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CHINA CONSTRUCTION MACHINERY INDUSTRY REPORT 2007 TO 2008

Posted by Gilmour Poincaree on November 2, 2008

30/10/2008

Copyright: M2 Communications Ltd.

Source: M2 PressWIRE

According to the latest statistics of China Construction Machinery Association of CCMA, sales revenue of China construction machinery industry in 2007 reached above CNY210 billion, ranking the fourth place in the entire China machinery industry, ranking the second place in the world just after the United States of America. Its existing market share accounts for one sixth of the global total. In 2007, China’s import and export of construction machinery industry continued a roaring growth. According to statistics of General Administration of Customs, China’s total trade volume of import and export of construction machinery reached US$13.64 billion, up 52.6% year on year. In which, import volume was S$4.94 billion, up 25.7% on year, and export volume was US$8.7 billion, up 73.5% on year, resulting in a trade surplus of US$3.76 billion.

China’s construction machinery industry will maintain a rapid growth in 2008, in which product mix determines investment value. It is estimated that the revenue growth rate of China’s construction machinery industry will be about 45% in 2008 and 38% in 2009. In the future development of China’s construction machinery industry, the companies, which have advantages in product technology and product mix, will have outstanding investment value. From the perspective of regional sales of construction machinery, provinces in central and west parts of China were on the top and the growth rates of sales in these regions were also the fastest.

Based on industry development track in the past two years, we can draw the conclusion that the industry boom was non-linear and growth in booming period was beyond company’s expectation. Sales growth of construction machinery is close related with its downstream industries, including real estate, railway construction and urban mass transit construction. In the process of rapid development of China’s urbanization, demand of real estate industry and infrastructure construction for construction machinery is inevitably on the upward trend.

http://www.companiesandmarkets.com/link.asp?id=N6EDPGK0D47970

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(M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com).

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PUBLISHED BY ‘INSURANCE NEWS NET (INN)’

Posted in ASIA, CHINA, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, INDUSTRIAL PRODUCTION, INDUSTRIES | Leave a Comment »

BPO PLAYERS MINIMIZE ‘CRISIS’ IMPACT – A significant majority of Business Process Outsourcing (BPO) industry players believe the global financial crisis will have a positive or neutral effect on their operations in the Philippines.

Posted by Gilmour Poincaree on November 2, 2008

Sunday, November 2, 2008

by James A. Loyola

A survey of executives of companies in the BPO industry and suppliers to the industry showed though that almost a third of respondents said the crisis will have a negative impact on their operations and 44 percent said the crisis will result in a decrease in demand for their services.

Results indicated that the impact of the global financial crisis on the Philippine operations of BPO services provides will be mixed, but mostly positive.

A majority of respondents, 79 percent, representing a broad spectrum of BPO sectors said the global financial crisis will have a positive or neutral effect on their Philippine operations.

Forty-one percent of respondents said the global financial crisis will cause demand for their services to increase, and 38 percent said the global financial crisis will have a positive impact on their operations in the Philippines. Thirty percent said impact on their Philippine operations will be neutral.

“While the global financial crisis provides both opportunities and challenges for the Philippine BPO industry, industry players are indicating that overall, the outlook remains positive, and at least in some sectors, will become more so,” said Business Processing Association of the Philippines (BPA/P) CEO Oscar Sañez.

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PUBLISHED BY ‘MANILA BULLETIN ON LINE’ (Philippines)

Posted in ASIA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDUSTRIES, INTERNATIONAL, OUTSOURCED WORK FORCES, OUTSOURCING INDUSTRIES, PHILIPPINES, THE WORKERS | Leave a Comment »

JAPANESE GOV’T READIES MONEY FOR NEW IMF BAILOUT FACILITY

Posted by Gilmour Poincaree on November 2, 2008

Sunday, November 2, 2008

TOKYO (AP) – Japan is ready to provide some of its ample cash for any International Monetary Fund bailouts for struggling nations to help stabilize the growing global financial crisis, the finance minister said.

Japan will make that offer along with proposals about accounting standards and other regulatory adjustments needed to fix the growing economic woes at a world summit in Washington Nov. 15, Finance Minister Shoichi Nakagawa told reporters.

Nakagawa did not say the acceptance of its proposals would be needed to get any of the money but he said Japan expects to play a greater international leadership role on the international stage.

He said the IMF has about $ 210-billion funds but that may not be enough.

“Japan is ready if that prove insufficient,” he said, adding that Japan has $ 1 trillion in possible funding from its foreign currency reserves. “We see lending to the IMF basically as risk-free.”

He did not give specifics of what Japan’s proposals may be, stressing that Prime Minister Taro Aso was still hammering out details.

Britain and Germany support the creation of an International Monetary Fund facility to help smaller economies withstand the global financial crisis, Prime Minister Gordon Brown said on Thursday.

“We discussed how we must prevent contagion over the next few days to middle-income countries including in eastern Europe,” Brown told reporters after talks with German Chancellor Angela Merkel.

“It’s vital that the International Monetary Fund plays a central role in supporting these economies. We both agreed to support a new facility for the IMF which would draw on additional resources of countries with substantial reserves.”

IMF chief Dominique Strauss-Kahn told French daily Le Monde he would propose a new regulatory strategy at a meeting next month of the Group of 20 nations.

He said he would suggest a new type of loan to relieve short-term liquidity problems in some economies, and an increase in IMF resources which he said were insufficient to meet requirements over the medium

Nakagawa reiterated his earlier remarks and the views of other Japanese politicians that Japan wishes to exercise political leadership in offering its money and experience in wresting itself out of its bad debt woes of the 1990s.

He said Europe and the U.S. have historical experience with the Great Depression, but Japan has more recent experience and is in a better position to share its expertise.

“We were able to get ourselves out of our problems without help from any other nation,” he said at the Japan Press Center.

Earlier this week British Prime Minister Gordon Brown and German Chancellor Angela Merkel said the International Monetary Fund needs more money to bail out struggling countries.

Brown has called on countries such as China and the oil-rich Persian Gulf states to fund the bulk of an increase in the International Monetary Fund’s bailout pot. The IMF is giving Hungary, Iceland and Ukraine loans and is in discussions with Belarus.

The International Monetary Fund said Wednesday it is creating a new program to get money quickly to developing countries with strong economies that are facing cash crunches in the global financial crisis.

Nakagawa said countries need to respond quickly and work together to get out of the financial problems that started with the U.S. subprime mortgage crisis and is now spreading around the world.

“Japan is taking leadership,” he said.

He said Japan was also doing its part domestically with stimulus spending packages and regulatory changes to prevent a further plunge on the Tokyo stock market.

Merkel said joint action was needed to tackle the crisis.

“I believe the cooperation of the recent weeks has shown we are on the right path,” she said. “We must make risks (in financial markets) manageable.”

Brown said this week that the IMF needed more money to deal with the fallout from the global financial crisis and called on China and the Gulf states to play their part.

Asked about Brown’s call, China’s Foreign Ministry spokeswoman responded vaguely on Thursday but kept the door open to a bigger Chinese role in international rescue efforts.

Brown’s spokesman said he welcomed the positive responses from Germany and China to the proposal “and the indication that they (China) have given that they would be prepared to consider contributing to any such fund”.

Brown has said the issue of giving the IMF more resources will be on the agenda when he visits the Gulf this weekend.

Brown said he and Merkel were “in total agreement” about what needed to be done at a Nov. 15 global summit in Washington to discuss how to reform the global financial system.

“We need to have a transparency that has not existed in every area of the banking system,” he said.

Brown voiced confidence that the leaders would agree in Washington on the need for reforms to global supervision and cross-border cooperation as well as on the need to reopen talks on a new global trade agreement.

Merkel made no mention of a German economic stimulus programme widely trailed in national media, which a senior legislator in her ruling coalition said would be worth 20-25 billion euros ($ 26 billion-$ 32 billion).

Brown defended the decision he made back in 1997 to make the Bank of England independent.

“It’s absolutely the right idea. It’s stability and an anchor for our financial and economic system,” he said.

“The Bank of England has brought down interest rates twice recently. They continue to look at what they can do for the future, but I think we’ve got to understand that the way to deal with this global problem … is by a comprehensive set of measures,” he said, referring to interest rate cuts, tax cuts and British efforts to help homeowners and small businesses.

