Syria now believe the country needs to quickly learn the lessons emerging from more developed economies now battling recession. “I hope Syria will learn a lesson from America and it will put into place better laws protecting investment,” Masalmeh said.

Far from the epicentre

To date, the Syrian government has taken a cautious view of the crisis. “The Syrian economy is stable and solid and the Syrian pound is strong and protected,” Deputy Prime Minister for Economic Affairs Abdullah al-Dardari said in October. “Syria has an independent banking system. In addition, the Syrian pound has a higher interest rate than other currencies.”

Dardari also said deposits in Syrian banks have increased since the beginning of the crisis because of the stability of the local banking sector. “The government is working day and night for the stability of the economy and to serve the nation and the citizen,” he said, adding there is “no reason at all to be scared or worried”.

Likewise, Syrian Minister of Finance Muhammad al-Hussein has emphasised the limited impact the global financial crisis will have on Syria. “The worldwide financial crisis could have an effect on Syria, but the government- is working with President Bashar al-Assad to make sure the effect is limited,” Hussein told the state daily newspaper Al-Thawra. He said Syria was “far away from the epicentre of the earthquake”.

Indirect impact

One government official striking a different note is Duraid Dargham, head of the government-run Commercial Bank of Syria, the country’s largest bank. In a full-page article published in the Tishreen newspaper in early October, Dargham said the danger posed to Syria by the global financial crisis was real and significant. “The economic crisis will have a big effect on Syria,” he wrote.

Dargham said Syria’s economy would take two main hits. The first will come in a decline in both the price and global demand for oil. Since the crisis erupted, the price of oil has fallen from a record SYP 6,510 (USD 140) per barrel to around SYP 2,557 (USD 55) a barrel and the slide is expected to continue. It’s a drop which could now make growth estimates for 2009 optimistic and will further widen the country’s budget deficit, a fact Hussein pointed out at a recent banking conference.

The second blow will come from remittances from Syrians living abroad who now number a massive 18m; Syria’s internal population is little more than 19m. On average, Syrian expatriates, many of whom earn high wages in the Gulf, inject SYP 37.2bn (USD 800m) annually in remittances into the Syrian economy. With many parts of the world entering recession and unemployment rising, this stream of foreign funds is expected to slow.

Jihad Yazigi, editor of the English-language economic newsletter The Syria Report, said Syria’s links to the Gulf markets make it vulnerable to the ongoing global economic turmoil. “A lot of money comes [to Syria] from the Gulf,” he said. “Some Syrians could be made redundant in the Gulf so we could see a slower pace of remittances and that could lead to more unemployment here.”

Yazigi also points to the possibility of foreign direct investment flows slowing over the next year. Rather than the dramatic blows being landed on the world’s leading economies like the US and Japan, Yazigi said the impact on Syria would come incrementally. “We haven’t seen anything yet, because the impact is indirect,” he said. “It won’t be as dramatic as the price of stocks. It will be an interesting sign if we see the delay of one to two big Gulf investments in Syria. Investors have to prioritise when they want to invest and Syria is not a priority for them. We haven’t felt it yet, but we will. It won’t be a big impact, but there will be an impact.”

Masalmeh points to tourism, an increasingly important money spinner in Syria, as another area likely to be negatively impacted as people around the world tighten their spending habits and cancel overseas holiday plans. “The crisis will affect tourism because there’ll be less money to spend,” she said. “If there’s no money, there’s no tourism.”

Feeling the squeeze

One Syrian company is already seeing the impact of the global financial crisis firsthand. At Muhanna for Sweets, a Damascus-based family sweets business founded in 1935, chief executive officer Mahmoud Muhanna said the global financial crisis could not come at a worse time. The company is already battling the impact of a cut in fuel subsidies which has seen the price of raw materials rise. As a result, the company has had to increase the prices of its goods – 30 to 40 percent for some sweets and 100 percent for others – at a time when foreign buyers in America and Europe are looking to save money. “All of the prices of raw materials – sugar, fat, and pistachios – have increased,” Muhanna said.

Three years ago, exports made up 40 percent of all sales at Muhanna for Sweets. Now they account for just 25 percent of business. Twenty-five percent of total exports go to the US, 5 to 10 percent go to the Gulf, while the rest go to Europe.

Muhanna does not expect any growth in his exports to US and European markets in the short term. As such the Gulf and local market will become all the more important. He said his company has been helped by the steady flow of tourists in the past several years, business travellers from the Gulf and the opening of new hotels such as the Four Seasons. But it’s a customer base that might not be so reliable in the coming months, he admits.

To counter a decline in exports, Muhanna is already thinking of a plan B: creating a line of less expensive sweets. Still, he doesn’t appear to be too worried about the financial turmoil creating a crisis in sweets consumption. “No matter what happens, people always buy Arab sweets,” he said.

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PUBLISHED BY ‘SYRIA TODAY’

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, ISLAMIC BANKS, JAPAN, PETROL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TOURISM INDUSTRIES, USA | Leave a Comment »

ASIA IS A BANKING EL DORADO, SAYS EXPERT

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Richard Gluyas – The Australian

PUBLISHED BY ‘THE AUSTRALIAN’

Asia looms as an El Dorado for major Australian banks in the same way Spanish lenders have enjoyed the fruits of their Latin American expansion, according to consultancy Accenture.

Financial services practice global head Pierre Nanterme said yesterday the big four banks would concentrate on getting their local franchises in order over the next year.

“That means avoiding doing anything stupid, investing in the domestic market and driving their cost-to-income ratios down to 40 per cent,” he said. “In a year’s time, they should have a unique operating model that they can use as an acquisition and integration engine in the region.

“Asia is a new El Dorado, and banks making bets in the region will get the same kind of returns the Spanish banks have from investing in Latin America a decade ago.”

Mr Nanterme, who is in Australia to meet banking leaders, said the global banking landscape had changed irreversibly as a result of the financial crisis.

There would be a select few super-global players, certainly including HSBC, which was coming out of the crisis “even stronger”, and possibly a wounded Citigroup, he said.

Then, in markets such as Britain, France, Germany and Spain, as well as the US, there would be groupings of three or four giants, each with market shares of about 20 per cent.

The Australian banking industry, Mr Nanterme said, had been structured along those lines for some time, and in that sense was ahead of the curve.

However, the opportunity existed for strong domestic players to become super-regional operations, replicating the success of the Spanish bank, Santander, which had acquired Abbey National, and Alliance and Leicester, in Britain.

“I’ve found banking leaders here saying they’d like to be the Santander of Asia, which means dominating your home market first, and from that base developing an industrial model, underpinned with technology, that can be exported to the rest of the world,” Mr Nanterme said.

“They make the comparison with Santander, which has 30 per cent market share in Spain, and a cost-to-income ratio of 50 per cent – very good in Europe.”

A year ago he might have been critical of the reluctance of Australian banks to embrace Asia, the Accenture chief said.

The exception would have been ANZ Bank, with new chief executive Mike Smith already having revealed his plan to create a super-regional bank.

Then the financial crisis had intervened.

“The crisis has forced us all to be a little more humble, but certainly the potential is there in Asia in the medium to long term,” Mr Nanterme said.

“In Europe, the economy will be in recession for the next couple of years, but if you’re a super-regional in Asia, you’re looking at 2-3 per cent growth for the region, minimum.”

Local banks, in the short term, would concentrate more on the cost line than revenue expansion.

This could involve re-engineering the business, investment in software, and improved efficiency of the back office through outsourcing and offshoring of jobs to countries with cheaper labour.

“Banking will become more industrialised, like a manufacturing company,” Mr Nanterme said. “The name of the game is scale, and customers expect a low unit price.”

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in ASIA, AUSTRALIA, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, LATIN AMERICA, OUTSOURCING INDUSTRIES, RECESSION, SPAIN, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

DEUTSCHE POST CEO SEES SHORT RECESSION, ASIA EXPANSION

Posted by Gilmour Poincaree on December 11, 2008

December 11, 2008

Tehran Times Political Desk

PUBLISHED BY ‘TEHRAN TIMES’ (Iran)

SINGAPORE (Reuters) – Deutsche Post chief executive Frank Appel said on Wednesday the firm will continue its Asian expansion and keep job cuts to a minimum outside the United States as it expects a short but sharp global recession.

“We are pretty confident that the recession will be deep but pretty short,” he said, predicting business and consumer confidence can recover as quickly as it had disappeared in recent weeks. “We don’t have to cut too many jobs.”

Appel said that Deutsche Post’s DHL unit, Europe’s largest express courier company, had invested around $2 billion in Asia in recent years, and “we will see similar numbers in coming years”.

DHL last month said it will halt U.S. domestic services and cut 9,500 jobs after failing to gain share in a market dominated by United Parcel Service and FedEx Corp.

FedEx on Monday warned that earnings for its fiscal year ending May 2009 will be lower than expected due to a global economic slump.

Appel, who spoke at a briefing on a global trade study commissioned by DHL, was more bullish about economic prospects, saying he expected the global economy to recover faster than most people thought.

According to the study by the Economist Intelligence Unit, trade between Asia and the West will shrink by about 4 percent in 2009 before recovering in 2010, recovering faster than cross-Atlantic traffic, which will likely remain in the doldrums until 2011.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘TEHRAN TIMES’ (Iran)

Posted in ASIA, COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, GERMANY, INTERNATIONAL RELATIONS, IRAN, MACROECONOMY, RECESSION, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

WHERE HAVE ALL YOUR SAVINGS GONE? – INVESTORS MAY DRAW THE WRONG LESSON FROM HISTORY

Posted by Gilmour Poincaree on December 11, 2008

Dec 4th 2008

From The Economist print edition

PUBLISHED BY ‘THE ECONOMIST’

For American and European savers it has been a lost decade. After two booms and two busts, stockmarkets have earned them nothing, or less, in the past ten years. Low interest rates have made bonds and bank deposits unrewarding too. Were it not for the tax relief they receive, contributors to personal pension plans would have been better off keeping their money under their mattresses. It will be little consolation to Westerners that savers in Japan have known this empty feeling for far longer.

This year’s figures are enough to put anybody off saving. American mutual-fund assets have declined by $2.4 trillion—a fifth of their value—since the start of 2008; in Britain, the drop is more than a quarter, or almost £130 billion ($195 billion). The value of global stockmarkets has shrunk by maybe $30 trillion, or roughly half. These figures put the losses on credit-related securities—where the financial crisis began—into the shade.

Nor has the bad news been confined to equities. This year the value of all manner of risky investments, from corporate bonds to commodities to hedge funds, has been clobbered. The belief that diversification into “alternative assets” could prevent investors losing money in bear markets has proved false. And of course housing, which many people counted on for their retirement nest-eggs, has lost value too (see article).

As a result, saving seems like pouring money into a black hole (see article). Any American who has diligently put $100 a month into a domestic equity mutual fund for the past ten years will find his pot worth less than he put into it; a European who did the same has lost a quarter of his money.

Save your cake and eat it

It may seem an odd time to worry about savings. This week the National Bureau of Economic Research declared that the world’s largest economy, America, had been in recession since December last year. The economies of Japan and much of western Europe have been shrinking. A rapid, global, private-sector shift to thrift is exactly what the world economy does not need. That’s why governments around the world have been passing hurried measures to try to encourage people to spend more of their incomes.

In some countries, they should. Asians (and Germans too — see article), have been squirrelling their money away with excessive enthusiasm. But other countries’ citizens have been putting too little aside for their old age. In America, the household savings ratio (the proportion of disposable income not used for consumption) has been below 2.5% since 1999; in Britain, it has been below 3% in each of the past two years. The Asians’ parsimony made the Anglo-Saxons’ profligacy possible. Through their increasingly sophisticated financial systems, the Americans and British were able to borrow from the thrifty Asians to finance their spending spree. And, because their house prices were rising so fast, they had the collateral and the confidence to do so.

In other words, Anglo-Saxons were able to save their cake and eat it. They did not have to sacrifice consumption in order to build up assets for the future, because lax monetary policies encouraged borrowing that pushed up the prices of housing and other assets, which gave them the illusion of having saved enough. But now this debt burden is being unwound, asset prices are collapsing and savings rates are rising because consumers are unwilling, or unable, to borrow.

Though this is bad news for the American and British economies in the short term, it ought to be good news in the long term. How good, though, depends as much on where people put their savings as on how much they put aside.

Careless caution

If savers treated financial assets as they do other goods, they would sell them when they are expensive and buy them when they are cheap. Actually, they do the opposite. They piled into the market in 1999-2000, at the peak, and are piling out of it now. They should, of course, have got out in 2000, when the global price-earnings ratio was 35; shares look relatively much more attractive now, since the ratio is down to ten. A recent analysis shows that, when American price-earnings ratios are low, returns on equities over the next decade average 8%; when they are high, returns average 3%.

But people’s recent losses have made them cautious. They are putting their money into cash or money-market funds, rather than equities or corporate bonds. The returns they are getting on their savings look increasingly pitiful. Interest rates are falling sharply, with more central banks announcing cuts this week. Savers may initially be shielded from the full impact of those reductions, because commercial banks are competing for retail deposits. But rates in many big economies are heading for, or have already reached, 1-2%.

Caution is understandable, after the trauma of this year. Equity and corporate bond markets could yet fall further, especially as the news on the economy seems to get worse every week. But it is still perverse that investors were happy to buy shares nine years ago, when the ratio of share prices to profits was three times what it is today, and are now determined to keep their money in cash and bonds.

That approach will be hopelessly inadequate for those who want to build a decent pension, especially in defined-contribution, or money-purchase, schemes, where the employee bears all the investment risk. The average American scheme member contributes just 7.8% of salary to his pension scheme. His employer, on average, contributes only 4.4%. He has a pot worth only $68,000. A rule of thumb is that total contributions need to be around 20% of wages to match a traditional final-salary scheme.

Inadequate savings, badly invested, are a problem for individuals and the economy. Cautious savers are putting their money in banks; banks are reluctant to lend; companies therefore find it hard both to borrow money and to raise equity capital. This timidity hurts companies and, in the long term, savers. Implausible as it may sound, right now equities and corporate bonds are a better long-term bet than cash.

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PUBLISHED BY ‘THE ECONOMIST’ (Spain)

Posted in ASIA, BANKING SYSTEM - USA, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENGLAND, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, FRAUD, GERMANY, HOUSING CRISIS - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, NORTH AMERICA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, UNITED KINGDOM, USA | Leave a Comment »

INDITEX GANÓ 843 MILLONES EN LOS NUEVE PRIMEROS MESES, UN 2% MÁS – Las ventas crecieron un 11% entre febrero y octubre, y alcanzaron los 7.353 millones de euros, un incremento que, a tipo de cambio y perímetro constante, se eleva hasta el 14%

Posted by Gilmour Poincaree on December 11, 2008

11/12/2008 08:07

PUBLISHED BY ‘LA GACETA DE LOS NEGOCIOS’ (Spain)

Madrid. Inditex registró un beneficio neto de 843 millones de euros en los nueve primeros meses de su ejercicio fiscal, lo que supone un incremento del 2% respecto al resultado obtenido en el mismo periodo del año anterior, un 4% más a perímetro constante, informó hoy la compañía a la Comisión Nacional del Mercado de Valores (CNMV).

El grupo textil explicó que sus ventas crecieron un 11% entre febrero y octubre, y alcanzaron los 7.353 millones de euros, un incremento que, a tipo de cambio y perímetro constante, se elevó hasta el 14%.

La compañía precisó que, transcurridas seis semanas desde el inicio del cuarto trimestre del ejercicio 2008, las pautas de crecimiento son “similares a las del tercer trimestre”.

El margen bruto de la compañía avanzó un 12%, con lo que se situó en 4.235 millones de euros, y supuso el 57,6% de las ventas. El beneficio bruto de explotación (Ebitda) subió un 5% y se colocó en los 1.545 millones de euros, mientras que el beneficio neto de explotación (Ebit), por su parte, repuntó un 2%, hasta 1.132 millones de euros.

