UPDATE--------------MARCH 27, 2010 SATURDAY
BANGLADESH
NEWS
Dhaka, Delhi to allow cargo vehicles along border on May 1
Bangladesh and India are set to allow movement of cargo vehicles at land customs stations along the border from May 1 to accelerate bilateral trade and reduce the hassles and costs involved, according to the foreign affairs ministry.
Shipping and commerce ministry officials said Dhaka and New Delhi would now frame a ‘standard operating procedure’ as a legal framework to ease restrictions on vehicles in crossing the border to facilitate higher, hassle-free trade.
The foreign ministry, in a letter sent to the Indian high commission in Dhaka on March 21, requested the Indian authorities to provide a draft of the standard operating procedure to begin movement of cargo vehicles on the stipulated date.
There is now no formal agreement or protocol on standard practice between the two countries to allow cargo vehicles including trucks to go beyond no man’s land.
Customs officials also said Bangladesh informally allows Indian trucks to enter 300 metres into Bangladesh but India does not give a similar facility to Bangladeshi vehicles.
At least 1,200 trucks from the two sides of the border load and unload goods and commodities at the land customs stations every working day, they said.
‘Restrictions on the movement of cargo vehicles and absence of proper arrangement to allow access of goods trucks into each other’s territory slow down trade and add costs. If the two countries can reach an agreement on a standard procedure, it will be more helpful for Bangladesh,’ a commerce ministry official told New Age on Monday.
The two countries decided to relax the restrictions on the movement of cargo vehicles along the border in keeping with the spirit of the prime ministers of the two countries during the visit of the Bangladesh Prime Minister, Sheikh Hasina, to India in January.
New Delhi agreed to share the draft standard operating procedure for the movement of cargo vehicles along the Bangladesh-India border to adopt the procedure on May 1, the foreign ministry letter said. Copies of the letter have been sent to the commerce and the shipping ministry and the National Board of Revenue to take follow-up steps, the officials concerned said.
The major portion of the two-way trade amounting to almost $4 billion a year is transacted through 25 land customs stations now.
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BB launches road show campaign
Bangladesh Bank on Friday launched a road show campaign styled ‘Unnayaner Abhijatra-Teknaf to Tentulia’ involving a convoy of 40 vehicles to spread financial literacy and combat money laundering.
The week-long road show was launched by Bangladesh Bank governor Atiur Rahman from Teknaf Girls School in Teknaf, the southernmost resort town of the country. It will end at Tentulia, the northernmost tip of the country, on April 2.
The road show is being organised with the assistance of the country’s private commercial banks to campaign for financing small and medium enterprises and encouraging people to send remittances through legal channels.
The central bank governor hoped the road show would help spread financial literacy among the people.
He said the road show would teach the countrymen how to get agriculture loans and loans for small and medium enterprises easily. ‘Countries like India, Sri Lanka, United States and Canada undertake such programmes to educate the people about financing and risk management in investment.
‘Once financial literacy rate is increased, lifestyles of the people would improve,’ Atiqur Rahman hoped.
He said the central bank’s decision to allow farmers to open a bank account with only Taka 10 will enable everyone to have a bank account soon.
‘There is no alternative to upgrading the living standard of the farmers as the country’s agricultural productivity rate ranks second to China in the world with its 22 per cent contribution to the country’s GDP,’ he said.
He also said the central bank wanted to ensure inclusive banking for all so that people from even remote areas could make transactions through normal channels.
Murshid Kuli Khan, deputy governor of Bangladesh Bank, Kaiser A Chowdhury, managing director of AB Bank, Aftabul Alam, chairman of SME Foundation, and local lawmaker Abdur Rahman Badi were present at the inaugural ceremony.
Aftabul Alam said the central bank has initiated a programme of disbursing a loan of Tk 24,000 crore to small and medium entrepreneurs across the country. ‘Once the programme is implemented, it will change the socio-economic condition of the countrymen.’
As part of the programme, the central bank will organize rallies and discussions at 13 points, including Teknaf, Cox’s Bazar, Chittagong, Feni, Comilla, Tangail, Sirajganj, Bogra, Rangpur, Dinajpur, Thakurgaon, Panchagarh and Tentulia.
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STOCK MARKET
Dhaka stocks pass volatile week
A volatile week for the capital market saw Dhaka stock’s benchmark index start the week with the second highest single-day gain in the bourse’s history, only to fall again steeply.
Dhaka Stock Exchange’s benchmark, the general index, opened the week at 5,408.66 points and closed at 5,617.93, rising by 3.87 per cent, or 209 points, over the week.
Of the five trading days, the bourse was up on the first two days followed by a slump on Tuesday due to investors’ panic selling over a directive of the regulator.
The market bounced back on Wednesday but ended slightly lower on Thursday.
The week’s first trading session on Sunday saw the DGEN surging by 2.58 per cent mainly due to a hefty rise in Grameenphone as its dividend declaration lifted investors’ morale.