“I think you’ll see us, in the next few days, in a position to do more to help people face what is a global problem,” he said.

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PUBLISHED BY ‘MANILA BULLETIN ON LINE’ (Philippines)

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, ENGLAND, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, IMF, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, JAPAN, REGULATIONS AND BUSINESS TRANSPARENCY, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, WORLD BANK | Leave a Comment »

CHINA MARKET FOR COCO FIBER UNLIMITED – The Philippines is faced with unlimited market of up to 300 metric tons (MT) of coconut fiber in China yearly, but government has to boost coconut production in order to capture a larger chunk of the market.

Posted by Gilmour Poincaree on November 2, 2008

Sunday, November 2, 2008

by Melody M. Aguiba

Exporting coconut fiber to China opens up big opportunities for Filipino farmers specially from far-flung islands as Alabat in Quezon where Filcoco Ventures Inc. (FVI) is operating.

In partnership with Hainan Econ, a trading firm from China, FVI has put up a processing plant using Hainan’s technology and now exports coconut fiber weekly to China.

Coconut fiber commands a price beginning at $ 170 per MT in China, but processing it into geotextile, which is what China is already doing, will even raise the benefits for Filipino coconut growers.

China extensively needs coconut fiber that it turns into erosion-controlling nets used in combating desertification. China also gets the same raw material from Sri Lanka, India, or Vietnam.

“The Philippines should be the model here since we are the biggest producer of coconut,” said FVI President Noel. T. Florido in an interview.

Filcoco is now producing 6.25 MT of coconut fiber per day at Alabat as it has a capacity to employ 50 people. But the apparently bigger benefit is the company’s buying activity as it buys P20,000 worth of coconut husks daily or P600,000 per month. The husks otherwise simply go to waste without the FVI plant.

“We want to generate employment and help farmers because I’m from this island, a fourth class municipality. People here (48,000 population) are marginalized. But now they can already buy what they need,” he said.

FVI has started operating early this year a roll on, roll off shipping venture that transports goods (marine products, kalamansi, coconut products) from Alabat to the Quezon mainland. Located in the eastern coast off Pacific Ocean, the island can eventually produce processed coconut fiber or geotextile given the company’s plan for expansion.

FVI has a plan to expand to a total capacity of more than 100,000 MT per year by 2013. It has yet to fully utilize its total capacity of 12.5 MT per day by January or a total of 3,750 MT per year at 300 days.

Alabat has 14,400 hectares of land presently planted to coconut out of its 16,000-hectare area.

However, Florido insists government should encourage more coconut rehabilitation, fertilization, and planting, or else supply may run out in five to six years.

“The government should put someone with a mandate to rehabilitate coconut. The programs now are not enough to solve the problem. Government is supporting the construction of more malls (than planting of coconut). Our crushing plants (for coconut oil) are just operating at half their capacity because of the lack of supply,” he said.

Because of typhoon Milenyo and other calamities, even supply at Alabat has obviously declined.

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PUBLISHED BY ‘MANILA BULLETIN ON LINE’ (Philippines)

Posted in AGRICULTURE, ASIA, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PHILIPPINES, VEGETABLE FIBERS, VEGETABLE OILS | Leave a Comment »

BANCO CENTRAL DA ÍNDIA VOLTA A REDUZIR TAXA DE JUROS A CURTO PRAZO – Taxa, usada por bancos comerciais, caiu de 8% para 7,5% – Sistema financeiro recebeu US$ 37 bilhões para evitar crise de liquidez.

Posted by Gilmour Poincaree on November 2, 2008

01/11/08 – 08h00 – Atualizado em 01/11/08 – 09h56

Da France Presse

O banco central indiano, o Banco da Reserva da Índia, reduziu neste sábado (1º) em 0,5%, de 8% para 7,5%, sua taxa de juros a curto prazo – usada pelos bancos comerciais – para incentivar o crescimento da terceira economia da Ásia.

O banco da Reserva da Índia também reduziu a taxa de reservas obrigatórias dos bancos comerciais devido a um contexto “instável”.

Para reativar o crescimento e facilitar o acesso ao crédito, o banco central indiano já havia baixado no final de outubro sua taxa de juros a curto prazo, a usada pelos bancos comerciais, de 9% para 8%.

O sistema financeiro da Índia, a décima potência mundial, recebeu US$ 37 bilhões para evitar uma grave crise de liquidez em seu mercado bancário.

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PUBLISHED BY ‘G1’ (Brasil)

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

EL MUNDO SE CANSA DEL DOMINIO DEL DÓLAR

Posted by Gilmour Poincaree on October 31, 2008

[31.10.2008]- Actualización 9:40 am de Cuba

por Paul Craig Roberts *

Traducido del inglés para Rebelión por Germán Leyens

¿Qué explica la paradoja de la fuerte subida del valor del dólar contra otras monedas (excepto el yen japonés) a pesar de la desproporcionada vulnerabilidad de EE.UU. a la peor crisis financiera desde la Gran Depresión?

La respuesta no yace en la mejora de los fundamentos de la economía de EE.UU. o en mejores perspectivas para que el dólar mantenga su papel de moneda de reserva.

El aumento del valor de cambio del dólar se debe a dos factores:

Un factor es la huída tradicional hacia la moneda de reserva resultante del pánico. La gente hace simplemente lo que ha hecho siempre. Pam Martens predijo correctamente que la demanda de notas del Tesoro de EE.UU. provocada por el pánico fortalecería el dólar de EE.UU.

El otro factor es el desdoble del carry trade [financiarse en una divisa para invertir en otra]. El carry trade se originó en los tipos de interés extremadamente bajos en Japón. Inversionistas y especuladores pidieron prestados yenes japoneses a una tasa de interés de un medio por ciento, convirtieron los yenes en otras monedas, y compraron instrumentos de deuda de otros países que pagan tasas de interés mucho más elevadas. En efecto, estaban obteniendo fondos prácticamente gratuitos de Japón para prestarlos a otros que pagaban intereses más altos.

La crisis financiera ha revertido este proceso. Los tóxicos derivados estadounidenses fueron vendidos en todo el mundo por Wall Street. Han puesto en peligro los balances y la solvencia de instituciones financieras en todo el mundo, incluyendo a gobiernos nacionales como Islandia y Hungría. Bancos y gobiernos que invirtieron en los atribulados instrumentos financieros estadounidenses vieron que sus propios instrumentos de la deuda estaban en peligro.

Los que usaron préstamos en yen para comprar, por ejemplo, instrumentos de deuda de bancos europeos o bonos islandeses, enfrentaron pérdidas potencialmente catastróficas. Inversionistas y especuladores vendieron sus instrumentos financieros de mayor rendimiento en una lucha por conseguir dólares y yenes para pagar sus préstamos japoneses. Este hizo subir los valores del yen y del dólar de EE.UU., la moneda de reserva que puede ser utilizada para pagar deudas, e hizo bajar los valores de otras monedas.

La subida del dólar es temporal, y sus perspectivas son poco prometedoras. El déficit comercial de EE.UU. disminuirá por los menores gastos de los consumidores durante la recesión, pero seguirá siendo el mayor del mundo y EE.UU. no lo puede reducir exportando más.

La manera como se financia el déficit comercial de EE.UU. es que extranjeros compran más activos en dólares, que ya pesan demasiado en sus portafolios.

El déficit presupuestario de EE.UU. es grande y crece, agregando cientos de miles de millones de dólares más a una deuda nacional que ya es muy grande. Ya que los inversionistas huyen de las acciones hacia notas del gobierno de EE.UU., el mercado de bonos del Tesoro de EE.UU. dependerá temporalmente menos de gobiernos extranjeros. No obstante, la carga sobre los extranjeros y sobre los ahorros del mundo de tener que financiar el consumo estadounidense, las guerras del gobierno de EE.UU. y su presupuesto militar, y el rescate financiero de EE.UU. es resentida cada vez más.

Este resentimiento, combinado con el daño hecho a la reputación de EE.UU. por la crisis financiera, ha llevado a numerosos llamados a favor de un nuevo orden financiero en el que EE.UU. juegue un papel de importancia sustancialmente menor. “Superar la crisis financiera” son las palabras clave para el resto de la intención del mundo de derrocar la hegemonía financiera de EE.UU.

Brasil, Rusia, India y China han formado un nuevo grupo (BRIC) para coordinar sus intereses en la cumbre financiera de noviembre en Washington, D.C.