Crecer sin recurrir al endeudamiento

La compañía que preside Amancio Ortega destacó su “fuerte capacidad de generación de caja”, cuya posición neta se incrementó un 9%, hasta 525 millones de euros, lo que le permitió financiar su crecimiento “sin recurrir al endeudamiento”.

En los nueve primeros meses, el grupo abrió un total de 456 nuevas tiendas, 45 más que en el mismo periodo del año anterior, con una inversión de 806 millones. De esta forma, al cierre de octubre Inditex contaba con 4.147 tiendas en 71 países, 456 más que al inicio del ejercicio.

Apuesta por Asia y Europa del Este

Entre los mercados en los que se produjo un mayor incremento en la presencia comercial destaca Rusia, donde el número de tiendas casi se ha duplicado desde el inicio del ejercicio. Otras aperturas reseñables son la tienda Zara inaugurada en Tokio, con la que el grupo alcanzó los 4.000 puntos de venta, así como las primeras tiendas en Montenegro, donde el grupo ha lanzado simultáneamente las cadenas Zara, Pull and Bear, Bershka, Stradivarius y Oysho.

Por su parte, Uterqüe, cadena especializada en accesorios, alcanzaba un total de 24 tiendas a 31 de octubre, entre ellas las primeras en Portugal.

Asimismo, el grupo creó un total de 7.171 nuevos empleos en los nueve primeros meses, de forma que la plantilla de la compañía estaba integrada por 86.688 personas al cierre de octubre. (ep)

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PUBLISHED BY ‘LA GACETA DE LOS NEGOCIOS’ (Spain)

Posted in ASIA, BANKING SYSTEMS, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GARMENT INDUSTRIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, REGULATIONS AND BUSINESS TRANSPARENCY, RUSSIA, SPAIN, STAGFLATION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

RELIANCE AWARDS AKER 2ND PHASE OF SUBSEA DEVELOPMENT FOR $235MM (India)

Posted by Gilmour Poincaree on December 10, 2008

Tuesday, December 09, 2008

Aker Solutions

PUBLISHED BY ‘THE RIGZONE’

Aker Solutions has signed a change order to an existing contract with Reliance Industries Ltd, India, for the second phase of development on the MA-D6 subsea field. Valued at US $235 million, the contract includes the transportation, installation and commissioning of the second phase of the MA-D6 subsea development, including a gas export system and production wells.

Last year, Aker Solutions signed a contract for the first phase of development, including the delivery of a complete subsea production system, including umbilicals, to Reliance Industry’s fast-track MA-D6 development. Aker Solutions managed the first phase subsea installation of the field.

The MA-D6 field, located in the Bay of Bengal, produced first oil in record-breaking time from discovery to production on Sept. 17, 2008.

“Reliance Industries is one of the world’s fastest growing oil companies and will be a significant player in the Bay of Bengal’s deepwater developments. Aker Solutions is proud to be selected as their partner once again,” said Egil Boyum, SVP Subsea Systems, Aker Solutions.

The 2nd phase installation is scheduled for completion by the second quarter of 2009. The contract party is Aker Solutions subsidiary, Aker Installation FP AS.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE RIGZONE’

Posted in ASIA, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, PETROL, RECESSION, REFINERIES - PETROL/BIOFUELS, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

NOW IS THE TIME FOR POLITICS – MORE GOVERNMENT IS THE SOLUTION, NOT THE PROBLEM, AND KEY TO SOLVING WORLD POVERTY (Brasil)

Posted by Gilmour Poincaree on December 9, 2008

DECEMBER 2008 – FEBRUARY 2009

by Luis Inácio Lula da Silva

PUBLISHED BY ‘NEWSWEEK’ (USA) – SPECIAL EDITION – ISSUES 2009

The world today is experiencing turbulence unlike anything we’ve seen in decades. The U.S. credit crisis has contaminated the international economy, and financial systems have been shaken to the core, undermining economic doctrines once treated as absolute truths.

As I told the UN. General Assembly in September, now is the time for politics, for governments to use public control and oversight to halt the economic anarchy. I welcome the actions that other countries have taken. But it will be some time before their initiatives kick in. That means more steps are needed in the meantime to safeguard the world’s most vulnerable: workers whose jobs and purchasing power are on the line, simple folk trying to save for the future, the poor who depend on the state.

The abuses and errors coming to light daily are all evidence that our existing system of international economic governance has broken down. To develop a better one, the world’s major developing countries should be called on to join the debate. We have plenty to contribute. Take Brazil. We are ready to do our part, and our economy is better prepared than most to confront the crisis. We have said no to macroeconomic adventurism. Inflation is under control and we are growing steadily. We have plenty of foreign reserves and owe nothing to the International Monetary Fund. This gives us the tools and the peace of mind to withstand the turbulence the crisis will bring.

Brazil is also better prepared to deal with the social and economic dislocation that may ensue. Consider: since I took office in 2003, more than 10 million Brazilians have joined the workforce. Some 20 million have risen out of absolute poverty. Our internal market is expanding, giving us an important economic cushion. Above all, we are redistributing income and reducing social inequality. These advances have nothing to do with luck or a favorable environment. They are the result of hard work by the Brazilian people and their government.

Weaving a broad social safety net is a central part of this endeavor. Our income-transfer program now distributes benefits to 11 million poor families nationwide, on the condition that mothers get prenatal care and parents keep their children in school and vaccinated. Our success shows that individual governments can and must play a vital role in reducing poverty and inequality. And our example in health care and education is already being made available to other countries in Latin America, Africa and Asia facing similar challenges.

That said, no state will escape this crisis on its own. Coordinated actions are needed. Yet they will succeed only if international decision making is redesigned in accordance with new realities; the institutions set up after World War II reflect a balance of power that’s long been superseded. This challenge actually goes far beyond the immediate financial storm. Other threats loom, such as hunger and poverty, the rising price and scarcity of food, the energy crisis and climate change. World commerce remains distorted, and the best means of addressing that—die Doha round of trade talks — could collapse.

Still, none of these obstacles is insurmountable. We all know the solutions, and we have the tools and the resources to succeed. Too often what we lack is political will. Many people today are comparing our current situation with the Great Depression. But we should take those parallels further and should summon the spirit of solidarity that helped create the New Deal, harnessing it to forge a new global pact to roll back poverty and extreme inequality. Contrary to what so many believe, globalization has only increased the economic and social responsibilities of governments. We must renew our commitment to strong multilateralism and we must make that multilateralism more democratic, in order to build agreements that reflect the legitimate interests of all nations. This means, among other things, enlarging the U.N. Security Council and revamping the IMF to provide effective financial support to countries in need.

The United States-by virtue of its size and its economic prowess—is and will continue to be a key player in the global search for common solutions. Washington has played such a decisive role since the end of World War II. Given the challenges and opportunities facing us today, we in the developing world hope that we can once again count on the American people to come to the defense of multilateralism, equality and justice. This is not the time for protectionism, but for progressive action born of generosity and solidarity that will forge collective answers to 21st-century challenges.

Luis Inácio Lula Da Silva is the President of Brazil.

PUBLISHED BY ‘NEWSWEEK’ (USA)

Posted in 'DOHA TALKS', A PRESIDÊNCIA, AFRICA, ASIA, BANKING SYSTEM - USA, BANKING SYSTEMS, BRASIL, CENTRAL BANKS, CIDADANIA, COMBATE À DESIGUALDADE E À EXCLUSÃO - BRASIL, COMMERCE, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FLUXO DE CAPITAIS, FOREIGN POLICIES, FOREIGN POLICIES - USA, G20, HISTORY, HOUSING CRISIS - USA, IMF, INDÚSTRIA DA CONSTRUÇÃO CIVIL, INFRAESTRUTURA - BRASIL, INSTITUIÇÕES DE FOMENTO NACIONAL, INTERNATIONAL, INTERNATIONAL RELATIONS, LATIN AMERICA, LUIS INÁCIO LULA DA SILVA, MACROECONOMY, O MERCADO DE TRABALHO - BRASIL, O PODER EXECUTIVO FEDERAL, OS TRABALHADORES, POLÍTICA EXTERNA - BRASIL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RELAÇÕES DIPLOMÁTICAS - BRASIL, RELAÇÕES INTERNACIONAIS - BRASIL, SOUTH AMERICA, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

SHOOTING AN ELEPHANT

Posted by Gilmour Poincaree on November 27, 2008

1920 – 1940

THE COLLECTED ESSAYS, JOURNALISM AND LETTERS OF GEORGE ORWELL – Vol. 1

AN AGE LIKE THIS

Pages 265, 266, 267, 268, 269, 270, 271, 272

88. Shooting an Elephant

GEORGE ORWELL In Moulmein, in Lower Burma, I was hated by large numbers of people – the only time in my life that I have been important enough for this to happen to me. I was sub-divisional police officer of the town, and in an aimless, petty kind of way anti- European feeling was very bitter. No one had the guts to raise a riot, but if a European woman went through the bazaars alone somebody would probably spit betel juice over her dress. As a police officer I was an obvious target and was baited whenever it seemed safe to do so. When a nimble Burman tripped me up on the football field and the referee (another Burman) looked the other way, the crowd yelled with hideous laughter. This happened more than once. In the end the sneering yellow faces of young men that met me everywhere, the insults hooted after me when I was at a safe distance, got badly on my nerves. The young Buddhist priests were the worst of all. There were several thousands of them in the town and none of them seemed to have anything to do except stand on street corners and jeer at Europeans.

All this was perplexing and upsetting. For at that time I had already made up my mind that imperialism was an evil thing and the sooner I chucked up my job and got out of it the better. Theoretically – and secretly, of course – I was all for the Burmese and all against their oppressors, the British. As for the job I was doing, I hated it more bitterly than I can perhaps make clear. In a job like that you see the dirty work of Empire at close quarters. The wretched prisoners huddling in the stinking cages of the lock-ups, the grey, cowed faces of the long-term convicts, the scarred buttocks of the men who had been flogged with bamboos – all these oppressed me with an intolerable sense of guilt. But I could get nothing into perspective. I was young and ill educated and I had had to think out my problems in the utter silence that is imposed on every Englishman in the East. I did not even know that the British Empire is dying, still less did I know that it is a great deal better than the younger empires that are going to supplant it. All I knew was that I was stuck between my hatred of the empire I served and my rage against the evil-spirited little beasts who tried to make my job impossible. With one part of my mind I thought of the British Raj as an unbreakable tyranny, as something clamped down, in saecula saeculorum, upon the will of prostrate peoples; with another part I thought that the greatest joy in the world would be to drive a bayonet into a Buddhist priest’s guts. Feelings like these are the normal by-products of imperialism; ask any Anglo- Indian official, if you can catch him off duty.

One day something happened which in a roundabout way was enlightening, [t was a tiny incident in itself, but it gave me a better glimpse than t had had before of the real nature of imperialism – the real motives for which despotic governments act. Early one morning the sub-inspector at a police station the other end of the town rang me up on the phone and said that an elephant was ravaging the bazaar. Would I please come and do something about it? I did not know what I could do, but I wanted to see what was happening and I got on to a pony and started out. I took my rifle, an old .44 Winchester and much too small to kill an elephant, but I thought the noise might be useful in terrorem. Various Burmans stopped me on the way and told me about the elephant’s doings. It was not, of course, a wild elephant, but a tame one which had gone ‘must’. It had been chained up as tame elephants always are when their attack of ‘must’ is due, but on the previous night it had broken its chain and escaped. Its mahout, the only person who could manage it when it was in that state, had set out in pursuit, but he had taken the wrong direction and was now twelve hours’ journey away, and in the morning the elephant had suddenly reappeared in the town. The Burmese population had no weapons and were quite helpless against it. It had already destroyed somebody’s bamboo hut, killed a cow and raided some fruit-stalls and devoured the stock; also it had met the municipal rubbish van, and, when the driver jumped out and took to his heels, had turned the van over and inflicted violence upon it.

The Burmese sub-inspector and some Indian constables were waiting for me in the quarter where the elephant had been seen. It was a very poor quarter, a labyrinth of squalid bamboo huts, thatched with palm-leaf, winding all over a steep hillside. I remember that it was a cloudy stuffy morning at the beginning of the rains. We began questioning the people as to where the elephant had gone, and, as usual, failed to get any definite information. That is invariably the case in the East; a story always sounds clear enough at a distance, but the nearer you get to the scene of events the vaguer it becomes. Some of the people said that the elephant had gone in one direction, some said that he had gone in another, some professed not even to have heard of any elephant. I had almost made up my mind that the whole story was a pack of lies, when we heard yells a little distance away. There was a loud, scandalized cry of ‘Go away, child! Go away this instant!’ and an old woman with a switch in her hand came round the corner of a hut, violently shooing away a crowd of naked children. Some more women followed, clicking their tongues and exclaiming; evidently there was something there that the children ought not to have seen. I rounded the hut and saw a man’s dead body sprawling in the mud. He was an Indian, a black Dravidian coolie, almost naked, and he could not have been dead many minutes. The people said that the elephant had come suddenly upon him round the corner of the hut, caught him with its trunk, put its foot on his back and ground him into the earth. This was the rainy season and the ground was soft, and his face had scored a trench a foot deep and a couple of yards long. He was lying on his belly with arms crucified and head sharply twisted to one side. His face was coated with mud, the eyes wide open, the teeth bared and grinning with an expression of unendurable agony. (Never tell me, by the way, that the dead look peaceful. Most of the corpses I have seen looked devilish.) The friction of the great beast’s foot had stripped the skin from his back as neatly as one skins a rabbit. As soon as I saw the dead man I sent an orderly to a friend’s house near by to borrow an elephant rifle. I had already sent back the pony, not wanting it to go mad with fright and throw me if it smelled the elephant.

The orderly came back in a few minutes with a rifle and five cartridges, and meanwhile some Burmans had arrived and told us that the elephant was in the paddy fields below, only a few hundred yards away. As I started forward practically the whole population of the quarter flocked out of their houses and followed me. They had seen the rifle and were all shouting excitedly that I was going to shoot the elephant. They had not shown much interest in the elephant when he was merely ravaging their homes, but it was different now that he was going to be shot. It was bit of fun to them, as it would be to an English crowd; besides, they wanted the meat. It made me vaguely uneasy. I had no intention of shooting the elephant – I had merely sent for the rifle to defend myself if necessary – and it is always unnerving to have a crowd following you. I marched down the hill, looking and feeling a fool, with the rifle over my shoulder and an ever-growing army of people jostling at my heels. At the bottom when you got away from the huts there was a metalled road and beyond that a miry waste of paddy fields a thousand yards across, not yet ploughed but soggy from the first rains and dotted with coarse grass. The elephant was standing eighty yards from the road, his left side towards us. He took not the slightest notice of the crowd’s approach. He was tearing up bunches of grass, beating them against his knees to clean them and stuffing them into his mouth.

I had halted on the road. As soon as I saw the elephant I knew with perfect certainty that I ought not to shoot him. It is a serious matter to shoot a working elephant – it is comparable to destroying a huge and costly piece of machinery – and obviously one ought not to do it if it can possibly be avoided. And at that distance, peacefully eating, the elephant looked no more dangerous than a cow. I thought then and I think now that his attack of ‘must’ was already passing off; in which case he would merely wander harmlessly about until the mahout came back and caught him. Moreover, I did not in the least want to shoot him. I decided that I would watch him for a little while to make sure that he did not turn savage again, and then go home.

But at that moment I glanced round at the crowd that had followed me. It was an immense crowd, two thousand at the least and growing every minute. It blocked the road for a long distance on either side. I looked at the sea of yellow faces above the garish clothes – faces all happy and excited over this bit of fun, all certain that the elephant was going to be shot. They were watching me as they would watch a conjurer about to perform a trick. They did not like me, but with the magical rifle in my hands I was momentarily worth watching. And suddenly I realized that I should have to shoot the elephant after all. The people expected it of me and I had got to do it; I could feel their two thousand wills pressing me forward, irresistibly. And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man’s dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd – seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he destroys. He becomes a sort of hollow, posing dummy, the conventionalized figure of a sahib. For it is the condition of his rule that he shall spend his \ life in trying to impress the ‘natives’ and so in every crisis he has got to do what the ‘natives’ expect of him. He wears a mask, and his face grows to fit it. I had got to shoot the elephant. I had committed myself to doing it when I sent for the rifle. A sahib has got to act like a sahib; he has got to appear resolute, to know his own mind and do definite things. To come all that way, rifle in hand, with two thousand people marching at my heels, and then to trail feebly away, having done nothing – no, that was impossible. The crowd would laugh at me. And my whole life, every white man’s life in the East, was one long struggle not to be laughed at.

But I did not want to shoot the elephant. I watched him beating his bunch of grass against his knees, with that preoccupied grandmotherly air that elephants have. It seemed to me that it would be murder to shoot him. At that age I was not squeamish about killing animals, but I had never shot an elephant and never wanted to. (Somehow it always seems worse to kill a lar^e animal.) Besides, there was the beast’s owner to be considered. Alive, the elephant was worth at least a hundred pounds; dead, he would only be worth the value of his tusks – five pounds, possibly. But I had got to act quickly. I turned to some experienced-looking Burmans who had been there when we arrived, and asked them how the elephant had been behaving. They all said the same thing: he took no notice of you if you left him alone, but he might charge if you went too close to him.

It was perfectly clear to me what I ought to do. I ought to walk up to within, say, twenty-five yards of the elephant and test his behaviour. If he charged I could shoot, if he took no notice of me it would be safe to leave him until the mahout came back. But also I knew that I was going to do no such thing. I was a poor shot with a rifle and the ground was soft mud into which one would sink at every step. If the elephant charged and I missed him, I should have about as much chance as a toad under a steam-roller. But even then I was not thinking particularly of my own skin, only the watchful yellow faces behind. For at that moment, with the crowd watching me, I was not afraid in the ordinary sense, as I would have been if I had been alone. A white man mustn’t be frightened in front of ‘natives’; and so, in general, he isn’t frightened. The sole thought in my mind was that if anything went wrong those two thousand Burmans would see me pursued, caught, trampled on and reduced to a grinning corpse like that Indian up the hill. And if that happened it was quite probable that some of them would laugh. That would never do. There was only one alternative. I shoved the cartridges into the magazine and lay down on the road to get a better aim.

The crowd grew very still, and a deep, low, happy sigh, as of people who see the theatre curtain go up at last, breathed from innumerable throats. They were going to have their bit of fun after all. The rifle was a beautiful German thing with cross- hair sights. I did not then know that in shooting an elephant one should shoot to cut an imaginary bar running from ear-hole to ear-hole. I ought therefore, as the elephant was sideways on, to have aimed straight at his ear-hole; actually I aimed several inches in front of this, thinking the brain would be further forward.

When I pulled the trigger I did not hear the bang or feel the kick – one never does when a shot goes home – but I heard the devilish roar of glee that went up from the crowd. In that instant, in too short a time, one would have thought, even for the bullet to get there, a mysterious, terrible change had come over the elephant. He neither stirred nor fell, but every line of his body had altered. He looked suddenly stricken, shrunken, immensely old, as though the frightful impact of the bullet had paralysed him without knocking him down. At last, after what seemed a long time – it might have been five seconds, I dare say – he sagged flabbily to his knees. His mouth slobbered. An enormous senility seemed to have settled upon him. One could have imagined him thousands of years old. I fired again into the same spot. At the second shot he did not collapse but climbed with desperate slowness to his feet and stood weakly upright, with legs sagging and head drooping. I fired a third time. That was the shot that did for him. You could see the agony of it jolt his whole body and knock the last remnant of strength from his legs. But in falling he seemed for a moment to rise, for as his hind legs collapsed beneath him he seemed to tower upwards like a huge rock toppling, his trunk reaching skyward like a tree. He trumpeted, for the first and only time. And then down he came, his belly towards me, with a crash that seemed to shake the ground even where I lay.

I got up. The Burmans were already racing past me across the mud. It was obvious that the elephant would never rise again, but he was not dead. He was breathing very rhythmically with long rattling gasps, his great mound of a side painfully rising and falling. His mouth was wide open – I could see far down into caverns of pale pink throat. I waited a long time for him to die, but his breathing did not weaken. Finally I fired my two remaining shots into the spot where I thought his heart must be. The thick blood welled out of him like red velvet, but still he did not die. His body did not even jerk when the shots hit him, the tortured breathing continued without a pause. He was dying, very slowly and in great agony, but in some world remote from me where not even a bullet could damage him further. I felt that 1 had got to put an end to that dreadful noise. It seemed dreadful to see the great beast lying there, powerless to move and yet powerless to die. and not even to be able to finish him. [ sent back for my small rifle and poured shot after shot into his heart and down his throat. They seemed to make no impression. The tortured gasps continued as steadily as the ticking of a clock.

In the end I could not stand it any longer and went away. [ heard later that it took him half an hour to die. Burmans were arriving with dahs and baskets even before I left, and I was told they had stripped his body almost to the bones by the afternoon.

Afterwards, of course, there were endless discussions about the shooting of the elephant. The owner was furious, but he was only an Indian and could do nothing. Besides, legally I had done the right thing, for a mad elephant has to be killed, like a mad dog, if its owner fails to control it. Among the Europeans opinion was divided. The older men said I was right, the younger men said it was a damn shame to shoot an elephant for killing a coolie, because an elephant was worth more than any damn Coringhee coolie. And afterwards I was very glad that the coolie had been killed; it put me legally in the right and it gave me a sufficient pretext for shooting the elephant. I often wondered whether any of the others grasped that I had done it solely to avoid looking a fool.

New Writing, No. 2, Autumn 1936; Penguin New Writing, No. 1, [November] 1940; broadcast in the B.B.C. Home Service, 12 October 1948; .S.E.; O.R.; C.E.

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MCDONALD’S TO BOOST ASIA SPENDING, ‘CAPITALIZING’ ON RECESSION

Posted by Gilmour Poincaree on November 19, 2008

Last Updated: November 18, 2008 19:49 EST

by Bernard Lo and Frank Longid

Nov. 19 (Bloomberg) – McDonald’s Corp., the world’s largest restaurant company, will increase Raul Vasquez/Bloomberg Newsinvestment in Asia next year to boost customer numbers as the recession forces people to cut living expenses.

“People are trading down and we’re capitalizing on that,” Tim Fenton, McDonald’s president for Asia, the Middle East and Africa, said yesterday in a Bloomberg TV interview in Hong Kong. The company’s quick-service restaurants are staying open longer as people take shorter breaks, “trying to squeeze more hours into their days,” he added.

McDonald’s aims to grab market share as the world slips into recession by maintaining store openings at more than one per day in the region next year, said Fenton, a 35-year veteran at the Oak Brook, Illinois-based company. Slowing growth has led China to pump 4 trillion yuan ($586 billion) into its economy while South Korea pledged to spend an extra 14 trillion won ($9.7 billion) next year to prevent its first recession in a decade.

“It will serve McDonald’s well to take advantage of the weaker market,” said Janna Sampson, co-chief investment officer at Oakbrook Investments LLC. Increasing market share during a slowdown benefits “companies that have the cash flow to do that, and McDonald’s is one of those with extremely strong cash flow,” she said in a phone interview today.

Lisle, Illinois-based Oakbrook manages $1.2 billion including 317,200 McDonald’s shares, Sampson said.

China Focus

McDonald’s, rival Yum! Brands Inc. and other foreign consumer companies such as PepsiCo Inc., Best Buy Co. and Wal- Mart Stores Inc. are focusing on emerging markets such as China, which saw retail sales rise 22 percent in October, close to the fastest pace in nine years.

Fenton plans to increase spending on new stores and refurbishments in Asia, the Middle East and Africa by at least 20 percent to $360 million. That compares with last year’s capital- expenditure growth of 7 percent.

The company plans 475 store openings in the region this year and “about the same number” in 2009, or 40-45 percent of the worldwide total, Fenton said in a separate interview. McDonald’s earned 18 percent of third-quarter sales in Asia, the Middle East and Africa, compared with 43 percent in Europe and 33 percent in the U.S.

Same-store sales in China, where McDonald’s opened its 1,000th branch Nov. 14, grew about 10 percent in the first 10 months, compared with 10.2 percent for all of last year, Fenton said. Sales including new stores are growing 20 percent in China.

Global sales at restaurants open at least 13 months climbed 8.2 percent, paced by Europe’s gain of 9.8 percent compared with a year earlier. U.S. same-store sales increased 5.3 percent.

About 175 of next year’s new restaurants will be in China, where the company trails Yum! Brands in number of outlets. Yum, the owner of the Pizza Hut, Taco Bell and KFC chains, has more than 2,800 restaurants in China and plans to have 3,000 by the end of the year.

McDonald’s has about 32,000 restaurants globally, Fenton said. Yum has 35,000 outlets worldwide.

To contact the reporter on this story: Frank Longid in Hong Kong

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WORLD ECONOMIES

Posted by Gilmour Poincaree on November 18, 2008

November 17, 2008 Monday Ziqa’ad 18, 1429

Gulf States

Oil-dependent Arab states will be hurt as the global economy slides into recession, but a huge windfall WORLD ECONOMIESaccumulated over the past few years from oil sales will help them minimise the impact. Undoubtedly, the Gulf economies will be affected, but the impact will be much less than in the industrial world. The main impact will be a drop in demand for oil, and consequently revenues.

The six-nation Gulf Cooperation Council (GCC), grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), is estimated to have sold oil worth around $3 trillion over the past six years.

The GCC governments had foreign assets of $1.8 trillion at the end of last year. This is expected to top $2 trillion by the end of 2008. Despite the sharp drop in oil prices, GCC states will end up this year with a good surplus. However, projects still in the pipeline are likely to be affected by delays.

The region’s stock markets have been severely affected by the global crisis, plunging 20 per cent, or close to $200 billion in value. The impact of the global financial meltdown on Gulf economies could spread much wider and deeper. Financing for Gulf mega-projects will become scarce and its cost higher. The region’s markets for large-scale project finance and real estate will be particularly affected by this credit crunch.

Some Gulf projects are already facing finance problems. The main impact will be on the real estate sector, mainly in the UAE and Qatar because they have been growing at a fast pace. Petrochemicals and other industries will remain safe, but petrochemicals and aluminum exports, the main Gulf products other than oil, will also be affected. The estimated $2.5 trillion value of foreign investments held by Gulf governments and the private sector is also expected to be reduced by a slump in asset prices worldwide. Some economists say Gulf investments may have already lost hundreds of billions of dollars of their book value.

Finance ministers and central bankers from Gulf on the other hand expect their economies to continue to grow despite the global financial crisis and a sharp drop in oil prices. The officials underscored the “strength and solvency” of the financial sector and stressed that the region can weather any impact from the global financial crisis. They have voiced satisfaction over measures taken to deal with any impact from the world economic crisis and expressed readiness to take any additional measures.

Although the region is not much dependent on the international economy, Middle Eastern agriculture and manufacturing, the main providers of job opportunities, have still become less competitive because of the increasing pressure to export goods to the global markets at lower prices. At the same time, inflation is running above 10 per cent in much of the region due to rising commodity prices. Inflation is also being driven upward because the currencies of many of the Gulf countries are pegged to the US dollar.

A prolonged slowdown in the international economy will also cause remittances, job creation, tourism and foreign aid to decline and unemployment to increase, particularly among the youth. The economic downturn will also slow the flow of educated Arab workers into jobs in the oil sector. Before the global financial crisis, the region benefited whether oil prices were high or low, since the region has both oil producers and consumers. But Middle East producers and consumers are now likely to suffer from either higher or lower oil prices as the financial crisis spreads because of the sustained drop in foreign investment coming into the region.

The 2009 GDP forecast for GCC as a region has been revised from 6.2 per cent to 4.5 per cent in 2009 due to the weakening global backdrop and lower oil prices. In Saudi Arabia, the world’s largest oil producer, oil output is likely to decrease in 2009, pulling down GDP growth to 4 per cent. Inflation will continue to rise in 2008 to 9.8 per cent and start coming down in 2009 to 9 per cent. In the UAE, the GCC’s most diversified and open economy, credit crunch and global downturn will hit open economy and growth will slow down in 2009 to 4.5 per cent. Inflation is likely to increase this year to 11.8 per cent before coming down next year to 10.5 per cent.

Qatar, with both its oil and non-oil sectors growing at double-digit speed, will remain one of the fastest-growing markets in 2008 with 14.5 per cent real GDP growth. However, supply bottlenecks and deeply negative policy rates will push inflation higher in 2008 to 15.6 per cent. Qatar’s investment driven, capital-intensive growth will face headwinds in 2009.

In Oman, with declining oil output, the economy is being propelled by services and gas-based industries in 2008 with expected GDP growth of 6.8 per cent. Despite a $15 billion investment plan for the oil and gas sectors, the outlook is less than rosy with high recovery costs and limited reserves. Inflation at 12 per cent is pushed up by food and rent prices, along with negative real interest rates that boost bank lending.

The Kuwaiti macro story continues to be driven by oil. The lack of political determination for diversification has caused Kuwait to lag most of its GCC neighbors so far with GDP growth forecast of 5.6 percent in 2008. Inflation as elsewhere continues to climb to 9.7 percent in 2008. In Bahrain, the non-oil sector remains the main driver of the resource-poor economy. With limited petrodollars, the budget surplus should stay modest at 7 percent of GDP by regional standards, while inflation should continue to rise in 2008 to 5.5 percent, the region’s lowest.

Asian economies

Most Asian economies are in a better position to weather the global financial storm due to significant foreign reserves, and painful lessons gleaned from the 1997 crisis. Growth in the Emerging Asia region is projected to moderate to 7.7 per cent in 2008 and 7 per cent in 2009, from 9.25 per cent last year, according to the World Economic Outlook report released by the International Monetary Fund.

Asia’s projected positive but slower growth will be propelled by the regional twin engines of China and India. Both countries are expected to experience lower demand on weaker exports but should continue to be supported by strong private consumption.

Growth in China eased to 10.5 per cent (year-on-year) in the first half of 2008, 2.5 per cent slower than the same period last year, partly due to slackening exports. However, activity continued to be supported by steady investment growth and accelerating consumption. India is not immune from the global liquidity crunch. India is likely to register GDP growth of 7.9 per cent in 2008, which may slip to 6.9 per cent in 2009, compared to 9.3 per cent last year. Indian growth in the second quarter slipped to 7.9 per cent, having risen by 8.8 per cent in the preceding quarter, on the back of weakening investment while private consumption and export growth have held up well.

IMF projects that the ongoing financial turmoil will have minimal impact on India, which is still largely a closed economy. The relatively high 7 per cent growth forecast reflects India’s strong internal growth dynamics from rapid productive growth and from its process of integration into the global economy that is still continuing. Emerging Asia can anticipate more weakness ahead in response to slowing demand from advanced economies and growing strains in regional financial markets.

The two biggest newly industrialised economies, South Korea and Taiwan, will see growth moderate, with South Korea’s economy expanding 4.1 per cent this year and 3.5 per cent in 2009. Taiwan will see 3.8 per cent growth in 2008 and 2.5 per cent next year. In the newly industrialized Asian economies (NIEs) and the Association of Southeast Asian Nations (ASEAN) economies, activity has also been decelerating. Domestic demand has softened, as rising food and fuel prices have started to weigh on consumption, while declining profit margins and weakening demand have prompted firms to scale back their investment plans.

Asia’s financial system is little affected by the US sub-prime mortgage problems that have triggered a global crisis. The impact on the financial sector in Asia is limited. Still, Asia’s economic growth will lose steam because of the slowdown in the US and Europe, which are main export markets for Asia.

The Asian Development Bank’s projection that overall growth rate in Asia would be 1.5-2.0 percentage points slower this year, but that is not necessarily a problem, as many Asian economies have “overheated.”