El 28 de octubre, RIA Novosti informó que el primer ministro ruso, Vladimir Putin, sugirió a China que los dos países utilicen sus propias divisas en su comercio bilateral, evitando así el uso del dólar. El primer ministro de China, Wen Jiabao, respondió que el fortalecimiento de las relaciones bilaterales es estratégico.

Europa también ha notificado que se propone ejercer un nuevo papel de liderazgo. Cuatro miembros del Grupo de Siete naciones industriales: Francia, Gran Bretaña, Alemania e Italia, utilizaron la crisis financiera para pedir reformas globales del sistema financiero mundial. Jose Manual Barroso, presidente de la Comisión Europea, dijo que un nuevo sistema financiero mundial es posible sólo “si Europa tiene un rol de liderazgo.”

El presidente ruso, Dmitry Medvedev, dijo que el “egoísmo económico” de la “visión unipolar del mundo” de EE.UU. es una “política sin porvenir.”

Las masivas reservas de divisas extranjeras de China y su fuerte posición en la manufactura han dado a China el papel dirigente en Asia. El primer ministro adjunto de Tailandia, llamó recientemente al yuan chino “la legítima y ungida moneda convertible del mundo.”

Normalmente, los chinos se muestran muy circunspectos en lo que dicen, pero el 24 de octubre, Reuters informó que el People’s Daily, el periódico oficial del gobierno, en un comentario en primera plana, acusó a EE.UU. de saquear “la riqueza global mediante la explotación de la dominación del dólar.” Para corregir esta situación inaceptable, el comentario llamaba a que los países asiáticos y europeos “proscribieran el dólar de sus relaciones comerciales directas, basándose sólo en sus propias monedas.” Y este paso, dijo el comentario, es sólo un primer paso para el derrocamiento de la dominación del dólar.

Los chinos están expresando otros pensamientos que merecerían la atención de un gobierno estadounidense menos iluso y arrogante. Zhou Jiangong, editor de la publicación en línea, Chinastates.com, preguntó recientemente: “¿Por qué debiera China ayudar interminablemente a EE.UU. a hacer deudas en la creencia de que el crédito nacional de EE.UU. puede expandir sin límite?”

La solución de Zhou Jiangong para los excesos estadounidenses es que China se haga cargo de Wall Street.

China tiene el dinero para hacerlo, y los prudentes chinos harían un mejor trabajo que la multitud de ladrones que han destruido la reputación financiera de EE.UU. mientras explotaban al mundo a la busca de bonificaciones multimillonarias en dólares.

* Paul Craig Roberts fue secretario adjunto del Tesoro en el gobierno de Ronald Reagan. Asimismo, fue redactor jefe asociado del Wall Street Journal, en su sección de editoriales, durante 16 años columnista de Business Week, y columnista de Scripps Howard News Service and Creator’s Syndicate en Los Angeles. Ha ocupado numerosas cátedras universitarias, incluyendo la Cátedra William E. Simon Chair en Economía Política, Centro de Estudios Estratégicos e Internacionales, Universidad de Georgetown e Investigador Invitado Sénior, Hoover Institution, Universidad Stanford. Fue condecorado con la Legión de Honor por el Presidente de Francia y con la Medalla de Plata del Tesoro de EE.UU. por “sobresalientes contribuciones a la formulación de la política económica de EE.UU.” Es co-autor de “The Tyranny of Good Intentions.” Para contactos, escriba a: PaulCraigRoberts@yahoo.com

´
COUNTERPUNCH

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PUBLISHED BY ‘EL ECONOMISTA’ (Cuba)

Posted in ASIA, BANKING SYSTEMS, BRASIL, CENTRAL BANKS, CHINA, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INTERNATIONAL, RUSSIA, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

JOINT SCO EFFORTS URGED TO BEAT FINANCIAL WOES – Ensuring the security of China’s economy would be the country’s most important contribution toward global financial stability, Premier Wen Jiabao said

Posted by Gilmour Poincaree on October 31, 2008

UPDATED: October-31-2008

Ensuring the security of China’s economy would be the country’s most important contribution toward Prime ministers representing the Shanghai Cooperation Organization (SCO) member countries poses for a group photo in Astana, October 30, 2008 - Xinhuaglobal financial stability, Premier Wen Jiabao told prime ministers from the Shanghai Cooperation Organization (SCO) Thursday.

“It is necessary to have greater interaction between our financial and business communities,” Wen said. “SCO members must work … to enhance the coordination of monetary policies and improve financial controls to prevent and neutralize financial risks.”

Wen said China would consider issuing loans to members of the organization to ensure food security and support joint projects in the region.

“Because of the increasing relevance of food security, China stands ready to assist SCO member organizations in the establishment of technical facilities for agriculture,” he said.

Food prices have soared across the region over the past year as a result of increasing energy costs and disappointing harvests.

The SCO, an inter-governmental organization founded in Shanghai in 2001, groups China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Pakistan, India, Iran and Mongolia are observer nations.

Wen arrived here Wednesday evening on a three-day official visit to Kazakhstan, the second leg of his two-nation tour after Russia.

(China Daily via Agencies/Xinhua October 31, 2008)

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PUBLISHED BY ‘BEIJING REVIEW’ (China)

Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, MACROECONOMY, PAKISTAN, THE FLOW OF INVESTMENTS | 1 Comment »

EARNINGS FROM POTASH EXPORTS SURGE TO JD301.4M (Jordan)

Posted by Gilmour Poincaree on October 31, 2008

31 October 2008

AMMAN (Petra) – Earnings from potash exports rose to JD301.4 million during the first eight months of this year, according to the website of the Central Bank of Jordan. Exports during the January–August period of last year amounted to JD148.2 million. Potash ranked second among the country’s exports, after garments. The increase in earnings were attributed to higher potash prices and a slight rise in exported quantities. India, Malaysia and China were the principal importers of Jordan’s potash as they accounted for two-thirds of the exports.

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PUBLISHED BY ‘JORDAN TIMES’

Posted in ASIA, CHEMICALS (crude components), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JORDAN, MALAYSIA, MIDDLE EAST | Leave a Comment »

RATE CUT FROM JAPAN, BARCLAYS SEEKS FUNDING

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Japan cut interest rates for the first time in seven years on Friday, expecting severe stress in the global economy to persist, while UK banking giant Barclays said it was raising $12 billion in capital.

Interbank lending rates fell sharply, suggesting that the moves taken by central banks and others to remove blockages in the credit system were working to some extent.

The Bank of Japan’s move followed a rate cut from the U.S. Federal Reserve earlier in the week and likely presaged the same from the European Central Bank and Bank of England next week.

Inflation in the euro zone fell to 3.2 percent year-on-year in October, the European Union’s statistics office said, data likely to ease any concerns at the ECB about rising prices.

Policymakers have been struggling to find the right response to a rapid global slowdown that has hammered corporate profits and sparked a record freefall in stock markets in October.

Fallout from the crunch continued to spread on Friday with Barclays Plc saying it planned to raise 7.3 billion pounds ($12.06 billion) in additional capital from outside investors including Gulf states Qatar and Abu Dhabi.

Earlier this month, Barclays said it wanted to raise capital but would raise it privately rather than take UK government cash, as rivals Royal Bank of Scotland, Lloyds and HBOS are.

“There has been a significant shift in the availability of capital and economic power in the world over the last five years and we’re ensuring we’re aligned with those changes,” said John Varley, Barclays’ chief executive.

Mizuho Financial Group became the second major Japanese bank this week to cut its full-year net profit forecast by more than half because of bad loans and losses in its equity portfolio.

The global downturn has come hard on the heels of the credit crunch, the worst financial crisis since the Great Depression, with investors facing what Japanese Prime Minister Tara Aso called “a harsh storm seen only once in 100 years”.

There were mixed signs about the credit crunch. Interbank rates — the cost banks charge to lend to each other — fell.

But at the ECB, overnight deposits from banks soared to a new record, suggesting banks still preferred to deposit money with the central bank than lend to each other.

Equity markets fell again, with Japan’s Nikkei closing down 5 percent on disappointment at the size of the interest rate cut.

European shares were off 0.9 percent and Wall Street looked set for a similarly weak start.

RATE CUTS

The Bank of Japan cut its benchmark overnight call rate to 0.30 percent from 0.50 percent, a slightly smaller reduction that the quarter point many had expected.