According to ADB’s latest outlook, Asia overall will continue to post robust growth, while slashing growth projections for the global economy and predicting that the United States would continue losing traction. But the growth among emerging Asian economies is forecast to moderate to 7.7 per cent in 2008 and 7.1 per cent in 2009, from 9.3 per cent in 2007. Weakening external demand is likely to weigh on exports, but, in some cases, the impact may be mitigated by still-loose macroeconomic policies and currency depreciation.

The Director General of the United Nation’s Conference on Trade and Development has warned the global downturn will continue into 2009. Economists at the UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP) says Asia’s export sector, a key driver of most economies, will be hit by a downturn in the European and US economies. But a downturn will be eased somewhat by the strength in domestic consumption in Asia, with most governments holding substantial foreign exchange reserves.

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REFLEXIONES DEL COMPAÑERO FIDEL – LA REUNIÓN DE WASHINGTON (Cuba)

Posted by Gilmour Poincaree on November 15, 2008

Sábado 15 Noviembre 2008

Fidel Castro Ruz

Noviembre 14 de 2008

5 y 35 p.m.

Algunos de los gobiernos que nos apoyan, a juzgar por declaraciones recientes, no dejan de incluir en FIDEL CASTRO BY PEPITO JUNIOR CARLOSlas mismas que lo hacen para facilitar la transición en Cuba. ¿Transición hacia dónde? Hacia el capitalismo, único sistema en el que religiosamente creen. Ni una sola palabra expresan para reconocer el mérito de un pueblo que, sometido a casi medio siglo de crueles sanciones económicas y agresiones, defendió una causa revolucionaria que, unida a su moral y patriotismo, le dio fuerzas para resistir.

También olvidan que, después de las vidas ofrendadas y tanto sacrificio defendiendo la soberanía y la justicia, no se le puede ofrecer a Cuba en la otra orilla el capitalismo.

Le hacen guiños a Estados Unidos, soñando que los ayudará a resolver sus propios problemas económicos inyectándoles sumas fabulosas de monedas de papel a sus tambaleantes economías, que sostienen el intercambio desigual y abusivo con los países emergentes.

Sólo de esta forma pueden garantizarse las ganancias multimillonarias de Wall Street y los bancos de Estados Unidos. Los recursos naturales no renovables del planeta y la ecología ni siquiera se mencionan. No se demanda el cese de la carrera armamentista y la prohibición del uso posible y probable de armas de exterminio masivo.

Ninguno de los que participarán en la reunión, convocada precipitadamente por el actual Presidente de Estados Unidos, ha dicho una palabra sobre la ausencia de más de 150 Estados con iguales o peores problemas, que no tendrán derecho a decir una palabra sobre el orden financiero internacional, como propuso el Presidente pro tempore de la Asamblea General de las Naciones Unidas, Miguel D’Escoto, entre ellos la mayor parte de los países de América Latina, el Caribe, África, Asia y Oceanía.

Mañana se inicia la reunión del G-20 en Washington. Bush está de plácemes. Proclama que de la reunión espera un nuevo orden financiero internacional. Las instituciones creadas por Bretton Woods deben ser más transparentes, responsables y efectivas. Es lo único que admitiría. Para señalar la prosperidad de Cuba en el pasado, habló de que una vez estuvo sembrada de campos de caña de azúcar. No dijo, por cierto, que se cortaba a mano y el imperio nos arrebató la cuota establecida durante más de medio siglo, cuando la palabra socialismo no se había pronunciado todavía en nuestro país, aunque sí las de ¡Patria o Muerte!

Muchos sueñan que, con un simple cambio de mando en la jefatura del imperio, este sería más tolerante y menos belicoso. El desprecio por su actual gobernante conduce a ilusiones del probable cambio del sistema.

No se conoce todavía el pensamiento más íntimo del ciudadano que tomará el timón sobre el tema. Sería sumamente ingenuo creer que las buenas intenciones de una persona inteligente podrían cambiar lo que siglos de intereses y egoísmo han creado. La historia humana demuestra otra cosa.

Observemos con atención lo que dice cada cual en esa importante reunión financiera. Las noticias lloverán. Estaremos todos un poco mejor informados.


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Posted in AFRICA, ASIA, CENTRAL AMERICA, CUBA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, G20, INTERNATIONAL, INTERNATIONAL RELATIONS, LATIN AMERICA, OCEANIA, THE FLOW OF INVESTMENTS | Leave a Comment »

CHINA SAYS IT MIGHT WORK WITH IMF ON GLOBAL CRISIS

Posted by Gilmour Poincaree on November 15, 2008

Published: Nov 14, 2008 12:31 AM – Modified: Nov 14, 2008 04:52 AM

by Joe McDonald – AP Business Writer

BEIJING – China said Friday it could work with the International Monetary Fund to help countries hurt by the global financial crisis, suggesting it might heed appeals to contribute to a bailout fund.

As President Hu Jintao prepared for a Washington meeting of leaders to discuss a response to the crisis, Vice Finance Minister Yi Gang sounded constructive, saying China was prepared to work with other countries. But at the same time, Yi reiterated that the most important step Beijing can take will be to keep its own economy stable.

“We are positively taking part in rescue actions for this international financial crisis,” Yi said at a news conference. “There are many ways to do this. We can do it bilaterally, such as currency swaps. And we can do it multilaterally, such as taking part in activities on the platform of the IMF.”

Hu is expected to come under pressure at the weekend meeting to use China’s $2 trillion in reserves to help expand an IMF stability fund. Beijing has yet to respond directly to such suggestions but says Hu will press Western leaders to give developing countries a bigger role in such global financial institutions, a measure that analysts say might be a condition for a Chinese contribution.

Japanese Prime Minister Taro Aso said Friday that Japan is ready to lend up to $100 billion to the IMF to support nations reeling from the global financial crisis. The IMF has dipped into its reserves fund to provide emergency loans to Iceland, Hungary and Ukraine worth more than $30 billion.

Yi repeated Beijing’s insistence that keeping its economy growing will be an important contribution to global stability. China announced a nearly $600 billion package on Sunday to boost economic growth through higher spending on construction and social programs.

“We have worked to stabilize the growth of China’s economy. We believe this will be our biggest contribution to the international response to the financial crisis,” Yi said.

Also Friday, another official said weakness in China’s economy is worsening and the government faces a severe challenge as it tries to avert a sharp downturn.

“The downturn trend in our economy is more obvious, especially since September. We hope a rapid downturn in growth will not occur,” Mu Hong, a deputy chairman of the nation’s main planning agency, said at the news conference with Yi.

Mu expressed confidence the stimulus package would help the country weather the global downturn. But he said, “This international financial crisis is a new challenge for us. It is a severe challenge.”

Beijing is moving quickly to launch the package and will distribute most of a planned 100 billion yuan ($15 billion) in additional government spending within the next two weeks, Mu said. He said the money will be spent on housing, rural development, highways, public health and environmental protection.

The government says the total stimulus – which also calls for higher investment by state companies – will be worth 4 trillion yuan ($586 billion) over the next two years.

China’s economic growth fell to 9 percent in the latest quarter after a stunning 11.9 percent expansion last year. Exporters say foreign customers are canceling orders, which has led to layoffs and factory closures.

Mu blamed the weakness on the global downturn. But data released Friday showed domestic investment – a key force driving China’s rapid expansion – is also cooling as companies cut back or put off spending on real estate, factories and other assets.

Investment in assets grew by 27.2 percent in the first 10 months of this year over the same period of 2007, the National Bureau of Statistics reported. That was down from the 27.6 percent growth reported for the first nine months of the year. Such investment is estimated to account for one-third of China’s economic growth.

“China’s pace of economic growth will reflect the extent to which accelerated infrastructure spending will be able to offset a slowdown in the property and manufacturing sectors,” said a report by Jing Ulrich, JP Morgan Chase & Co.’s chairwoman for China equities.

“Further fiscal and monetary easing may be called for as growth moderates,” Ulrich said.

© Copyright 2008, The News & Observer Publishing Company

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DOCOMO TO BUY STAKE IN TATA TELESERVICES – Japanese operator to get foothold in India

Posted by Gilmour Poincaree on November 14, 2008

Posted to the web on: 13 November 2008

by Sachi Izumi and Devidutta Tripathy

Reuters

TOKYO — NTT DoCoMo will pay $2,7bn for a 26% stake in Indian telecom Tata Teleservices, giving TATA TELESERVICESJapan’s top cellphone operator a foothold in the world’s fastest-growing major cellphone market.

DoCoMo’s deal with Tata Teleservices follows a $350m investment in Bangladesh’s third-largest cellphone carrier as it speeds up its expansion beyond a mature home market and adds to the record $63bn of overseas acquisitions by Japanese firms this year.

But as DoCoMo expands, salt-to-software conglomerate Tata Group — the parent of unlisted Tata Teleservices and the flagbearer for corporate India’s recent overseas expansion — has put its plans for acquisitions on hold due to the global credit crisis.

DoCoMo will also make an open joint-tender offer with Tata Sons, the holding firm of the group, to buy NTT DoCoMo up to 20% in a listed unit of India’s sixth-biggest cellphone operator, as required by Indian law.

DoCoMo was committed to the management of Tata Teleservices and saw it as a long-term investment, president Ryuji Yamada said in Tokyo.

Ahead of the announcement, shares in the unit, Tata Teleservices (Maharashtra), closed up 7,6% in a Mumbai market that fell 3,1%, while shares in DoCoMo ended up 1,3% in a Tokyo market down more than 1%.

DoCoMo did not rule out the possibility of taking a majority stake in Tata Tele in the future.

Shinji Moriyuki, a telecoms analyst at Mitsubishi UFJ Securities, said DoCoMo’s recent acquisitions in Asia would be positive, especially with the company’s extensive knowledge of third-generation (3G) network services to which many developing countries are now moving.

India is the world’s second-biggest mobile market, trailing only China. More than 10-million users signed up in September, taking the total customer base to 315,3-million, more than the population of the US, and almost three times the size of Japan’s market of 109-million subscribers.

Researcher Gartner forecasts India’s cellphone user base will more than double to 737-million by 2012, as just more than a quarter of India’s 1,1-billion population own cellphones compared with about 85% in Japan.

DoCoMo will face tough competition, though, as foreign firms such as Telenor, Etisalat and Sistema are gearing up to start services in India, where home-grown Bharti Airtel and Reliance Communications dominate along with a Vodafone unit.

Carriers in India at the moment provide only 2G services. A global auction of radio waves for 3G and 4G wireless services, which provide more advanced mobile services including video, is due in January.

The DoCoMo deal comes a day after Japanese chemical maker Mitsubishi Rayon announced a $1,6bn acquisition of British rival Lucite International. Earlier this year, drug maker Daiichi Sankyo forged a $4,6bn deal for a controlling stake in India’s Ranbaxy.

DoCoMo spent nearly ¥1,9-trillion in the late 1990s and early 2000s on small stakes in operators around the world to promote use of its i-mode mobile internet technology and ensure the adoption of 3G networks on the same wideband code division multiple access standard it uses. But it saw its investments sour, and pulled out of AT&T Wireless Services , Dutch operator KPN Mobile and Hutchison 3G UK Holdings after incurring heavy losses.

The Tata Group, which splashed out an Indian record of $13bn for steel maker Corus last year and this year bought Jaguar and Land Rover for $2,3bn, has put further acquisitions on hold due to the credit crunch.

“Some of our companies with substantial foreign operations, or those which have made substantial acquisitions, are facing major problems in raising capital and establishing lines of credit for their operations,” chairman Ratan Tata said .

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PUBLISHED BY ‘BUSINESS DAY’ (South Africa)

Posted in ASIA, COMMUNICATION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INDUSTRIES, INTERNATIONAL, JAPAN, THE FLOW OF INVESTMENTS | Leave a Comment »

JAPAN PM UNVEILS ANTI-CRISIS STEPS AHEAD OF SUMMIT

Posted by Gilmour Poincaree on November 14, 2008

14 Nov 2008, 09:43 hrs IST

REUTERS

WASHINGTON: Japan proposed a raft of steps on Thursday to help overcome the global financial crisis and avoid a future meltdown, including offering to boost the IMF’s firepower and calling for tougher supervision of credit rating agencies.

In a position paper released ahead of a leaders’ summit of the Group of 20 industrialised and emerging nations in Washington, Prime Minister Taro Aso said Tokyo would continue to support the dollar-based currency system despite market concerns about its outlook as U.S. economic power declines.

Japan, which holds the world’s second-largest foreign reserves at $980 billion, would be ready to lend up to $100 billion to the International Monetary Fund (IMF) to assist emerging economies if the Washington-based lender finds itself with insufficient funds, he said.

Behind the prime minister’s comments is a view in Tokyo that Japan had to learn its lesson the hard way from its prolonged response to tackling its own financial crisis in the 1990s.

He said other nations should also consider clarifying management responsibility when injecting public funds into banks, and adopt fair valuation and early disclosure of non-performing loans.

“At present, capital flows have become so global that they can occur instantaneously to take advantage of any differences that may exist among the regulations of various countries,” he said. “Concerted action to help converge each country’s various policy efforts to prevent a recurrence of the financial crisis is now an unavoidable challenge.”

On the role of the IMF, he somewhat distanced himself from some European views that the Washington-based lender should be entrusted with primary responsibility over financial regulation.

Instead, he said the Financial Stability Forum (FSF) should be given a clear status above standard-setting international organisations such as the Basel Committee, adding that the forum’s work with the IMF should be reinforced.

He said more emerging nations should belong to the FSF, whose members include international bodies and the Group of Seven nations plus Australia, Hong Kong, the Netherlands, Singapore and Switzerland.

In a proposal that may not sit well with the U.S. free-market focus, he said there should be discussions on providing legal authority to government officials over rules on credit rating agencies. He also called for fostering local credit rating agencies, such as in Asia, and to further develop a regional scheme to help provide dollar funding as in Asia’s web of currency swap agreements called the Chiang Mai Initiative. But he stressed that “open regionalism complements globalism in a positive sense.”

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Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, CURRENCIES, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL STABILITY FORUM (FSF), IMF, INTERNATIONAL, JAPAN, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

PAKISTAN, INDIA ASKED TO SIGN BILATERAL INVESTMENT TREATY

Posted by Gilmour Poincaree on November 14, 2008

November 14, 2008 Friday – Ziqa’ad 15, 1429

ISLAMABAD, Nov 13: The Saarc Chamber of Commerce and Industry (SCCI) has stressed upon the governments of Pakistan and India to sign bilateral investment treaty to foster economic cooperation between the two countries.

“The investment treaty will also motivate other countries of the region to promote intra-regional trade and investment,” SCCI president Tariq Sayeed said while addressing the inaugural session of the “Conference on Pakistan-India Economic Relations” being held in India.

According to a SCCI press release received here on Thursday, the conference has been organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in collaboration with Saarc Chamber of Commerce and Industry and Federation of Pakistan Chambers of Commerce and Industry.

The SCCI president stressed the need for promoting mobility of people, particularly business community of the region and urged upon the governments of the two countries to issue five years multiple visa for 500 businessmen.

He said the number of Saarc Visa Exemption Stickers should be increased from 100 to 300.

Speaking on the occasion, Indian State Minister for Commerce and Power Jairam Ramesh said that the Indian government was trying its best to remove Non-Tariff Trade Barriers (NTBs), which had been identified by various countries.

He said that India had no country-specific restrictions, adding that the only noteworthy NTB was the requirement of certification of standardisation of products imported into India.

Pakistan’s High Commissioner in India Shahid Malik said that Pakistan was willing to established lasting economic cooperation with India based on sincerity and reciprocity.

He said that Pakistan had adopted positive approach to promote trade relations with India, which could be quantified by the increasing volume of trade between two countries.

FPCCI president Tanvir Ahmed Sheikh who led Pakistan’s delegation in his detailed presentation identified areas of cooperation such as iron and steel, tea, leather and textiles and energy.

The newly elected President of India-Pakistan Chamber of Commerce and Industry, S. M. Muneer, in his speech emphasised the need for greater economic cooperation to unleash the untapped potential.

FICCI senior vice-president Singhania in his welcome address presented 10-point agenda to enhance economic cooperation. He said trade volume of $2 billion through legal channel and that of $5 billion through third country was reflective of potential of trade between Pakistan and India.

Dr Amit Mitra, the secretary-general of the FICCI and eminent economist inaugurated the inaugural session. A delegation of 75 leading businessmen from Pakistan is participating in the conference.

NON-TARIFF BARRIERS: Talking to APP in New Delhi Tanvir Ahmed Sheikh urged Indian government to remove non-tariff barriers on Pakistani goods to provide a level-playing in trade. He said negotiations for the purpose were in progress.

He said that major trading items between the two countries were cement and cotton.

He hoped that talks on liberalising visa policy for businessmen would succeed and the trading community would be able to get five-year multiple visa to visit each other’s country.

Mr Sheikh said Pakistan would participate in Indian International Trade Fair in a big way, beginning here on Friday. The fair would help Pakistan to introduce its products to Indian businessmen.—APP

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Posted in ASIA, COMMERCE, COMMODITIES MARKET, COTTON, ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INTERNATIONAL, INTERNATIONAL RELATIONS, PAKISTAN, THE FLOW OF INVESTMENTS, THE WORK MARKET, VEGETABLE FIBERS | Leave a Comment »

ASIAN SHARES, OIL TUMBLE AS GLOBAL RECESSION FEARS MOUNT

Posted by Gilmour Poincaree on November 13, 2008

November 13, 2008

by Rafael Nam

HONG KONG, Nov. 13 (Reuters) – Asian shares fell on Thursday to their lowest this month on A woman walks by an electric stock average index board in Hong Kong Thursday, Nov. 13, 2008. Hong Kong's stock index has plunged over 6 percent in early trade, tracking Wall Street's sharp losses overnight. The blue chip Hang Seng index fell 923.83 points, or 6.63 percent, to 13015.28 points in the morninguncertainty about whether the United States can succeed in its massive banking rescue and as Intel Corp.’s revenue warning stoked corporate earnings worries.

European markets also opened lower and were set for another rocky ride as the Germany announced its economy officially entered recession, contracting for a second straight quarter.

Japan’s Nikkei average dropped 6.3 percent. Other markets also took a beating: South Korea, Australia, and Hong Kong fell 5-6 percent each. Taiwan and Singapore dropped 3-4 percent each.

However, Shanghai gained 1.7 percent on hopes China’s spending plan would spur economic growth.

Evaporating confidence in the global economy led crude prices to hit a 22-month low of $ 55 a barrel, even after OPEC President Chakib Khelil indicated the oil-producing cartel may cut supply again. Metals such as platinum also dropped.

In London, oil prices steadied on Thursday after falling close to 50 dollars a barrel as the International Energy Agency warns of sliding energy demand around the globe.

With prices tumbling to the lowest levels in almost two years and down almost two-thirds in value compared to record highs of above 147 dollars a barrel in July, analysts said OPEC was certain to call an emergency meeting to announce further cuts to output.

Adding to the gloom was the forecast of the Organization for Economic Cooperation and Development that leading industrialized nations appear to be in a ‘’protracted’’ downturn, with the US, Japanese and eurozone economies likely to shrink next year.

The OECD predicted a return to modest growth in 2010 but warned that the United States, the world’s largest economy, would suffer a whopping 2.8 percent contraction in fourth quarter 2008.

It called for further government stimulus measures and steps to shore up financial markets but also warned against any move that would distort competition or threaten the operation of open markets.

The Japanese yen retreated against the euro and the dollar after soaring on Wednesday on a flight-to-quality. Other Asian currencies fell, while Australia’s central bank stepped in to support its tumbling Australian dollar.

The MSCI index of Asian stocks outside Japan dropped 5.7 percent after at one point hitting its lowest level since Oct. 30.

Asian shares followed Wall Street lower after the US Treasury on Wednesday backed away from using a $ 700 billion bailout fund to buy bad mortgage debt from lenders to focus instead on buying stakes in the US banks themselves.

The shift in focus not only created uncertainty, but came after a raft of recent gloomy economic data worldwide.

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RISKS WEIGH ON SPREADS AS US RESCUE PLAN SHIFTS (Singapore)

Posted by Gilmour Poincaree on November 13, 2008

Posted to the web on: 13 November 2008

Reuters

SINGAPORE — Market disappointment with the US Treasury’s proposed shift in the use of its bailout funds spilled over into Asian money markets today, freezing spreads and heightening uncertainty across assets.

Currencies and stock markets tumbled in Asia while interbank rates remained fairly elevated over policy rates, even rising slightly in markets such as Hong Kong. Japan’s central bank turned more aggressive in its support for the market, pumping in a heavier than normal amount through repo transactions starting next week.

The uncertainty stemmed as much from the US government’s plan to focus the remainder of its $700 billion bailout fund on making direct investments in financial institutions and shoring up consumer credit markets as from the upcoming meeting of the Group of 20 nations.

Leaders of the 20 industralised and emerging nations meet tomorrow in Washington. “The U-turn by Paulson is spurring fears that banks won’t be able to weather the persistent financial crisis without being able to offload the troubled assets off their books to another party,” said Sue Trinh, a strategist at RBC Capital Markets in Sydney.

“And a policy u-turn in an environment of heightened uncertainty does not help confidence, in that it simply adds to that uncertainty.” The US Treasury Department initially promoted the financial rescue package approved by Congress last month as a vehicle to buy illiquid mortgage assets from banks and other institutions to spur fresh lending.

However, that plan never got off the ground and US Treasury Secretary Henry Paulson told a news conference asset purchases were not the most effective use of the funds. Dollar funding rates were barely changed in Asia, quoting at 0,1 to 0,4% for overnight funds and 2,2-2,7% for three-month funds. Three-month dollar LIBOR fell to 2,1325% overnight

Analysts suspected other risk spreads would also cease narrowing, as they have been for weeks, while markets seek clarity on Treasury’s plans. The US TED spread, the spread between 3-month treasury bills and inter-bank rates, narrowed to 199 basis points yesterday, far below their widest level of 4,6 percentage points in October yet far wider than lows around a 110 basis points in September.

“The downtrend in the TED spread tells us that the panic in the money market is over,” ING economist Tim Condon said in a note. “However, we do not expect a normal TED spread to be restored as long as banks view their counterparties as dependent on government support. The TARP flip-flopping is unhelpful in that regard.”

Three-month Hong Kong inter-bank rates rose 10 basis points to 2,1372%, reversing a steady downtrend in place since late October, as Asian currencies fell and Hong Kong dollar forwards priced that bearishness in. Overnight-indexed swaps continued to drop, reflecting both an abundance of cash and expectations for rate cuts, despite the stickiness in inter-bank rates.

The spread between three-month dollar OIS and LIBOR fell to 163 basis points on Wednesday. In India, the one-month OIS was bid at 6,25%, compared with a 7,5% central bank overnight lending rate and 9,8% one-month interbank rate. Elsewhere, the Bank of Japan undertook aggressive funding operations to start on Monday, the first day of the new monthly reserve maintenance period when a temporary scheme of paying interest on excess reserves at the central bank will take effect.

The BOJ bought 2 trillion yen of JGBs in repo agreement for one day from November 17 to November 18 at 0,43%, and also bought ¥1,6-trillion of JGBs in repos for a week from Nov.17 at 0,46%, a tad lower from 0,48% at similar repo operations earlier in the week.

“The BOJ may be sending a message that it wants to ease repo rates in the new reserve period,” said a money market trader at a big Japanese bank. “The one-day repo operation is unusual and it may just be a technical smoothing operation, but could also be a signal that it will address a gap in supply whenever possible,” he said. The yen overnight call rate was trading around the BOJ’s 0,3% policy target.

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US EMBARRASSED AS TALIBAN STEAL HUMVEES

Posted by Gilmour Poincaree on November 12, 2008

November 12, 2008

by Bruce Loudon, South Asia correspondent

Article from: The Australian

TALIBAN militants were driving around in captured US army Humvee armoured vehicles in Pakistan’s U.S. Marines, from the 24th Marine Expeditionary Unit, take positions on a berm during a fire fight with Taliban positions near the town of Garmser in Helmand Province of Afghanistan Friday May 2, 2008tribal region close to the historic Khyber Pass last night after hijacking more than a dozen supply trucks travelling along the vital land route that supplies coalition forces in Afghanistan.

The capture of the Humvees – these days the symbol of US intervention in Iraq and elsewhere – is a serious embarrassment to US commanders of the coalition forces.

Pakistani reporters in the area said the militants unloaded the Humvees from shipping containers on the backs of the trucks and drove off in them, after decorating them with flags and banners of the banned umbrella organisation Tehrik-i-Taliban Pakistan, which is led by Baitullah Mehsud. Mehsud is closely allied to Osama bin Laden and the Taliban leader Mullah Omar.

The reporters said the hijackings had taken place “in clear view of (Pakistani) paramilitary personnel” deployed at the nearby Jamrud Fort, who “did not take any action”.

“All this happened on the international highway (linking Pakistan with Afghanistan) and you can imagine the implications this can have for us,” an official told Pakistan newspaper Dawn.

Pakistan army helicopter gunships were later sent to the area, but by then the trucks had been released by the militants, who had decamped with the Humvees as well as bags of wheat.

The hijacking of the supply trucks – and the embarrassment of seeing the militants driving around the area in the Humvees – came amid fast-mounting concern about the security of thevital land route through Pakistan that serves the 35,000-strong coalition force fighting in Afghanistan.

The supply trucks were seized by the militants along a 35km stretch of the narrow, switchback road through the Khyber Pass, the main gateway for essential supplies shipped under cover to the Pakistani port city of Karachi.

More than 350 trucks travel through the perilous pass each day, carrying supplies to Afghanistan, many of them with consignments destined for the coalition forces.

More than 24 transport trucks and oil tankers have reportedly been attacked in the area in the past month as militants have stepped up their assaults on the road convoys, causing serious concern to NATO commanders.

Last weekend, two coalition warplanes, backed by ground artillery from gun emplacements across the border in Afghanistan, crossed into Pakistani territory to attack militants seen in the Tirah valley, close to the Khyber Pass, in what appeared to be a pre-emptive strike against possible attacks on the vital road link.

Pakistani forces have also launched major offensives around the North West Frontier Province’s capital, Peshawar, in an attempt to drive back militants threatening the road.

The militants have responded by launching rocket attacks on Peshawar airport, which is regularly used by civilian aircraft.

Concern about security in the Khyber Pass has recently led US commanders to seek alternative land routes through Central Asia.

Adding to the concerns are mounting fears about the situation in Karachi, which is now a major target for infiltration by militants.

Officials said the trucks had been hijacked without a shot being fired.

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AFGHANISTAN, ASIA, PAKISTAN, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

CHINA TEM SALDO COMERCIAL RECORDE EM OUTUBRO, MESMO COM CRISE

Posted by Gilmour Poincaree on November 12, 2008

11/11/2008 12:14

Valor Online

SÃO PAULO – Apesar da crise financeira mundial, a China registrou um saldo comercial recorde de US$ 35,2 bilhões no mês de outubro, de acordo com dados oficiais. Foi o quarto mês seguido com aumento no superávit da balança comercial.
No entanto, informou a agência de notícias Xinhua, houve desaceleração no crescimento tanto das exportações quanto das importações, sendo que a diminuição de ritmo foi bem mais severa nas importações.

Pelos dados da Administração Geral de Alfândegas, as exportações somaram US$ 128,3 bilhões em outubro, com aumento de 19,2% sobre o ano passado. Essa taxa é inferior aos 21,5% vistos em setembro. As importações totalizaram US$ 93,1 bilhões, montante 15,6% superior ao de mesmo mês de 2007. Contudo, em julho, o crescimento das importações foi de 33,7% e essa taxa vem diminuindo desde então. Em setembro, a alta das importações havia sido de 21,5%.

(Valor Online, com agências internacionais)

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BANCO DA CHINA INICIA OPERAÇÕES NO BRASIL EM 2009 – Estabelecimento deve facilitar o crédito para empresas chinesas que tiverem interesse em atuar no país

Posted by Gilmour Poincaree on November 12, 2008

11/11/2008 – 19h47min

Em tempos de crise no sistema financeiro mundial, quebra de bancos e fusões entre instituições BANCO DA CHINA tradicionais, o Banco da China recebeu autorização do governo para atuar no Brasil e iniciará suas operações já no início de 2009.

A informação foi confirmada pelo embaixador da China no país, Chen Duqing, durante o evento “A crise financeira e seus efeitos no Brasil e na China”, realizado nesta terça-feira na Federação do Comércio do Estado de São Paulo (Fecomercio-SP), na capital paulista.

O decreto que autoriza a atuação do Banco da China no Brasil foi assinado pelo presidente Luiz Inácio Lula da Silva na última sexta-feira e publicado na edição de ontem do Diário Oficial da União.

O texto reconhece como de interesse do governo brasileiro a participação estrangeira — de até 100% — no capital da instituição, a ser controlada pelo Bank of China Limited, com sede em Pequim, e determina que o Banco Central tome as providências necessárias para a execução do decreto.

— O presidente Lula já assinou autorização para a primeira fase. Essa é uma notícia fresca até para mim, e alguns setores do governo da área financeira estão vendo com bons olhos a entrada do Banco da China nesse momento — afirmou o embaixador, que só recebeu a informação hoje.

Autorização

Duqing disse que a autorização para o funcionamento da instituição no país foi solicitada em agosto de 2007. Devido à demora para obter do governo a permissão para atuar no Brasil, o embaixador admitiu que chegou a encorajar o Banco da China a adquirir instituições brasileiras para expandir seus negócios no país.

De acordo com o presidente da Câmara Brasil-China de Desenvolvimento Econômico (CBCDE), Paul Liu, o principal objetivo do Banco da China será facilitar o crédito para empresas chinesas que tiverem interesse em atuar no Brasil.

O capital inicial da instituição será de cerca de US$ 100 milhões, mas o embaixador afirmou que o volume poderá aumentar, dependendo da demanda das empresas e da disponibilidade de recursos da matriz.

Em termos de ativos, segundo o embaixador, o Banco da China, o Banco da Construção da China e o Banco Industrial e do Comercial da China (ICBC) — todos estatais – estão entre os maiores do mundo.

— Na China não falta liquidez, não falta dinheiro, mas tem que saber aplicar, porque dinheiro parado realmente não funciona, não dá para nada — declarou Duqing.

Outra instituição chinesa com interesse em ampliar sua atuação no Brasil é o Banco de Desenvolvimento da China, uma espécie de BNDES chinês.

O banco já possui um escritório de representação no país, está financiando duas obras e procura oportunidades para a construção de grandes projetos de infra-estrutura, como portos, ferrovias e energia.

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UAE AND INDONESIA AIM TO BOOST TRADE RELATIONS

Posted by Gilmour Poincaree on November 11, 2008

Published: November 11, 2008, 00:11

by Binsal Abdul Kader, Staff Reporter

Abu Dhabi: Indonesians in the UAE are thrilled with the increasing number of professionals among them.

“When I reached Abu Dhabi nine years ago, I didn’t find many Indonesian engineers. Now, our Indonesian artists perform Gamelan, a traditional instrumental music from Java and Bali islands.association of petroleum engineers has more than 250 members”, Irfan Hendrawan , a petroleum engineer told Gulf News.

“Even a construction company working on an Island in the capital alone recruited 600 Indonesian engineers recently”, said Mohammad Loekito Slamet, Vice-President of UAE chapter of Society of Indonesian Petroleum Engineers.

“Among the 75,000 strong community, majority of them are housemaids but I was surprised to find about 160 engineers and their families in Ruwais, a remote town, 250 kilometres away from the capital”, M.Wahid Supriyadi, Indonesian Ambassador to the UAE told Gulf News.