A 4-4 vote on the policy board meant the central bank governor had to cast the deciding vote.

“At a time of extreme financial uncertainty and volatility, to have a policy board so evenly split is hardly reassuring,” said Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong. “Whatever the desired outcome, the fact that the board was so evenly split jeopardises that outcome.”

The rate reduction was the latest in a series globally as central banks move rapidly to try to cushion growth now that interbank lending rates have started falling.

The average benchmark interest rate in the Group of Seven countries has dropped to 2.36 percent, the lowest since April 2005, from 4 percent in August 2007 when credit markets began imploding because of mounting subprime mortgage defaults.

Economists widely expected Australia, Britain and the euro zone to cut rates next week.

CONTRACTION

The economies of Britain, Europe, Japan and the United States are contracting. The latest growth data showed the U.S. economy shrank in the third quarter, three months that included the dismantling of the Wall Street investment bank model.

After Thursday’s data showed the U.S. economy shrank at a 0.3 percent annual rate in the third quarter, investors will look to consumption and inflation data later for more evidence of decline.

Companies are also being to feel the pain.

A deal to merge General Motors Corp and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, according to Reuters sources.

The car giants are seeking to merge as they struggle with the economic slump.

In Japan, Nissan Motor and Suzuki Motor issued profit warnings.

Along with central banks, governments around the world were waging an all-out battle to contain the fallout from the financial crisis, including by cutting taxes, taking equity stakes in banks and backing bank deposits.

The South Korean government is considering $7.3 billion in additional spending to support domestic demand, according to a local business paper, as the worst fears appeared to have dissipated about a meltdown in Asia’s fourth-largest economy.

On Thursday, Japan also unveiled a $50 billion economic stimulus package and German cabinet minister Michael Glos said Europe’s largest economy planned to introduce a range of steps worth up to $39 billion.

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Posted in ASIA, BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ENGLAND, EUROPE, EUROPEAN CENTRAL BANK, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, JAPAN, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

IRAN CUTS OIL PRODUCTION AS PRICES CONTINUE PLUMMETING

Posted by Gilmour Poincaree on October 31, 2008

date: 31 10, 2008

TEHRAN, OCT. 31 (BNA) — IRANS OIL MINISTER GHULAM HOSSEIN SAID, IN LINE WITH A RECENT DECISION TAKEN BY THE ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC) TO REDUCE OIL SUPPLY, IRAN WILL START CUTTING 199000 BARRELS A DAY OF ITS OIL PRODUCTION AS OF TOMORROW, NOVEMBER 1, 2008.

IN ADDITION, TEHRAN, IN ITS CAPACITY AS MEMBER OF THE OPEC OIL PRICES CONTROL COMMITTEE, WILL MONITOR OPECS MEMBER-STATES COMMITMENT TO THEIR STAKES, THE MINISTER ADDED. REGARDING A PROPOSAL BY OPEC SECRETARY GENERAL TO HOLD AN EMERGENCY MEETING BEFORE DECEMBER GATHERING, THE MINISTER SAID SUCH PROPOSAL WOULD BE PUT IN EFFECT IN CASE PRICES CONTINUE SLIDING.

MTQ 31-OCT-2008 16:10

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

IMF OFFICIALS CONCLUDE FIRST ROUND OF TALKS TO BAIL OUT PAKISTAN

Posted by Gilmour Poincaree on October 31, 2008

Islamabad, October 30, SPA

The International Monetary Fund (IMF) on Thursday concluded the first round of technical talks in Dubai with Pakistani officials about creating a system to save the south Asian nation from economic collapse, officials said according to dpa. Pakistan’s government is facing a tightening balance of payments. Its financing gap stands at around 7 billion dollars for the current fiscal year, which ends June 30, 2009.

“There are one or two points on which both sides could not evolve consensus,” said a senior official, who was part of the returning Pakistani delegation on Thursday. The official, who refused to be named, said to dpa that the IMF was insisting on raising discount rates by 3 to 4 per cent above the existing 13 per cent, in order to curtail inflation, which currently stands at over 30 per cent.

SPA

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US WILLING TO HOLD TALKS WITH TALIBAN, SAYS REPORT

Posted by Gilmour Poincaree on October 29, 2008

October 29, 2008

by Anwar Iqbal and Masood Haider

WASHINGTON/NEW YORK, Oct 28: The US is willing to hold direct talks with elements of the Taliban in an effort to quell unrest in Afghanistan, the Wall Street Journal reported on Tuesday, citing unidentified Bush administration officials.

The Washington Post reported that Taliban leader Mullah Omar had shown openness to the idea of repudiating Al Qaeda, which encouraged the Bush administration to explore the possibility of holding direct talks with the militia.

Jane’s Defence Weekly reported that the Taliban had conveyed this message to representatives of the Afghan government during a meeting in Saudi Arabia last month.

Amid these reports of a possible breakthrough in the search for a peaceful solution to the Afghan conflict, Christian Science Monitor noted that on Monday the Taliban militia showed “a new potency” in the fight against coalition forces, bringing down a US military helicopter near Kabul, while a suicide bomber struck and killed two Americans in northern Afghanistan.

The Los Angeles Times on Tuesday highlighted the significance of the attack, noting that “choppers are a crucial mode of transport for troops and supplies” in Afghanistan.

Speculations about a possible breakthrough in the talks with the Taliban follow a series of meetings last month in Saudi Arabia between representatives of the Afghan government and the militia.

But even before the Saudis initiated the talks, the Karzai government had been putting out feelers to the Taliban for negotiating an end to its insurgency in exchange for some sort of power-sharing deal.

Though the US has so far been on the sidelines but at a recent news conference Gen David McKiernan, the commander of US troops in Afghanistan, grudgingly said he would support the Afghan government if it chose to go down the path of negotiations.

And now the Wall Street Journal is reporting that the US might get involved in those negotiations directly. “Senior White House and military officials believe that engaging some levels of the Taliban — while excluding top leaders — could help reverse a pronounced downward spiral in Afghanistan and neighbouring Pakistan,” the report said.

Both countries have been destabilised by a recent wave of violence.

Senior Bush administration officials told the Journal that the outreach was a draft recommendation in a classified White House assessment of US strategy in Afghanistan. The officials said that the recommendation called for the talks to be led by the Afghan central government, but with the active participation of the US.

The US would be willing to pay moderate Taliban members to lay down their weapons and join the political process, the Journal cited an unidentified US official as saying. The Central Intelligence Agency has been mapping Afghanistan’s tribal areas in an attempt to understand the allegiances of clans and tribes, the report said.

WSJ noted that joining the talks would only be a first step as the Bush administration was still in the process of determining what substantial offer it could make to persuade the Taliban to abandon violence. “How much should (we) be willing to offer guys like this?” asked a senior Bush official while talking to the Journal.

Gen David Petraeus, who will assume responsibility this week for US military operations in Afghanistan and Pakistan as head of the Central Command, supports the proposed direct talks between the Taliban and the US, the WSJ said.

Gen Petraeus used a similar approach in Iraq where a US push to enlist Sunni tribes in the fight against Al Qaeda helped sharply reduce the country’s violence. Gen Petraeus earlier this month publicly endorsed talks with less extreme Taliban elements.

Gen Petraeus also indicated that he believed insurgencies rarely ended with complete victory by one or the other side.

“You have to talk to enemies,” said Gen Petraeus while pointing to Kabul’s efforts to negotiate a deal with the Taliban that would potentially bring some Taliban members back to power, saying that if they were “willing to reconcile” it would be “a positive step”.

US Afghan experts outside the Bush administration have also been urging the White House to try to end violence “by co-optation, integration and appeasement”, as one of them said.

They urge the Bush administration to give the Taliban a positive reason to stop fighting. This, they argue, would allow Washington to separate hardcore militants from others within the Taliban and would also expose the extremists before the Afghan people.

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

TOUGH IMF CONDITIONS DIFFICULT TO ACCEPT: ASIF (Pakistan)

Posted by Gilmour Poincaree on October 29, 2008

October 29, 2008

by our Staff Reporter

ISLAMABAD, Oct 28: President Asif Ali Zardari said on Tuesday the government could ‘ill-afford’ President Asif Ali Zardari - PakistanInternational Monetary Fund’s financial assistance with tough conditions.