“I met them as part of my efforts to form Indonesian Business and Professional Organisation in the Abu DhabiUAE “, said Supriyadi who took charge as the ambassador six months ago. “We expect more than 2,000 professionals and business men to be the members of the organisation”.

The ambassador and community members spoke to Gulf News on the sidelines of a reception hosted by the embassy as part of Indonesian national day celebrations on Sunday evening.

“Although national day was on August 17, we set aside the celebrations to this month, for the convenience of the community”, said the ambassador.

Saqr Gobash Saeed Gobash, Minister of Labour, was the chief guest.

A group of Indonesian artist played Gamelan, traditional instrumental music from Java and Bali islands, which touched the hearts of guests and the community members. Traditional dance also added colour to the celebrations.

A special corner of Indonesian food gave a new experience to the guests.

The ambassador said that being moderate Muslim countries, both are enjoying a very strong political relation and are trying to expand trade and people to people contact.

“The UAE has committed to invest $6.2 billion in our country as part of growing trade relations. Both countries have found new areas of opportunities which were ignored in the past”, said Supriyadi.

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CHINA STIMULUS PLAN FUELS HOPES FOR NEW INVESTMENT

Posted by Gilmour Poincaree on November 11, 2008

Posted on Mon, Nov. 10, 2008

by Joe McDonald

The Associated Press

BEIJING – China’s $586 billion stimulus package is its “biggest contribution to the world,” Premier Wen China's $586 billion stimulus package is its 'biggest contribution to the world'Jiabao said Monday, as hopes rose that heavy spending on construction and other projects would help support global growth by fueling demand for imported machinery and raw materials.

The massive Chinese spending plan , the largest ever undertaken by the communist leadership , was motivated by growing alarm at an unexpectedly sharp downturn in the country’s fast-growing economy that raised the threat of job losses and social unrest.

Sunday’s announcement staked out a bold position as President Hu Jintao prepares for next weekend’s meeting in Washington of leaders of 20 major economies to discuss a response to the global financial crisis.

Wen, the country’s top economic official, said the plan is meant to boost investment and consumer spending, maintain export growth and promote corporate competitiveness and financial reform.

“We must implement the measures to ensure a fast and stable economic development,” Wen told a meeting of government leaders, according to a report on state television. “They are not only the needs of the development of ourselves, but also our biggest contribution to the world.”

The plan calls for higher spending through 2010 on airports, highways and other infrastructure, more aid to the poor and farmers, and tax cuts for exporters. That could boost demand for iron ore from Australia and Brazil, factory and construction equipment from the United States and Europe, and industrial components from throughout Asia.

“Faster growth in China will be better for its neighbors. For every country in the region, it’s either their top trading partner or is on the way to becoming the top,” said Tim Condon, Asia regional economist for the Dutch bank ING.

On a global scale, “countries that supply capital equipment look like they will be the front-line beneficiaries of this package,” he said.

Asian stock markets surged Monday on news of the plan, but world markets were mixed later in the day. Wall Street erased an early rally as enthusiasm for the Chinese package gave way to anxiety about how U.S. companies will survive a severe pullback in spending.

China’s economic growth slowed to 9 percent in the last quarter, down from last year’s stunning 11.9 percent and its lowest level in five years. Export orders have fallen sharply as global demand weakens, leading to layoffs and factory closures.

Analysts have slashed forecasts of next year’s economic growth but said Monday that with the new stimulus it should be at least 8 percent.

China’s announcement came as economic officials from the Group of 20 leading economies, which includes major wealthy and developing nations, called Sunday for increased government spending to boost the troubled global economy.

The United States has allocated $168 billion this year for tax rebates to individuals and tax breaks for businesses, in addition to the $700 billion to bail out troubled financial institutions.

Unlike China’s plan, it includes no spending on capital projects, though President-elect Barack Obama has supported an additional $50 billion stimulus package for infrastructure projects such as roads and bridges, intended to create jobs. House Speaker Nancy Pelosi urged Congress last week to approve a stimulus bill before the end of the year.

Meeting in Brazil, G20 finance ministers and central bank governors said emerging economies deserve a prominent role in talks to overhaul the world financial system.

Hu plans to press that demand in Washington at the leaders’ meeting on Saturday, a Chinese government spokesman said last week.

Still, Beijing’s announcement appears to exaggerate the size of its plan by including projects already under way, such as reconstruction from the devastating May earthquake in China’s southwest, said Sheridan Chan, an economist for Moody’s Economy.com.

“The exaggeration highlights the government’s desperation to revive sentiment, which is perhaps the key factor to sustaining growth amid global turmoil,” Chan said.

Beijing’s stimulus package represents another drastic step away from lending curbs and other anti-inflation measures it imposed over the past three years, but has been rolling back since mid-2008 as growth slowed.

Wholesale inflation eased in October, which gives authorities more leeway to stimulate the economy without igniting new price rises, according to data reported Monday. The government said producer prices rose 6.6 percent in October from a year earlier, down from August’s 12-year high of 10.1 percent.

China switched its official goal in mid-2008 from a single focus on fighting inflation to a dual target of ensuring fast economic growth while also containing price rises. It has cut interest rates three times in recent weeks and lifted limits on how much each Chinese bank can lend.

The new stimulus plan depends heavily on getting the country’s companies to invest, economists said.

Beijing might supply as little as one-quarter of the announced spending, or $145 billion, with the rest coming from state companies, bank lending or bond sales by local authorities, said Ting Lu, a Merrill Lynch economist.

That might require regulators to ease lending and investment curbs, said UBS Securities economist Tao Wang.

“With this strong signal that comes from this package that the government will put its own money on the line, that could bring about matching bank lending and promote corporate investment,” Wang said.

****

Associated Press researcher Bonnie Cao in Beijing contributed to this report.

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RISING DEMAND MAKES INDIA A SUGAR IMPORTER

Posted by Gilmour Poincaree on November 11, 2008

11 Nov 2008, 0152 hrs IST, Prabha Jagannathan, ET Bureau

NEW DELHI: India, the world’s largest consumer and second-largest producer of sugar, is turning into a India, the world’s largest consumer and second-largest producer of sugar net importer of the sweetener as growth in population and household incomes leads to higher consumption and forces the country to meet domestic demand from other nations.

Sugar consumption has increased by two million tonnes in the past two years, pushing up the annual domestic consumption to about 23 mn tonnes from only 19 mn tonnes in 2005-06. Consumption is growing by over 4% annually, but the government prefers to keep tightlipped about it and pegs the annual sugar consumption at only 21 mn tonnes.

This means domestic consumption will surpass the projected output (22 mn tonnes at present) for the 2008-09 year, paving the way for sugar imports and sharpening domestic sugar prices for both industrial and retail consumers. Analysts have already projected that India will be a sugar importer from the 2009-10 sugar year.

In February this year, the core platform for private sector sugar units, the Indian Sugar Mills Association (ISMA), hiked its domestic consumption figures from 19 mn tonnes to 21 mn tonnes, against an overall production level of 28.4 mn tonnes. It also projected domestic sugar consumption levels for 2007-08 sugar year to at least 22.5 mn tonne, up from the official figure of 21 mn tonnes.

Keeping domestic sugar consumption level low would mean that the carryover stocks from last year would be lower by two million tonnes, at about 9 mn tonnes. Compared to the lower government figures, industry estimates for 2007-08 sugar year (Indian Sugar, September 2008) are that internal consumption was a whopping 22.5 mn tonnes (against production of 26.3 mn tonnes and availability, including carryover stocks, of 35.5 mn tonnes) compared to 21 mn tonnes in 2006-07 and 18.5 mn tonnes in 2005-06.

Lower carryover stocks and the projected low sugarcane output projected for 2008-09 could spell high domestic sugar prices, something that the poll-bound UPA government would prefer not to face in the first half of next year when general elections are held.

Sugar prices are among the most sensitive of election issues and the fact that the domestic prices have shot up from around Rs 15/kg in the retail market earlier this year to around Rs 20/kg now has already forced the Centre to pull out all stops to boost open market availability and drag down or at least hold prices.

Ironically, most recent studies show that sugar consumption has gone up significantly on account of industry (such as ice creams, soft drinks, pastries, chocolates and the pharma sector) and not on account of domestic consumption by the economically weaker sections for whom the government commands 10% of the production by mills for levy sugar.

That domestic sugar consumption was growing at a rapid pace was acknowledged as early as the Mahajan committee report, which showed progressive increase from 11.2 mn tonnes (1991-92) to 13.0 mn tonnes (1995-96), except for 1993-94 when there was steep fall in output. Consumption, the report held, increased by 64.78% between 1984-85 and 1995-96 at a healthy 4.31% per annum.

The report also observed a fall in the share of expenditure on sugar in rural areas and a much higher increase in sugar expenditure in urban areas. And that was a whole decade or more from today, when the consumption of processed foods and soft drinks has more than doubled.

More recently, the Tuteja committee report also observed that India’s consumption went up annually in a marked manner — from 16.7 mn tonnes in 1999-00 to a significantly higher 17.4 mn tonnes in 2000-01 and to 17.9 mn tonnes in 2001-02. Between 1996-97 and 2001-02, India’s consumption of sugar as a percentage of world consumption went by from 12.4% to 13.4%.

In June 2007, a KPMG report held that in the share of total sugar consumption, the share of gur and khandsari declined. Industrial (dairy, confectionery, bakery and beverages which accounted for 5.26 mt or 30% of non-levy share), small business and high-income household segments accounted for 74% (13 mn tonne) of the total non-levy sugar consumption of 17.52 mn tonne in 2006-07.

According to the report, per capita sugar consumption, which went up with rise in per capita income, stood at an average 2.2 kg/month at the lowest income level, while at the highest income levels, the average household sugar consumption was at 5.11 kg per month.

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GOLD JUMPS 4% ON CHINA’S BAILOUT PACKAGE

Posted by Gilmour Poincaree on November 11, 2008

11 Nov 2008, 0155 hrs IST, REUTERS

LONDON: Gold rose more than 4% on Monday as dollar weakness and sharp gains across commodities Photo - WN - Periasamysharpened appetite for the precious metal, but retreated from highs as the dollar recovered some lost ground against the euro. A near $600-bn economic stimulus package announced by China on Sunday helped allay risk aversion and fuelled gains in equities as well as oil and base metals, carrying gold higher.

In London, spot gold touched an intraday peak of $767.80 an ounce, before easing back to $751.10/753.10 by 21:30 pm IST, against $735.95 in New York on Friday. US December gold futures rose more than 2% and were trading at $751.30, up $17.10.

In Mumbai, a major gold hub in India, the price of yellow metal hardened further on the back of stockists’ buying, supported by a rally in international markets. Standard and pure gold rose by Rs 70 and Rs 80 to Rs 11,785 and Rs 11,850 per 10 gm, respectively.

“The weakness in the US dollar… and the rise in crude oil and industrial metals reflect the announcement made by Chinese government on Sunday for a stimulus package of roughly $568 bn,” said Dresdner Kleinwort consultant Peter Fertig. “

This should spur investment in housing and infrastructure in the next two years, which will (lead to) stronger demand for energy and base metals. This is also a supportive factor for gold.”

China launched its stimulus plan on Sunday, pledging nearly $600 bn in extra spending by the end of 2010. Base metals jumped in response to the plan, with copper surging nearly 10%, nickel 13% and zinc around 7% following the news. All the metals have lost substantial ground in recent months.

At a G-20 meeting in Brazil, finance ministers and central bankers representing 90% of the world’s economy said they will take “all necessary measures” to normalise the financial markets and counter the backlash to the credit crisis.

The dollar weakened against the euro as risk appetite improved. A recovery in the stock markets prompted investors to move into higher-yielding currencies such as the euro and the yen.

A softer dollar tends to benefit gold, which is often bought as a hedge against weakness in the US currency. The currency’s recovery from lows against the euro later led gold to pare gains. Among other precious metals, silver tracked gold higher to a peak of $10.51 an ounce, up 5%, before settling back to $10.29/10.39 an ounce from $9.99.

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CHINA MOLY A STEAL UNDER $2

Posted by Gilmour Poincaree on November 10, 2008

Monday, November 10, 2008

Many Hong Kong investors are asking whether it’s time to get back into the stock market.

Dr Check agrees that many shares are cheap now, even cheaper than during the SARS epidemic in 2003.

Also there is around HK$6.03 trillion in deposits in the Hong Kong banking system.

But if the US and European economies slow down, falling corporate earnings will lift the expected price AP photoearnings ratio. Stock valuations will become expensive again. So far, we cannot see any decoupling in the Hong Kong and mainland markets, but the percentage drops in these bourses have been greater than on Wall Street.

So, Dr Check’s advice is to wait until two final signs emerge – when the market is so bearish nobody wants to talk about buying stocks and when even bad news cannot push a stock price down any further.

If you go bargain hunting, stick to relatively safe shares for the short term and aim for a profit of 20 percent.

One such stock is China Molybdenum (3993), the country’s second- biggest producer of the metal used in steelmaking. In August, the management forecast a global shortage of 2,000 tonnes this year and probably next year as production declines. This will keep prices from falling.

UBS cut its target price for China Molybdenum to HK$4.40 from HK$6.20, to reflect a lower price forecast and higher risk-free rate, but retained its “buy” call. UBS also lowered its earnings per share estimate for the firm by 39 percent for 2009 and 12 percent for 2010.

CLSA expects earnings to fall to 1.72 billion yuan (HK$1.95 billion) and 1.43 billion yuan in 2009 and 2010, respectively.

China Molybdenum was listed in Hong Kong in April last year at HK$6.80 per share. It rose to an all- time high of HK$21.40 after six months before diving to HK$1.46 recently. It closed at HK$2.76 on Friday.

The company raised HK$7.1 billion from its IPO. Recent figures show that it still has HK$5.9 billion cash or HK$1.29 per share. If the share falls below HK$2 again, it’s really worth a pick.

Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.

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OIL UP OVER 4 PCT, TOPS $64 ON CHINA STIMULUS, G20

Posted by Gilmour Poincaree on November 10, 2008

by Fayen Wong – Reuters – (Editing by Clarence Fernandez)

Published: Sunday, November 09, 2008

PERTH (Reuters) – Oil leapt more than $3 to over $64 a barrel on Monday, fueled by top exporter Saudi An oil pump is seen on the shore near Santa Cruz del Norte, Cuba June 5, 2008. REUTERS - Claudia DautArabia’s plans to cut December supplies to Asia, a weaker dollar and hopes that global economies’ plans to lift growth could avert recession.

Saudi Arabia has told refiners in Asia it would cut December supplies by 5 percent, providing the most visible evidence yet that it is adhering to OPEC’s agreement last month to reduce output.

U.S. light crude for December delivery rose $2.96, or 4.55 percent, to $64.00 a barrel by 7:59 p.m. EST, after rising as much as $3.26. London Brent crude rose $1.85 to $59.20.

The proposals made at the G20 meeting and the relief package out of China really helped the markets this morning,” said Mark Pervan, a senior commodities analyst at the Australia & New Zealand Bank.

“The message over the weekend was supportive and it is clear that governments around the world will do all it takes to prevent a deep global recession.”

At the G20 group’s annual meet in Brazil, finance ministers and central bank governors representing 90 percent of the world’s economy vowed to take all necessary measures to get financial markets back on their feet and counter the credit crisis.

China went a step further and launched a huge stimulus plan on Sunday worth nearly $600 billion, kicking off what could be a round of big spending or interest rate cuts by leading economies to stave off a recession in many countries.

China’s solid government spending package to boost domestic demand is “good news” that will help the global economy ride out the financial crisis, the International Monetary Fund’s managing director said.

The U.S. currency weakened broadly after data on Friday showed the U.S. economy shed more jobs than expected in October. But the yen fell against the dollar and euro on Monday as Asian shares were lifted by strong Wall Street gains and by China’s launch of its huge stimulus plan.