“Time is running out and there is an urgent need for the ‘Friends of Pakistan’ to extend a helping hand,” he told Adviser to the British Prime Minister Simon McDonald who had called on him at the President’s House.

Mr Zardari, however, made it clear that Pakistan was not looking for aid, but needed friends’ help to enhance trade and economic and investment opportunities.

According to a Foreign Office news release, the discussion focussed on Friends of Democratic Pakistan Initiative, measures and options being considered by the government to address the economic difficulties, Doha Process, situation in the border region, Afghanistan and bilateral cooperation. The president highlighted the government strategy to handle economic issues, socio-economic initiatives to settle tribal areas, including the Benazir Card for every household, and negotiations with the IMF.

He stressed that the war on terror, which had its roots in other regional events, had now become Pakistan’s war and the country and its people were paying a heavy price that needed to be acknowledged by the international community.

Mr Zardari quantified how one incident of terrorism impacted the already turbulent economy. He stressed the need to identify the forces that were funding militants in this expensive war. He was not convinced that drug money could be the only source of funding.

The president informed the British official about the state of relations with Afghanistan and termed recent exchanges and developments such as mini-jirga a manifestation of growing understanding and forward movement in relations.

Mr McDonald conveyed greetings from Prime Minister Gordon Brown and said that he fondly recalled the president’s visit to the UK in September when they had a fruitful and candid exchange.

The British adviser was highly appreciative of the unanimous resolution adopted by parliament on government’s policy for tackling terrorism.

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Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, IMF, INTERNATIONAL, PAKISTAN | Leave a Comment »

TSUNAMI AND ITS WIDE-RANGING RIPPLE EFFECT

Posted by Gilmour Poincaree on October 29, 2008

29 Oct, 2008, 0126 hrs

IST,Sangita Mehta, ET Bureau

The stock market has fallen around 60% from its peak level in January. Given that foreign institutional investors who hold 35% ($71 bn) of Indian stocks are still in a flight-to-safety mode, there is scope for the market to fall some more.

Although the market crash is not unique to India, there are key differences between India and other markets which have declined. In the US and most of the West, there is a problem in the real sector. The economies are slowing, the financial sector is in a mess because of bad loans and the financial sector crisis has passed on to the stock markets.

In India, it is the other way round. The economy is the second-fastest growing among all reasonably-sized markets and bank balance sheets are sound, but stock markets have collapsed because of the flight of foreign funds to perceived safer havens. But even this flight of capital has not thrown the economy out of kilter.

Reserve Bank of India has over $280 bn of foreign exchange reserves in liquid assets. Bankers say that more money will go out and point to the $89 bn of short-term debt to be repaid. But nearly half the debt is non-resident deposits, which in all likelihood will stay. The only problem is the $40 bn short-term debt that may be too expensive too renew. But the economy seems to be in a position to absorb the impact of these outflows.

There are mixed opinions on the extent to which the US slowdown would hurt service exports — the growth driver and the largest forex earner for the country. But given the weakening of the rupee, it is almost widely expected that the West would continue to depend on India for IT and ITES. However, it would be foolhardy to assume that a 60% crash in the markets would not have an impact on the real sector. The crash has been so swift that its impact is yet to be transmitted to the real sector.

From financial to real

According to bankers, the first casualty will be projects in the pipeline. “Some promoters have pledged shares with lenders when prices were high to raise money to fund their projects. Now that prices have fallen, either the promoter has to top it up with more securities or the lenders will be forced to sell shares.

Also, banks may put further lending on hold, affecting the project. If lenders do sell shares pledged to them, promoters’ holding in the company will come down, making them vulnerable for takeovers,” says Jitendra Balakrishnan, deputy managing director, IDBI Bank.

According to Mr Balakrishnan, those corporates who were looking at private equity route will find it difficult raising them. This, in turn, would affect their projects. Rights issues which have been launched in the midst of the crisis have bombed. Others planning rights issues may be forced to shelve them. “Those who were looking at acquisition of companies through share swaps will have to rethink,” he adds.

In the last two months, two sources of funds — foreign borrowing and capital markets — have completely dried up. This has forced companies to rush to banks. But going forward, getting money from banks will also prove to be tough. “Companies which are dependent on the equity market to adhere to the debt-equity ratio will be affected. A bank can lend only when the company brings equity to the table.

If a part of the equity funding is coming from the capital market, promoters may rethink lending, considering low valuations, affecting the project,” says MV Nair, chairman, Union Bank of India. He adds that existing businesses would be hurt to the extent that there will be a decline in consumption, as the wealth effect caused by rising markets had boosted consumption so far.

According to AC Mahajan, chairman, Canara Bank, not a single sector is unaffected. “Even sectors that are not linked to markets have started getting affected. For instance, a person may resist buying a house or consumer durables on hopes that prices will fall further; this, in turn, slows down the pace of growth. Similarly, the service sector would also be affected, as demand may come down due to the slowdown.”

The central bank, which has its ear to the ground as far as the performance of corporate India is concerned, is quite optimistic on this front. In a recent interview to Financial Times, RBI governor D Subbarao had said: “This is not like the 1990s for India. It has changed. In the 1990s, our growth resilience arose from debt-financed growth. Today, it is private sector-driven productively-financed growth and there is resilience. And even in the rural sector, I’m told there is a vibrant economy growing there. There’s improvement in the social sector, education and health. So there is a spin-off effect of all this.”

RBI continues to bet on 7.5-8% growth, expecting services, which contribute 65% to GDP to grow by at least 10%. “We are better off this time. In the past, even in the best of time, the economy saw a growth of 4-5% and now, in the worst of times, we are talking of 7-8% growth,” says Mr Mahajan. Some like Balakrishnan feel that at present levels, share prices are reflecting the true value of the real economy.

A fall in asset prices, particularly real estate assets, will make houses more affordable. Fortunately for India, its leading banks have raised over $10 bn in equity capital when markets where at their peak level last year. This places them in a stronger position in the event of a slowdown.

The impact of the slowdown on asset quality of the banking sector will be felt only in a couple of quarters from now. Lenders and policymakers can apply learnings from the slowdown in the 1990s and in other countries to alleviate the pain of the slowdown.

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

BOEING SAYS CHINA NEEDS 3,710 PLANES OVER 20 YRS

Posted by Gilmour Poincaree on October 29, 2008

29 Oct, 2008, 1206 hrs IST, REUTERS

BEIJING: Boeing Co said on Wednesday that China will need 3,710 new commercial airplanes worth BOEING 747$390 billion over the next 20 years, maintaining its position as the world’s fastest growing aviation market.

China will account for 41 percent of the Asia-Pacific region’s airplane demand, Randy Tinseth, a Boeing vice president for marketing, said in a statement.

The mainland’s air travel and air cargo market growth will more than triple the country’s fleet to 4,560 airplanes by 2027, about the number of airplanes flying in Europe today, according to the statement.

The company said global demand for new commercial airplanes over the next two decades will total $3.2 trillion, or about 29,400 aircraft.

Single-aisle and intermediate twin-aisle planes will make up 91 per cent of China’s total demand in terms of value, while only a limited number of large airplanes (747-size and larger) will be needed.

China is the focus for Boeing and rival EADS’ Airbus unit, which has equally rosy forecasts for the mainland market as its booming economy demands more long-haul planes.

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Posted in AIR TRANSPORT INDUSTRY, ASIA, CHINA, COMMERCE, ECONOMY, INDUSTRIES, INTERNATIONAL | Leave a Comment »

THE ‘INDIAN POLITICAL BUSINESS COMPLEX’

Posted by Gilmour Poincaree on October 29, 2008

October 16, 2008

by Arjun Swarup @ – 10:32 pm

An article of mine got published on TCS Daily on the evolving political and business landscape in India. The article can be found here. The article is reproduced below as well –

The decade and a half following India’s economic reforms of 1990-91 has been an exciting and transformational one for India and its people, and has also had a significant impact on the entire world. Much good has happened, with increasing growth and prosperity benefiting millions. The world has observed the rise of a large and vibrant middle-class, an aggressive and innovative private sector, and the growth of a soft culture. It is true that severe challenges still remain, caused mainly by massive disparities in income and access to resources, which mean that over 300 million people remain desperately poor, and large parts of the country not benefiting from growth.

A lot of India’s growth and stability today has been credited to its overall political structure and institutions. This is what has kept the nation united through the numerous challenges it has faced, and continues to face. The federal nature of the government, coupled with the presence of an independent judiciary and a powerful media have all combined to create the unique phenomenon that is Indian democracy. There are notable flaws, such as weak law enforcement, and an excessive bureaucracy, but, for better or for worse, Indian democracy has worked.

However, over the past few years, a major development has occurred in India, almost silently, which illustrates the uglier side of this system. While the growth rates clocked by the economy over the years have been impressive, most of the major policy changes benefited big established business houses. This has resulted in the India of today being a highly oligarchic economy, with a relatively small population enjoying disproportionate power, wealth and influence (four of the world’s ten wealthiest individuals are from India). Actual market friendly policies, which would help the middle-class and poor by boosting entrepreneurship would often be to the detriment of this group, and are often inhibited. In the 1950’s, Eisenhower warned the Americans of a “military-industrial” complex which could skew American priorities. His fears might have been unfounded, or at the very least, quite exaggerated. However, India today does the face the danger of a political ? big business complex distorting its priorities.

This phenomenon was partly displayed during the debate over the Indo-US nuclear deal. A seemingly innocuous bilateral treaty, it created frenzied debate, polarized the polity and the nation, and forced the government through a no-confidence motion. To a complete outsider, it all seemed a lot of action for something which appeared quite routine. To Indians though, it all seemed wearingly familiar.

The nuclear deal holds many ramifications for India, and the general consensus amongst the scientific, business and intellectual community is that it would be beneficial, if negotiated properly. Power generation is one area where the deal is said to have probable benefits. India remains critically deficient in power generation, with large parts of the country, including metros, suffering from severe power shortages. This has had a major impact on the growth of small business units, especially in manufacturing.

Since nuclear energy can be used to generate power, it appears that the deal could help meet the shortage, and thus, presents a huge opportunity for big business houses. Each major political alliance in India has its support base comprised of various business houses, and each alliance feels the pressure to make sure the deal goes through when it is in power, to ensure the maximum benefit for its support base. Simultaneously, policy changes such as decentralizing power production, removing subsidies or limiting power theft are often prevented, as those would enable the entry of other players into the sectors. It is like a double whammy effect.

Two other areas where the impact of the political-business nexus can be seen are agriculture and retail. Organized retail presents a massive opportunity for India to broad base its growth, and help kick start the agriculture sector, with estimates ranging from $ 500 billion to over $ 1 trillion. A large amount of agricultural produce in India is wasted each year due to the lack of cold storage, to the tune of $ 7 billion. Investments, both foreign and domestic, should be welcomed in this sector, as well as initiatives to promote local small businesses. Yet, the whole sector has been dominated by big players, who would rather establish consolidated supply chain which would squeeze prices all along the retail chain.

On a broader governance level, the negative impact of the political business nexus can be observed. Running for public office in India is an incredibly expensive proposition and campaign financing remains murky, with virtually no accountability. This works perfectly to the advantage of the business lobbies, in exercising control over political parties. The labor market also remains highly informal and unorganized, as this keeps labor prices cheap. Another good example is the real estate sector, where acquisition of land for commercial or private purposes remains incredibly difficult, for businesses which want to establish themselves. It needs to be pointed out that these phenomena were not the creation of the big players today, but it works to their benefit today to ensure that the status quo remains.

It is entirely likely that the influence of this group would diminish with the passage of time, and that fears about it would prove unfounded (as some of Eisenhower’s were, in the case of the US). Yet, in the Indian context, there needs to be a greater awareness of the dangers posed by such developments, and how they could impact the overall growth story.

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SPEAKING FREELY – FORGET BUSH’S WARS AND WORK WITH ASIA

Posted by Gilmour Poincaree on October 29, 2008

Oct 24, 2008

by Zhiqun Zhu

John Hay, the 37th United States secretary of state, said in 1889, “The Mediterranean is the ocean of the past, the Atlantic, the ocean of the present, and the Pacific, the ocean of the future.”

The future is now. The “Asia-Pacific century” is not a prediction any more; it’s reality. Based on purchasing power parity, three of the four largest economies in the world are in Asia – China, Japan and India. And if the United States is included, then all the top four economies are in the Asia-Pacific region.

The United States has longstanding interests in Asia. Two of the world’s potentially most explosive places are located in East Asia: the Korean Peninsula and the Taiwan Strait, where the United States has significant economic, geopolitical and strategic interests. Since the end of World War II, the US has had extensive economic interactions with Asian nations. It played an instrumental role in Japan’s post-war recovery and the economic takeoff of the four Asian “tigers” – South Korea, Hong Kong, Singapore, and Taiwan. Since the early 1980s, China has also benefited enormously from America’s huge investment and its insatiable consumer market. It is not an exaggeration that East Asia is of critical importance to America’s future.

One wonders whether the fact that Asia has not been a major foreign policy issue in the 2008 US presidential election is good news or bad news. The new US president must move beyond President George W Bush’s preoccupation with the “war on terror” and pay more attention to Asia.

Mixed legacy

On the positive side, US alliances with Japan, South Korea and Australia remain strong. In the past eight years, Japan, South Korea and Australia all had leadership changes, and in Japan’s case there have been four different prime ministers. All these Asian leaders have firmly supported America’s “war on terror”. They have all visited Washington to show solidarity with Bush.

One of the rare bright spots in Bush’s foreign policy is China. A stable and strong relationship between the United States and China is probably Bush’s greatest foreign policy achievement. Bush and his family are now considered “friends” by the Chinese government and Bush’s decision to attend the Summer Olympic Games in Beijing, though controversial at home, was welcomed by China where members of the Bush family were warmly received.

Prodded by the United States, the new Kuomintang (KMT) government in Taiwan headed by Ma Ying-jeou has abandoned the pro-independence policies of his predecessor Chen Shui-bian and has endeavored to improve cross-strait relations. As a result, military conflict in the Taiwan Strait is becoming much less likely now.

However, Bush has also failed miserably in East Asia overall, most notably with regard to the unresolved issue of North Korea’s nuclear program. Opportunities to denuclearize North Korea have come and gone during the eight years of the Bush administration.

An agreed framework was reached between the US and North Korea in 1994. Denuclearization of the Korean Peninsula seemed to be within reach. President Bill Clinton sent his secretary of state Madeline Albright to North Korea in October 2000 to talk to North Korean leader Kim Jong-il directly. Clinton was even prepared to visit North Korea himself to improve relations.

After Bush came to office in January 2001, he refused to honor the 1994 agreement and rejected direct talks with North Korea directly. After the September 11, 2001, bombings he labeled North Korea as part of the “axis of evil”. North Korea was outraged and felt cornered; it hardened its position on the nuclear issue and decided to proceed with nuclear technology. Even many South Koreans felt offended: North Korea is poor, but it is not evil.

Eventually China launched the six-party talks in 2003. The US accepted this multilateral forum for discussion but still refused to deal with North Korea directly. After tough negotiations, North Korea finally agreed, in February 2007, to shut down its main nuclear reactor in exchange for food and aid from the other five parties.

In June 2008, North Korea blew up the cooling tower of its Yongbyon nuclear reactor and handed over to the US a declaration of its nuclear activities. However, by August, the US had not removed North Korea from the state sponsors of terrorism list, as it had promised earlier, while insisting that it wanted independent verification of North Korea’s nuclear disarmament. Accusing the US of breaking its promise, North Korea then announced it had suspended disabling its nuclear facilities.

In a dramatic development, on October 11, Bush decided to remove North Korea from the list of states that sponsor terrorism. This was an encouraging step, but it may have come too late.

As a result of Bush’s policies, the new US president will face several serious challenges in East Asia.

The immediate security challenge is a nuclear-capable North Korea. Recent reports about Kim Jong-il’s poor health added complexity and uncertainty to the nuclear issue and security in East Asia.

For Washington, the shortest diplomatic route to Pyongyang is through Beijing. China has a strong interest in preventing the nuclearization of the Korean Peninsula, in part because it does not want to give Japan an excuse to go nuclear.

North Korea has not accounted for dozens of Japanese citizens abducted by North Korean agents in the 1970s and 1980s, and the new US president needs to explain to Tokyo that as important as the matter is, it should not be linked to North Korea’s denuclearization. Japan can seek to resolve the abduction issue through other channels, preferably by engaging with North Korea directly. The United States must coordinate its policy closely with China and other nations in the region in order to break North Korea’s nuclear stalemate.