Oil lost nearly 10 percent last week and dipped below $60 the previous week, its lowest since March 2007, after a string of dismal economic data from the United States sharpened fears of a protracted global recession and growing U.S. energy stockpiles underscored falling demand in the world’s top energy consumer.

Government data on Friday showed U.S. employers cut payrolls by 240,000 in October. In addition, the Labor Department said the U.S. unemployment rate shot up to 6.5 percent from 6.1 percent in September, the highest since March 1994.

Oil’s tumble from July highs has already spurred OPEC to rein in supply from November 1, and some members of the cartel are talking of reducing production further.

OPEC will cut oil output again if the trend toward lower prices and slowing demand growth are unchanged when the group meets in December, Iran’s OPEC Governor Mohammad Ali Khatibi told Reuters on Sunday, adding to comments by Venezuela’s oil minister Rafael Ramirez last week that OPEC should act again to reduce output by at least 1 million barrels per day (bpd).

Iran’s Khatibi added that the credit crisis and economic slowdown could shave as much as 3 million bpd from global crude demand.

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SOUTH KOREA INJECTS $11 BILLION INTO ECONOMY

Posted by Gilmour Poincaree on November 4, 2008

Published: November 4, 2008

by Victoria Burnett and Bettina Wassener

South Korea announced a $11 billion stimulus package on Monday and the Spanish government unveiled a program to allow out-of-work homeowners to defer mortgage payments, the latest in a string of steps by governments seeking to prop up economic growth and cushion the effect of the financial crisis.

On Tuesday, Australia joined the trend when its central bank cut a key lending rate.

South Korea, which has been hit hard by U.S. and European consumers’ reluctance to spend money on goods like electronics and cars, and where the financial crisis has left local banks struggling to pay billions of dollars in short-term loans, has announced a series of emergency measures in recent weeks.

The South Korean president, Lee Myung Bak, announced measures that include an additional 11 trillion won in government spending and 3 trillion won in tax cuts, a total equivalent to $11 billion. These are aimed mainly at the real estate and construction industries.

The South Korean finance minister, Kang Man Soo, was quoted by Bloomberg News as saying, “Now is the time that a financial markets crisis is being transferred to the real sector, and we need to get down to start to manage the situation.”

The package is intended to raise economic growth next year by an additional one percentage point, to about 4 percent. It was announced as fresh data showed that South Korean export growth had slowed to its lowest levels in 13 months in October, further evidence that the downturn in the United States and Europe was spilling over into the export-driven economies of Asia.

Economists said the export figures were also likely to prompt the South Korean central bank to cut the cost of borrowing at its policy meeting Friday. That would be the second cut in two weeks, coming soon after the bank staged a surprise cut, of three-quarters of a percentage point at an emergency meeting last week.

The Spanish move came as other countries with troubled housing markets, including the United States, are debating steps to help people stave off foreclosure, but have yet to enact any direct measures.

Spain is grappling with an economy that is slipping into recession and has the highest unemployment rate in the European Union.

Prime Minister José Luis Rodríguez Zapatero told a news conference in Madrid that the package would also include incentives for employers to hire the jobless.

Under the mortgage relief program, unemployed homeowners and some retirees could postpone payment of half their monthly bill for two years starting in January — as long as the amount deferred each month was no more than 500 euros, or about $635. The offer would apply to mortgages of up to 170,000 euros and could affect about half a million people, Zapatero said.

The Spanish government will underwrite the deferred payments, which may be spread over 10 years, Zapatero said.

Spain had been a European leader in terms of job creation in the last decade, as well as in home building. But the economy has ground to a halt as the property bubble deflated and the global credit crisis hit home.

In an effort to persuade businesses to hire those now receiving benefits, Zapatero said the government would pay companies 1,500 euros a year for each job given to an unemployed worker supporting a family. He also said bonuses would be introduced for companies hiring people working in research and development and renewable energy.

The package is intended to bolster growth next year by an additional percentage point to around 4 percent, and was announced as fresh data showed export growth in October had slowed to its lowest pace in 13 months.

Weak economic data in Australia led that country’s central bank to reduce its key rate Tuesday. The cut was the third since Sept. 3.

The moves have been intended to prop up the Australian economy, which is highly dependent on raw materials production and has suffered from falling prices for iron ore and copper in recent months. Data released Monday showed retail sales fell 1.1 percent in September, much more than had been expected, while house prices fell 1.8 percent during the third quarter.

China, which last week joined a flurry of interest rate cuts in the United States and elsewhere, over the weekend announced it was loosening limits on bank lending. Signs in China also indicate that economic growth is slowing.

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GLOBAL OIL GIANTS TO EXPAND INVESTMENT IN INDONESIA

Posted by Gilmour Poincaree on November 4, 2008

Monday, November 03, 2008

Xinhua News Agency

The world’s largest oil company Exxon Mobil Corp. and Japan’s largest explorer Inpex Corp. pledged a total investment of at least 144.5 million U.S. dollars in new blocks in Indonesia over the next three years, with their newly won exploration rights, an official was quoted by the Jakarta Post as saying on Saturday.

The two companies were among the winners of nine new oil and gas blocks announced by the Mineral Resources Ministry on Friday.

“The government expects to draw in a total investment of 465 million dollars from the nine blocks, including signing bonuses of 69.5 million U.S. dollars,” said the Indonesian Mineral Resources Ministry’s director general for oil and gas, Evita H. Legowo.

Exxon, through its subsidiary Esso Exploration Int. Ltd, won the rights to explore the Gunting block in East Java. It plans to invest 17 million dollars in the project for the first three years.

Inpex won the exploration rights in the Semai II block off West Papua. It will carry out exploration with two partners, Consortia Murphy Overseas Ventures Inc and PTT EP. They will jointly inject 127.5 million U.S. dollars in the first three years.

Copyright 2008 XINHUA NEWS AGENCY

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THE GM GENOCIDE: THOUSANDS OF INDIAN FARMERS ARE COMMITTING SUICIDE AFTER USING GENETICALLY MODIFIED CROPS

Posted by Gilmour Poincaree on November 3, 2008

Last updated at 12:48 AM on 03rd November 2008

by Andrew Malone

When Prince Charles claimed thousands of Indian farmers were killing themselves after using GM crops, he was branded a scaremonger. In fact, as this chilling dispatch reveals, it’s even WORSE than he feared.

The children were inconsolable. Mute with shock and fighting back tears, they huddled beside their mother as friends and neighbours prepared their father’s body for cremation on a blazing bonfire built on the cracked, barren fields near their home.

As flames consumed the corpse, Ganjanan, 12, and Kalpana, 14, faced a grim future. While Shankara Mandaukar had hoped his son and daughter would have a better life under India’s economic boom, they now face working as slave labour for a few pence a day. Landless and homeless, they will be the lowest of the low.

Shankara, respected farmer, loving husband and father, had taken his own life. Less than 24 hours PHOTO - Human tragedy - A farmer and child in India's SUICIDE BELTearlier, facing the loss of his land due to debt, he drank a cupful of chemical insecticide.

Unable to pay back the equivalent of two years’ earnings, he was in despair. He could see no way out.

There were still marks in the dust where he had writhed in agony. Other villagers looked on – they knew from experience that any intervention was pointless – as he lay doubled up on the ground, crying out in pain and vomiting.

Moaning, he crawled on to a bench outside his simple home 100 miles from Nagpur in central India. An hour later, he stopped making any noise. Then he stopped breathing. At 5pm on Sunday, the life of Shankara Mandaukar came to an end.

As neighbours gathered to pray outside the family home, Nirmala Mandaukar, 50, told how she rushed back from the fields to find her husband dead. ‘He was a loving and caring man,’ she said, weeping quietly.

‘But he couldn’t take any more. The mental anguish was too much. We have lost everything.’

Shankara’s crop had failed – twice. Of course, famine and pestilence are part of India’s ancient story. PHOTO - Distressed - Prince Charles has set up charity Bhumi Vardaan Foundation to address the plight of suicide farmers
But the death of this respected farmer has been blamed on something far more modern and sinister: genetically modified crops.

Shankara, like millions of other Indian farmers, had been promised previously unheard of harvests and income if he switched from farming with traditional seeds to planting GM seeds instead.

Beguiled by the promise of future riches, he borrowed money in order to buy the GM seeds. But when the harvests failed, he was left with spiralling debts – and no income.

So Shankara became one of an estimated 125,000 farmers to take their own life as a result of the ruthless drive to use India as a testing ground for genetically modified crops.

The crisis, branded the ‘GM Genocide’ by campaigners, was highlighted recently when Prince Charles claimed that the issue of GM had become a ‘global moral question’ – and the time had come to end its unstoppable march.

Speaking by video link to a conference in the Indian capital, Delhi, he infuriated bio-tech leaders and some politicians by condemning ‘the truly appalling and tragic rate of small farmer suicides in India, stemming… from the failure of many GM crop varieties’.

Ranged against the Prince are powerful GM lobbyists and prominent politicians, who claim that genetically modified crops have transformed Indian agriculture, providing greater yields than ever before.

The rest of the world, they insist, should embrace ‘the future’ and follow suit.

So who is telling the truth? To find out, I travelled to the ‘suicide belt’ in Maharashtra state.

What I found was deeply disturbing – and has profound implications for countries, including Britain, debating whether to allow the planting of seeds manipulated by scientists to circumvent the laws of nature.

For official figures from the Indian Ministry of Agriculture do indeed confirm that in a huge humanitarian crisis, more than 1,000 farmers kill themselves here each month.

Simple, rural people, they are dying slow, agonising deaths. Most swallow insecticide – a pricey substance they were promised they would not need when they were coerced into growing expensive GM crops.

It seems that many are massively in debt to local money-lenders, having over-borrowed to purchase GM seed.

Pro-GM experts claim that it is rural poverty, alcoholism, drought and ‘agrarian distress’ that is the real reason for the horrific toll.

But, as I discovered during a four-day journey through the epicentre of the disaster, that is not the full story.

In one small village I visited, 18 farmers had committed suicide after being sucked into GM debts. In PHOTO - Death seeds - A Greenpeace protester sprays milk-based paint on a Monsanto research soybean field near Atlantic, Iowasome cases, women have taken over farms from their dead husbands – only to kill themselves as well.

Latta Ramesh, 38, drank insecticide after her crops failed – two years after her husband disappeared when the GM debts became too much.

She left her ten-year-old son, Rashan, in the care of relatives. ‘He cries when he thinks of his mother,’ said the dead woman’s aunt, sitting listlessly in shade near the fields.

Village after village, families told how they had fallen into debt after being persuaded to buy GM seeds instead of traditional cotton seeds.

The price difference is staggering: £10 for 100 grams of GM seed, compared with less than £10 for 1,000 times more traditional seeds.

But GM salesmen and government officials had promised farmers that these were ‘magic seeds’ – with better crops that would be free from parasites and insects.

Indeed, in a bid to promote the uptake of GM seeds, traditional varieties were banned from many government seed banks.

The authorities had a vested interest in promoting this new biotechnology. Desperate to escape the grinding poverty of the post-independence years, the Indian government had agreed to allow new bio-tech giants, such as the U.S. market-leader Monsanto, to sell their new seed creations.

In return for allowing western companies access to the second most populated country in the world, with more than one billion people, India was granted International Monetary Fund loans in the Eighties and Nineties, helping to launch an economic revolution.

But while cities such as Mumbai and Delhi have boomed, the farmers’ lives have slid back into the dark ages.

Though areas of India planted with GM seeds have doubled in two years – up to 17 million acres – many famers have found there is a terrible price to be paid.

Far from being ‘magic seeds’, GM pest-proof ‘breeds’ of cotton have been devastated by bollworms, a voracious parasite.

Nor were the farmers told that these seeds require double the amount of water. This has proved a matter of life and death.

With rains failing for the past two years, many GM crops have simply withered and died, leaving the farmers with crippling debts and no means of paying them off.

Having taken loans from traditional money lenders at extortionate rates, hundreds of thousands of small farmers have faced losing their land as the expensive seeds fail, while those who could struggle on faced a fresh crisis.

When crops failed in the past, farmers could still save seeds and replant them the following year.

But with GM seeds they cannot do this. That’s because GM seeds contain so- called ‘terminator technology’, meaning that they have been genetically modified so that the resulting crops do not produce viable seeds of their own.

As a result, farmers have to buy new seeds each year at the same punitive prices. For some, that means the difference between life and death.

Take the case of Suresh Bhalasa, another farmer who was cremated this week, leaving a wife and two children.

As night fell after the ceremony, and neighbours squatted outside while sacred cows were brought in from the fields, his family had no doubt that their troubles stemmed from the moment they were encouraged to buy BT Cotton, a geneticallymodified plant created by Monsanto.

‘We are ruined now,’ said the dead man’s 38-year-old wife. ‘We bought 100 grams of BT Cotton. Our crop failed twice. My husband had become depressed. He went out to his field, lay down in the cotton and swallowed insecticide.’

Villagers bundled him into a rickshaw and headed to hospital along rutted farm roads. ‘He cried out that he had taken the insecticide and he was sorry,’ she said, as her family and neighbours crowded into her home to pay their respects. ‘He was dead by the time they got to hospital.’

Asked if the dead man was a ‘drunkard’ or suffered from other ‘social problems’, as alleged by pro-GM officials, the quiet, dignified gathering erupted in anger. ‘No! No!’ one of the dead man’s brothers exclaimed. ‘Suresh was a good man. He sent his children to school and paid his taxes.

‘He was strangled by these magic seeds. They sell us the seeds, saying they will not need expensive pesticides but they do. We have to buy the same seeds from the same company every year. It is killing us. Please tell the world what is happening here.’

Monsanto has admitted that soaring debt was a ‘factor in this tragedy’. But pointing out that cotton production had doubled in the past seven years, a spokesman added that there are other reasons for the recent crisis, such as ‘untimely rain’ or drought, and pointed out that suicides have always been part of rural Indian life.

Officials also point to surveys saying the majority of Indian farmers want GM seeds – no doubt encouraged to do so by aggressive marketing tactics.

During the course of my inquiries in Maharastra, I encountered three ‘independent’ surveyors scouring villages for information about suicides. They insisted that GM seeds were only 50 per cent more expensive – and then later admitted the difference was 1,000 per cent.

(A Monsanto spokesman later insisted their seed is ‘only double’ the price of ‘official’ non-GM seed – but admitted that the difference can be vast if cheaper traditional seeds are sold by ‘unscrupulous’ merchants, who often also sell ‘fake’ GM seeds which are prone to disease.)

With rumours of imminent government compensation to stem the wave of deaths, many farmers said they were desperate for any form of assistance. ‘We just want to escape from our problems,’ one said. ‘We just want help to stop any more of us dying.’

Prince Charles is so distressed by the plight of the suicide farmers that he is setting up a charity, the Bhumi Vardaan Foundation, to help those affected and promote organic Indian crops instead of GM.

India’s farmers are also starting to fight back. As well as taking GM seed distributors hostage and staging mass protests, one state government is taking legal action against Monsanto for the exorbitant costs of GM seeds.

This came too late for Shankara Mandauker, who was 80,000 rupees (about £1,000) in debt when he took his own life. ‘I told him that we can survive,’ his widow said, her children still by her side as darkness fell. ‘I told him we could find a way out. He just said it was better to die.’

But the debt does not die with her husband: unless she can find a way of paying it off, she will not be able to afford the children’s schooling. They will lose their land, joining the hordes seen begging in their thousands by the roadside throughout this vast, chaotic country.

Cruelly, it’s the young who are suffering most from the ‘GM Genocide’ – the very generation supposed to be lifted out of a life of hardship and misery by these ‘magic seeds’.

Here in the suicide belt of India, the cost of the genetically modified future is murderously high.