Asia also poses tough economic challenges to the new president. The US must become actively involved in economic integration with Asian nations, otherwise it risks being marginalized in Asia. It cannot afford to continue to stand on the sidelines as the 10-member Association of Southeast Asian Nations and northeast Asian nations discus a regional free-trade zone.

The United States had been the dominant economic power in Asia, but now China has become the largest trading partner of almost every country in Asia. Economically, the US is already playing second fiddle. Asian economies are some of the biggest holders of US Treasury bonds with Japan and China together holding about half of all Treasury bonds sold abroad.

China has become America’s third-largest export market after Canada and Mexico, and its foreign exchange reserve is quickly approaching US$2 trillion. The recent financial crisis in the US makes it imperative for the new president to work more closely with East Asian nations. Shortly after the US Congress passed the $700 billion financial rescue package in September, the People’s Bank of China (central bank) reportedly expressed interest in purchasing $200 billion worth of US Treasury bonds. Undoubtedly, East Asia will be part of the solution to the current financial problems in America.

The biggest challenge for the US and its new president is China. The challenge from the re-emerging power of the Middle Kingdom is on all fronts. China’s economy continues to gallop forward, despite the impact of the financial crisis in the West. For many developing countries, China’s development model, the so-called “Beijing Consensus” of economic liberalization under tight political control, offers an attractive alternative to the “Washington Consensus” of the US.

After Beijing passed the Olympic test with flying colors, and after Chinese astronauts successfully conducted their first space walk, the Chinese people have every reason to celebrate. As a result, nationalism has grown even stronger in China. Dealing with this increasingly powerful and proud nation of over 1.3 billion people is no easy task – and China-US relations have become increasingly complex.

From issues ranging from trade imbalances to independence protests in Tibet, the two countries have many differences. The recent US sale of $6.5 billion worth of weapons to Taiwan certainly does not bode well for bilateral ties. The rise of China – a nation that does not share core values with the United States – will be the most pressing foreign policy challenge for the next American president.

Bush has preferred unilateralism in foreign policy, and in Asia he has preferred strong bilateral alliances built upon historical ties with key allies. But this bilateral alliance structure is rooted in Cold War ideology and is outdated today. The new American president must go beyond unilateralism and bilateralism and move towards multilateralism on a wide range of issues.

In Asia, the new American president must be a uniter, not a divider. In addition to resolving North Korea’s nuclear dilemma, fighting infectious diseases, piracy on the high seas, global warming, and financial crises all require multilateral cooperation between the United States and the nations of Asia and the world.

Zhiqun Zhu, PhD, is MacArthur Chair in East Asian Politics and associate professor of political science and international relations at Bucknell University in Pennsylvania. He can be reached at zhiqun.zhu@bucknell.edu

(Copyright 2008 Zhiqun Zhu.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.

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ESPECTACULAR CRECIMIENTO DEL SECTOR DE LOS ACEITES VEGETALES PARA LA PRÓXIMA DÉCADA, SEGÚN ESTIMACIONES COMUNITARIAS

Posted by Gilmour Poincaree on October 28, 2008

28/10/2008

El sector de los aceites vegetales es el que puede tener un mayor crecimiento en la próxima década dentro de todos los sectores agrarios, de acuerdo con las estimaciones OECD-FAO y FAPRI, recogidas en la última actualización del informe las previsiones de los mercados agrarios hasta el 2017 publicadas por la Comisión Europea. Las estimaciones de consumo son optimistas, con un crecimiento esperado del 56-62% en 2008-2017 en relación con la década precedente. Este aumento se debe a una mayor demanda de alimentos, especialmente creciente en los países en desarrollo. La demanda de biodiésel supone un tercio de este crecimiento.

Las previsiones de precio apuntan a un crecimiento entre 87-132% en el período de estudio. Según FAPRI, habría un importante aumento del valor de los aceites comparado con el de las tortas, alcanzando un factor de 4,5 en 2017. OECD-FAO prevé un crecimiento más moderado, en línea con el ratio de la década anterior.

Argentina se consolida como exportador líder de aceite de soja, con un 30% de las exportaciones netas, a expensas de Brasil y de EEUU, según FAPRI. El aceite de palma seguirá siendo el aceite más consumido a nivel mundial. Malasia e Indonesia podrían aumentar sus exportaciones en un tercio, hasta los 5 millones de toneladas cada uno, de 2008 a 2017.

La UE rebasará a China como primer consumidor e importador de aceites. Para 2017 es previsible que la UE casi doble sus importaciones de 9 a 15 millones de toneladas (estimaciones OECD-FAO).

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Posted in AGRICULTURE, ARGENTINA, ASIA, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMY, EUROPE, INTERNATIONAL, SOUTH AMERICA, SPAIN, VEGETABLE OILS | Leave a Comment »

MEGABANKS TO RAISE CAPITAL AMID STOCK PLUNGE (Japan)

Posted by Gilmour Poincaree on October 28, 2008

The Asahi Shimbun – 2008/10/28

Once seen as the saviors of struggling foreign financial institutions, Japanese megabanks now plan to prop up their own financial bases to avoid disaster from the recent plunges of stock prices.

Mitsubishi UFJ Financial Group Inc. (MUFG) on Monday announced plans to increase its capital by 990 billion yen through measures including the issuing of new shares. Sumitomo Mitsui Financial Group Inc. (SMFG) is mulling a maximum 500-billion-yen increase.

Mizuho Financial Group Inc. is likely to follow suit.

Until recently, Japanese megabanks were believed to have staved off serious damage from the U.S. subprime loan crisis and were in a position to provide capital for their less-fortunate counterparts in the United States and Europe.

Earlier this year, Mizuho Corporate Bank invested $1.2 billion (about 113 billion yen) in Merrill Lynch of the United States, while Sumitomo Mitsui Banking Corp. injected 500 million pounds (about 75 billion yen) to Barclays plc of Britain.

However, the fallout from the financial crisis has hit home, as the Nikkei 225 index continues to fall to its lowest level in years, greatly reducing the value of the stocks these banks own.

MUFG had already seen its capital-to-asset ratio drop from 11.19 percent at the end of March to 10.73 percent at the end of June.

The group also expects to suffer from increased costs to write off bad loans for the current fiscal year ending in March 2009, while its latent losses are expanding because of the declining value of the stocks it holds.

MUFG’s $9 billion investment in Morgan Stanley this month also made it necessary for the group to strengthen its financial base.

The group plans to issue new common shares worth up to 600 billion yen and allocate noncovertible preferred shares worth 390 billion yen to designated domestic institutional investors.

If 990 billion yen is raised, the group’s capital-adequacy ratio will rise by 0.9 percentage point.

Likewise, SMFG faces the risk of its capital-to-asset ratio falling sharply. At the end of June, the ratio was 10.35 percent.

The financial group is also expected to suffer from higher costs to write off bad loans for smaller companies, to which the group had loaned heavily, and a decreased value of its shareholdings.

As SMFG’s own share price has fallen below half of this year’s peak, the group will likely combine the issue of preferred shares to life insurance companies with other measures.

The Mizuho Financial Group had originally planned to buy back about 400 billion yen worth of its own shares by March 2009. Now, it is considering postponing the buyback of about 250 billion yen of those shares.

Buying back its own shares would benefit shareholders because it helps raise the stock price. But the measure would also lead to a decrease in the group’s own capital.(IHT/Asahi: October 28,2008)

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PUBLISHED BY ‘THE ASAHI SHIMBUN’ (Japan)

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

KOREAN BANK CUTS RATES AGAIN AS SHAREMARKET SHEDS VALUE

Posted by Gilmour Poincaree on October 28, 2008

4:00AM Tuesday Oct 28, 2008

SEOUL – South Korea’s central bank slashed its key interest rate yesterday for the second time this BANK OF KOREA IN SEOULmonth in a bid to boost the economy and stock market amid the global financial crisis.

The Bank of Korea said it had lowered its benchmark seven-day repurchase rate from 5 per cent to 4.25 per cent.

The decision came as South Korean markets suffer due to the world financial turmoil. The country’s benchmark stock index lost one-fifth of its value last week, its worst weekly performance on record. The won currency has fallen sharply.

The Korea Composite Stock Price Index, which had fallen in early trading, rose as much as 2.9 per cent after the decision was announced.

Yesterday’s decision came at a rare interim policy meeting and follows acut of a quarter percentage point at a regular policy meeting this month.

It was the second unscheduled meeting for the bank since its current policy was established in 1998. The previous one came after the 9/11 terrorist attacks in the United States when the bank cut its key rate by half a percentage point.

The bank announced on Friday that South Korean economic growth slowed in the third quarter to 3.9 per cent, as construction contracted and the global slowdown hit manufacturing and exports. It was the worst performance by Asia’s fourth-largest economy since the second quarter of 2005, when it expanded 3.4 per cent.

The slowdown comes as the global financial crisis sends shockwaves through world markets and threatens to drag major economies into recession.

– AP

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PUBLISHED BY ‘THE NEW ZEALAND HERALD’

Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, SOUTH KOREA, THE FLOW OF INVESTMENTS | Leave a Comment »

OPEC GATHERS IN EMERGENCY MEETING AS OIL PRICES EVAPORATE; TALK OF 2M BARREL PRODUCTION CUT (Algeria)

Posted by Gilmour Poincaree on October 24, 2008


Last update: October 23, 2008 – 1:28 PM

by George Jahn, Associated Press

VIENNA, Austria – Iran and Venezuela on Thursday urged OPEC to quickly slash output and stem a Workers check the size on pipes at the Freeze Wall test site at Shell Oil Company's Mahogany Oil Shale Research Project near Meeker, Colo., on Wednesday, May 31, 2006. Shell Exploration & Production Co., which is poised to snap up a 160-acre experimental lease on federal lands rich in oil shale, gave a delegation of senators a progress report Wednesday on its efforts to bake shale oil from the ground in western Colorado (AP Photo - Ed Andrieski)steep slide in prices that has left crude at its cheapest in 15 months — and some member countries scrambling to balance their books.

But OPEC’s power to raise prices by cutting supply may be fading amid a global economic crisis that has evaporated demand for oil.

The latest weekly report from the U.S. Department of Energy shows that demand has fallen in 38 of the past 42 weeks. U.S. demand is down nearly 10 percent during the past four weeks year on year. The U.S. still consumes one out of every four barrels of oil produced.

“This is not a supply issue,” said trader and analyst Stephen Schork. “OPEC can affect supply but they can’t touch the demand side, which right now is a house of cards.”

Iranian oil minister Gholam Hossein Nozari told reporters, on the eve of an emergency OPEC meeting to address evaporating prices, that a cut of “two million (barrels per day) will stabilize” the market. And Rafael D. Ramirez, his Venezuelan counterpart, also left little doubt on where he stood.

“We have to take some action now, now,” said Ramirez, telling reporters that the 13 OPEC oil ministers meeting Friday will reach “consensus to take a very, very, very fast action.”

Both he and Iraq’s oil minister said their nations may be forced to rethink or cut spending next year.

Other oil ministers of the Organization of Petroleum Exporting Countries also said output cuts had to be on the table during their meeting Friday — but were well aware that if production is tightened too much, the resulting price spikes could knock a wobbling global economy even further out of kilter.

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PUBLISHED BY ‘STAR TRIBUNE’ (Argélia)

Posted in AFRICA, ALGERIA, ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INTERNATIONAL, IRAN, NATURAL GAS, OPEC, PETROL | Leave a Comment »

COMÉRCIO ENTRE CHINA E PAÍSES DA CPLP ULTRAPASSA OS 53 MIL MILHÕES DE DÓLARES (Angola)

Posted by Gilmour Poincaree on October 24, 2008


Ano 8 – Edição Online nº 2529 – Sexta, 24 de Outubro de 2008

A balança comercial entre a China e a Comunidade dos Países de Língua Portuguesa (CPLP) ultrapassou em Agosto os 53 mil milhões de dólares, passando o objectivo dos vários governos para o final de 2009 (50 mil milhões de dólares).

Segundo o documento , Angola é o segundo parceiro lusófono da China, com trocas comerciais de 18,6 mil milhões, mais 133,1 por cento do que no mesmo período de 2007, e correspondentes a vendas de 16,89 mil milhões e compras de cerca de 1,77 mil milhões.

O comércio de Angola com a China continua em alta e a favor do primeiro país, à luz das trocas dos oito últimos meses, cujos dados foram publicados quarta-feira pelo Gabinete de Apoio ao Secretariado Permanente do Fórum para a Cooperação Económica e Comercial entre a China e os Países Lusófonos.

Em Agosto passado, as trocas comerciais somaram exactamente 53,3 mil milhões, 92,9 por cento a mais do que no mesmo período de 2007, no fim do qual se fixaram a 46,3 mil milhões.

A China comprou dos oito países de língua oficial portuguesa produtos no valor de 37,288 mil milhões de dólares e vendeu o equivalente a 16 mil milhões de dólares. Convém ressalvar a situação de São Tomé e Príncipe, o qual não está directamente ligado ao Fórum por ter relações diplomáticas com Taiwan, mas integra a lista de trocas comerciais.

O Brasil, que viu o comércio com a China aumentar 82,2 por cento, manteve-se como principal parceiro lusófono de Pequim, tendo exportado para o continente bens no valor de 20,1 mil milhões e importado o equivalente a 12,66 milhões, fechando as trocas comerciais globais com negócios no valor de 32,7 milhões.

Portugal é o terceiro parceiro lusófono da China, registando um comércio bilateral de 1,7 mil milhões relativos a vendas de 234,2 milhões e compras à China de 1,47 mil milhões de dólares.

O comércio entre a China e Portugal registou uma diminuição de 17,6 por cento nas importações chinesas e um aumento de 24,5 por cento nas importações de Portugal, o que corresponde a um acréscimo global das trocas de 16,3 por cento.

Portanto, o comércio entre a China e os países lusófonos mantém uma forte tendência de crescimento iniciada em Outubro de 2003, com o estabelecimento do Fórum para Cooperação Económica e Comercial entre a China e os Países Lusófonos, que tem na Região Administrativa Especial de Macau uma base de apoio de contratos e promoção.

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PUBLISHED BY ‘JORNAL DE ANGOLA’

Posted in AFRICA, ANGOLA, ASIA, BRASIL, CAPE VERDE, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMY, INTERNATIONAL, MOZAMBIQUE, PORTUGAL | Leave a Comment »

SUGAR IMPORT MAY PUSH UP PRICES TO RS50 (Pakistan)

Posted by Gilmour Poincaree on October 22, 2008

Tuesday, October 21, 2008

by Aftab Maken

ISLAMABAD: Blame game between policy-makers and millers seems to have further pushed up sugar prices in the local market but its supply is expected to be stable next year, sources in the industry and government confided to The News on Monday.

“Current sugar prices are actual rates compared to suppressed prices of last year,” said Secretary General of Pakistan Sugar Mills Association (PSMA) K A Qazalbash, adding it would be above and around Rs50 per kg if the government allowed traders to import the sweetener.

About last year’s stock of 5.7 million tonnes, Qazalbash said it was exactly what the association projected and “we requested high officials to allow export of surplus 1.5 million tonnes after keeping 4.2 million tonnes for domestic consumption but they did not allow in order to bring down prices in the local market.”

The stock stood at 1.14 million tonnes on Sept 30 and the PSMA secretary general hoped that it was enough to cater to domestic consumption. Allowing imports for domestic consumption would further push up prices of sugar, he added.

About the increase in consumption, he said sugar consumption in downstream industry, particularly bakeries, had increased manifold while its usage in other industries like beverages and pharmaceutical products had also risen.

Millers were citing causes like sugar smuggling to Afghanistan, lower-than-expected cane production, grim situation in the international commodity market and actual prices in the local market, which might push the prices to above Rs50 per kg for the first time, a high official of the Ministry of Industries and Production said.

Government circles, giving the other side of the story, mainly attributed the current increase in sugar prices to under-invoicing of the commodity and export of nearly one million tonnes to Afghanistan through Chaman. However, figures compiled by the Federal Bureau of Statistics (FBS) showed export of nearly 240,000 tonnes, the official said. Current sugarcane crop is expected to be lower at around 53 million tonnes with sugar production at 3.7 million tonnes.

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PUBLISHED BY ‘THE NEWS’ (Paklistan)

Posted in ASIA, COMMODITIES MARKET, ECONOMY, INTERNATIONAL, PAKISTAN, SUGAR | Leave a Comment »