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PUBLISHED BY ‘DAILY MAIL’ (UK)

Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, COMMODITIES MARKET, COTTON, ECONOMIC CONJUNCTURE, ECONOMY, FARMING DEBTS, FINANCIAL CRISIS 2008/2009, GENETICALLY MODIFIED AGRO-PRODUCTS, INDIA, INTERNATIONAL, THE WORKERS, VEGETABLE FIBERS | Leave a Comment »

FARMERS ASSAIL IMF TERMS FOR LOAN (Pakistan)

Posted by Gilmour Poincaree on November 3, 2008

November 03, 2008 – Monday

Bureau Report

HYDERABAD, Nov 2: The Sindh Abadgar Board has rejected the government proposal for obtaining $5 billion loan from the International Monetary Fund and cautioned that if the government does not change its decision it would be tantamount to signing the death warrant of the national economy.

The board leaders said at a meeting held on Saturday under its chairman Abdul Majeed Nizamani that the IMF always targeted agriculture sector and the fund was more likely to impose condition to end subsidy for agriculture sector.

The meeting pointed out that the IMF loan would be extremely dangerous for the national economy and political stability of the country and demanded that the president and prime minister bring the matter before the National Assembly.

The meeting advised the government to make efforts to obtain $1.5 billion from China by mortgaging shares of government corporations and $800 million reimbursement from the United States under the coalition support fund for war on terror.

The meeting warned that if the government fell into the IMF trap and withdrew subsidy on agriculture, it would have to spend more money on importing food items.

The meeting resolved to make the “Grow More Wheat” campaign a success and demanded that the government make all the purchasing centres for wheat functional in Umerkot, Mirpurkhas, Badin and other areas where wheat was harvested earlier.

The meeting said that keeping in view 35 per cent shortage of water in the system, Irsa should be asked to ensure supply of 11.7 million acre foot water of Sindh’s share.

The meeting stressed the need for safeguarding wheat from the smugglers and disclosing the names of “30 respectable people” involved in the grain’s smuggling as disclosed by the prime minister himself on the floor of the assembly.

The meeting said that sugarcane growers were switching over to other crops largely due to government’s helplessness before PSMA over the past 10 years, which was very dangerous for sugar industry. The sugar mills must start crushing season according to government notification, the meeting demanded.

SCA: The Sindh Chamber of Agriculture warned on Sunday that delay in start of crushing season would seriously affect wheat cultivation and lead to wheat crisis in the coming months.

The senior vice-president of the chamber, Mir Murad Ali Khan Talpur, said at the chamber’s meeting that the government had fixed price of cotton at Rs1,900 per maund but the growers were being forced to sell their produce at Rs400 to Rs500 per maund.

The chamber’s general secretary, Akhund Ghulam Mohammad Siddiqui, complained that open blackmarketing of urea fertiliser had inflicted huge losses on the growers.

Sain Bux Rind said that Pasco’s failure to establish purchase centres for rice had created an opportunity for the rice traders to fleece growers. The government had fixed purchase of Irri-6 at Rs900 per maund but the growers were forced to sell their produce at Rs500 per maund, he said.

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in AGRICULTURE, ASIA, COMMERCE, COMMODITIES MARKET, CRIMINAL ACTIVITIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, GRAINS, IMF, INDUSTRIAL SUBSIDIES, INTERNATIONAL, PAKISTAN, RICE, SMUGGLING, SUGAR, WHEAT | Leave a Comment »

ASIAN MARKETS GAIN AS HANG SENG RISES 3 PERCENT

Posted by Gilmour Poincaree on November 3, 2008

Nov 3, 3:56 AM EST

by Jeremiah Marquez – AP Business Writer

HONG KONG (AP) — Asian stock markets rose Monday, with Hong Kong’s benchmark advancing 3 percent, as investors appeared encouraged by government efforts to help the global economy weather the financial crisis.

Across the region, markets seemed to shrug of more dispiriting economic data and focus on fresh stimulus plans.

The Korea Composite Stock Price added 1.4 percent after the government unveiled nearly $11 billion in new spending measures to protect South Korea from sliding into recession.

In Australia, the S&P/ASX 200 was up more than 5 percent despite troubling evidence of slowing manufacturing and retail sales, as traders anticipated a further interest rate cut from the country’s central bank on Tuesday.

India’s main stock index rose 4.6 percent after a central bank decision over the weekend to cut the nation’s key interest rate and release $8.1 billion into its financial system.

Hong Kong’s blue-chip Hang Seng Index was among the region’s top gainers, climbing 414, or 3 percent, to 14,382, Singapore’s key index also rose by about 4 percent.

“I don’t think it’s a massive change in direction, more a case of a little more confidence going forward in massively oversold stocks and … global organized attempts to deal with the issues,” said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong.

U.S. stock index futures were up modestly, suggesting that Wall Street would open higher. The Dow Jones industrial average added 144.32, or 1.6 percent, to close Friday at 9,325.01. Dow futures were up 0.9 percent, while S&P futures were up 0.7 percent.

Financials were sharply higher in many Asian markets. China’s ICBC gained 9.6 percent in Hong Kong, top Indian lender ICICI Bank Ltd. rose 8 percent, and leading Australian investment bank Macquarie Group Ltd. surged 12.4 percent.

Elsewhere, the prospect of interest rate cuts from the Philippine central bank buoyed the country’s market for the fourth straight session.

Shanghai’s benchmark, though, erased early gains to trade in negative territory amid reports suggesting Chinese manufacturing, the engine behind the country’s phenomenal growth, was contracting. The index closed down 0.5 percent.

Japanese financial markets were closed Monday for a public holiday and due to reopen Tuesday.

Global stock markets could take direction from the U.S. this week after the country’s presidential election on Tuesday helps fill in some blanks about how Washington might shape economic policy in the months ahead.

Analysts offered differing opinions of the election’s likely impact on markets.

Chelsea Dipasupil, head of research at RCBC Securities Inc., said the Philippine market appeared to be welcoming the possibility of Democratic presidential nominee Sen. Barack Obama winning.

“Since it is Obama leading surveys, it might be that there is a renewed confidence in a new leadership,” she said. President George W. Bush and the Republicans “had become unpopular because of some of his policies and the current economic crisis,” she said.

CFC Seymour analyst Dariusz Kowalczyk said an Obama win might provide “economic policy clarity” but Democratic control of U.S. economic policy “would risk disincentivising entrepreneurship.”

That could weigh on the long-term outlook for productivity and growth, which could be “market-negative” in the medium term, the Hong Kong-based analyst said in a research note.

Investors will also keep an eye on U.S. reports due on manufacturing, the service sector and employment in the world’s largest economy amd major market for Asia’s exports.

October was a brutal month for Asian markets, but ended with tentative signs of recovery. Hong Kong’s Hang Seng Index shed about 23 percent during the month amid worries that the global financial crisis would erode corporate profits as investors dumped shares to meet redemptions back home. The benchmark dropped as low as 11,015.84 last Monday – its worst close since May 2004 – but has since bounced back.

The rise in Asian markets also lifted oil prices, which advanced 72 cents to $68.53 a barrel in Asian trade on the New York Mercantile Exchange.

The dollar gained 99.56 yen from 98.44 late Friday in New York, up sharply from the 13-year low of 91 yen touched Oct. 24. The euro was higher at $1.2867 from $1.2751.

AP Writer Hrvoje Hranjski in Manila contributed to this report.

© 2008 The Associated Press. All rights reserved.

Copyright 2008 Associated Press

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PUBLISHED BY ‘The Providence Journal’ (USA)

Posted in ASIA, AUSTRALIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HONG KONG, INDIA, OCEANIA, SOUTH KOREA, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

BSP SEEN TO EASE MONETARY POLICY – BSP assumes ‘counter-cyclical’ stance

Posted by Gilmour Poincaree on November 2, 2008

First Posted 18:17:00 11/02/2008

by Doris Dumlao – Philippine Daily Inquirer

THE BANGKO SENTRAL NG PILIPINAS (the Philippine central bank) is widely expected to ease monetary policy either by reducing the reserve requirement or overnight borrowing rates, or changing the terms of the high-yielding special deposit account (SDA).

The central bank already is in position to take this step following the fresh interest rate cuts by the US Federal Reserve and other major Asian central banks, bankers said.

“You need to be counter-cyclical,” BSP Deputy Governor Diwa Guinigundo told reporters. “When the economy is on a downswing, monetary policy … and fiscal policy, must be expansionary. And you must have regulatory forbearance.”

Guinigundo went on to explain that during good times, high capital charges are the norm.

“During downswings of the economy, you can temporarily ease policy and regulatory framework,” he added. “In the same manner, when you are experiencing an upswing in the business cycle, you should tighten monetary policy, tighten regulation, so that no one will grow to be so exuberant that they will forget there’s a limit to everything.”

But Guinigundo said the central bank would likely adopt regulations only as needed by the domestic financial system.

“If you announce a big package, that means you have a big problem,” Guinigundo said.

The fresh half-a-percentage point interest rate cut by the US Federal Reserve last week is seen to benefit the domestic economy.

“The broadly expected Fed rate cut should be positive for the domestic economy,” BSP Governor Amando Tetangco Jr. said. “It paves the way for a tempering of the expected deep recession in the United States.”

According to Tetangco, the move will help “shore up confidence both on Wall Street and Main Street … and help temper the negative feedback loop from the financial markets.”

The BSP chief earlier directed the central bank’s research department to study a possible cut in the reserve requirement.

Monetary easing can free up additional liquidity that can help perk up a sagging domestic economy by putting more money in consumers’ pockets, as well as making available more funds for business expansion.

The odds that the BSP would soon ease monetary policy gained ground after the outlook on inflation was seen to improve.

Seven out of nine treasury officials from different banks said the BSP would likely free up additional liquidity, while two said the central bank would keep a neutral stance.

“For this year, the BSP will likely limit SDA terms to 14 days or less, maybe lower the reserve requirement by 1 percentage and, if liquidity still seems shy, lower the overnight borrowing rate by 25 basis points,” said Reevie Vergara of Land Bank of the Philippines.

The BSP’s overnight borrowing rate currently stands at 6 percent. It has raised this key interest rate by a total of 100 basis points since June this year as it battled sharply rising consumer prices that drove the country’s inflation to 17-year highs.

The reserve requirement is the ratio of deposits that banks are required to keep in a low-yielding facility at the central bank. Currently set at 21 percent, the reserve requirement is another tool used by the BSP to manage liquidity in the financial system.

Ramon Lim of Philippine National Bank said the central bank, against all odds, could bring the overnight borrowing rate down to 5 percent this year and further to 4 percent by the first quarter of next year.

“There will likely be no change on reserve requirement unless the SDA is depleted and cost of money is still high,” Lim said.

Jose Emmanuel Hilado of Rizal Commercial Banking Corp. said the BSP would likely slash its overnight borrowing rate by 25 basis points this year and also cut the reserves by at least 1 percentage point.

Roland Avante of Chinatrust Philippines Commercial Bank projected that the central bank would cut the reserve requirement by up to 2 percentage points and reduce the overnight rate this month. He expected the overnight borrowing rate to drop to 4.5-5 percent by next year.

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PUBLISHED BY ‘INQUIRER.NET’ (Philippines)

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, PHILIPPINES, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

NO JOB CUTS IN IT INDUSTRY: NARAYANA MURTHY (India)

Posted by Gilmour Poincaree on November 2, 2008

1 Nov 2008, 1930 hrs IST, IANS

NEW DELHI: The global economic meltdown and the financial crisis looming large over the Indian NARAYANA MURTHYeconomy will not result in any downsizing or job cuts in the IT industry, says NR Narayana Murthy, founder of Infosys Technologies, one of India’s most reputed companies in the sector.

“There are no job cuts. The growth has certainly slowed down but it is not making any significant impact on us,” Murthy, who was in the national capital on Saturday to announce the finalists for Rhodes scholarships, said.

He also hinted that the net rate of growth of employment in his sector will stay in the green. “Despite reports of companies laying off some staff as a cost cutting measure, they have been advertising for new employees at the same time.”

According to him, the key challenges facing the Indian industry in these turbulent times were inflation and the psychological impact of the US crisis, leading some companies to hit the panic button.

He also said that the weakening of the rupee was just an offshoot of the global economic meltdown and was proving to be beneficial for the IT industry

“The foreign exchange rates are helping us and in some way, they mean higher revenue for my industry,” Murthy said, and added that a weaker rupee was making exports of Indian IT industry competitive vis-a-vis other countries.

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PUBLISHED BY ‘THE TIMES OF INDIA’

Posted in ASIA, DIGITAL INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDIA, INDUSTRIES, INTERNATIONAL, THE FLOW OF INVESTMENTS | Leave a Comment »

IRAN URGES INDIA TO COMMIT TO GAS PIPE PLAN

Posted by Gilmour Poincaree on November 2, 2008

1 Nov 2008, 2047 hrs IST, REUTERS

TEHRAN: Iran wants India to commit to a project to export Iranian gas via Pakistan to the south Asian giant and measures have already been discussed to ensure supply security, the Iranian oil minister said on Saturday.Analysts say India has been treading cautiously over the $7.6 billion pipeline project because it wants to reduce the risk of supplies being cut during times of tension with Pakistan, its long-time rival.

“Considering that we have lost many opportunities in the ‘peace pipeline’ project due to India’s procrastination, we have told that country to engage more actively,” Oil minister Gholamhossein Nozari said, Mehr News Agency reported.

Iran has previously said it would press ahead with the long-standing project even if India did not join in.

“The security of this project in each country will be with that country and negotiations so far have created conditions that have assured us this security will prevail,” Nozari said.

Nozari was speaking after talks in Tehran with visiting Indian Foreign Minister Pranab Mukherjee, who was quoted as saying: “India’s announcement to join the peace pipeline project means that India has no plan to leave it.”

“There has been much negotiation with Pakistan in connection with the cost of transit and establishment of security in the peace pipeline, of which the creation of a joint company might be able to bring about the means,” he added.

When asked if India was being influenced by US pressure to quit the project, Mukherjee replied: “We are an independent country with independent ties.”

The United States is trying to isolate Iran over its disputed nuclear plans and has been urging other countries and companies not to do business with the Islamic Republic.

Washington accuses Iran of seeking to build atomic weapons, a charge Tehran denies. Iran, the world’s fourth biggest oil producer with the second biggest gas reserves, says it wants nuclear energy so it can save its oil and gas for export.

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PUBLISHED BY ‘THE TIMES OF INDIA’

Posted in ASIA, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, MACROECONOMY, NATURAL GAS, USA | Leave a Comment »

FARMERS ASKED NOT TO SELL COTTON AT LOW PRICE (India)

Posted by Gilmour Poincaree on November 2, 2008

October 31, 2008 Friday

By Our Correspondent

MULTAN, Oct 30: Foreign Minister Shah Mahmood Qureshi on Thursday urged farmers to avoid selling their crops at cut prices because the industrialists had no other option but to purchase cotton from the local market.

Speaking at a workshop on BT cotton, organised by the Bahauddin Zakariya University’s Biotechnology Department, the foreign minister claimed that the industrialists would not be able to import cotton due to dollar appreciation.

He said the government had announced the procurement prices of cotton, rice and other crops and the farmers should not worry about the current market situation.

“What we need to do is fight the multiple challenges, that is, economic crisis, electricity, water and gas shortage, instead of bickering about the issues for which the previous government was responsible.”

In order to make political gains, he said, the previous government had issued fabricated statistics about economy and did not generate even a single megawatt of electricity.

The foreign minister said some ‘vested interests’ were creating an impression that the country was on the verge of default but “it is my promise that neither the country will default nor will the government freeze accounts”.

He said two science and technology universities would be established, one in Multan and the other in Lahore.

Bahauddin Zakariya University Vice-Chancellor Dr Muhammad Zaffarullah said the agriculture sector was facing huge losses despite being the major contributor to economy.

“We can make up for the losses with the help of engineering and biotechnology,” he said, requesting the foreign minister to help in release of funds for the construction of the biotechnology department building.

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PUBLISHED BY ‘DAWN’ (India)

Posted in AGRICULTURE, ASIA, COMMERCE, COMMODITIES MARKET, COTTON, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, TEXTILE INDUSTRIES, VEGETABLE FIBERS | Leave a Comment »