The index rose by 139 points—the second highest gain since January 25 this year when it gained 155 points.
GP, which makes up nearly a fifth of Dhaka stock’s market capitalization, climbed 8.75 per cent on the day to Tk 341.80 after its board recommended a 60-per cent dividend.
Brokerage house officials said retail investors bought GP shares heavily although the company was trading at the spot market where stocks can be bought only with cash.
Market analysts said smooth DSE polls and the market regulator easing credit facilities boosted investors’ confidence.
Banking sector, the bellwether of the market, declined marginally by 0.22 per cent while the non-banking financial institutions edged up 0.87 per cent.
The pharmaceuticals gained 1.99 per cent, insurers 1.37 per cent and cement 1.07 per cent.
Mutual funds dropped by 0.85 per cent and energy by 0.02 per cent.
Daily turnover amounted to Tk 9.75 billion — an increase of 8.5 per cent over the previous session’s Tk 8.97 billion.
Market players, however, questioned the sustainability of the gain.
‘The market is still overheated and might dive once the hype over GP dividend is over’, a senior official of a merchant bank told the news agency.
On Monday, the daily turnover hit a one month high, crossing the Tk 10 billion mark for the first time since February 24.
In a volatile market, the index hit the highest level at 5,580.17 due to a hike in banks but dropped to 5,548.22 after GP declined nearly one per cent.
On Tuesday, the market fell by almost one per cent amid volatile trading, as the investors reacted negatively to a new directive of the Securities and Exchange Commission.
A group of investors demonstrated in front of the SEC office after trading hours and DSE building during the session demanding withdrawal of the directive.
The SEC’s clarification cooled down the investors as on Wednesday the stock’s hit a three-week high.
‘Some of the investors decided to ‘wait and see’, leading to the turnover shrinking drastically,’ an official of Latif Securities told the news agency.
Total turnover stood at Tk 8.96 billion, down 18.68 per cent from Tuesday’s Tk 11.03 billion.
Meanwhile, the daily average turnover of the week also rose by 36.11 per cent to Tk 9.73 billion from last week’s average of Tk 7.14 billion.
GP, Beximco, Beximco Pharmaceuticals, Bextex and Summit Power were the week’s turnover leaders.
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Home-based woman entrepreneurs demand more access to market
Less access to market and lack of adequate capital are the main hurdles for the home-based women entrepreneurs in Khulna.
Under the umbrella of different cooperative organizations in different areas of the region, they are producing different household products.
‘With our small capital, we are producing handicrafts, sewing goods, clothes, pillow covers, bed covers and bed sheets and other items in our houses,’ said Taslima Choudhury, 28, of Khan A Sabur Road in the Khulna city.
She said their scope for exhibiting and selling their goods was limited, and that was why they were failing to flourish despite their immense potential.
Another home-based entrepreneur Sandhya Rani Biswas, 38, of CNB Colony in the city said they would be able to produce more products, if they were given assistance by the Khulna Chamber of Commerce and Industry and the upazila and district administrations.
‘If the KCCI allocates to us at least one stall at the international trade fair held in Khulna every year free of cost, we will be able to exhibit our products in the fair and thus our products may draw the attention of the international buyers,’ Sandhya said.
Mahira Khatun Popy, secretary of the Udyom Home-based women entrepreneurs’ federation in Khulna, said they had appealed to the KCCI president and the Khulna deputy commissioner for a stall at in the upcoming Khulna International Trade Fair 2010 which will begin in the city on April 1.
The federation was formed with 40 home-based women entrepreneurs’ cooperative organizations, each with 20 members, with the help of a non-governmental organization under their home-based entrepreneurship development programme in Paikgachha, Batiyaghata and Phultala upazilas in Khulna and all the five thana areas of the Khulna city, she said
She also said the organization was marketing and exhibiting their products through four outlets — one each in Paikgachha, Batiyaghata and Phultala upazilas and one in the Khulna city.
The Khulna deputy commissioner, NM Zeaul Alam, talking to New Age, said the administration was always in favour of the home-based women entrepreneurs and added that he had already recommended the KCCI to allocate a stall to the home-based women entrepreneurs.
The KCCI president, Saharuzzaman Mortuza, told New Age that the chamber was always keen to encourage and assist woman entrepreneurs and added that they would try to allocate a stall to them in the upcoming international trade fair.
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WORLD ECONOMY
2nd round of BA strikes to begin
British Airways is bracing for a second round of strikes, to last four days starting at midnight, as its chief executive is accused of trying to break the union.
Cabin crews are striking over pay and changes to working conditions.
Earlier this week, the airline withdrew valuable travel perks from crew members who walked off the job, saying they were non-contractual. The Unite union says any deal would have to include the restoration of those privileges.
In a letter to the Guardian newspaper, 95 British academics say that CEO Willie Walsh’s actions ‘notwithstanding his protestations to the contrary, are explicable only by the desire to break the union which represents the cabin crew.’
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EXCLUSIVE
‘World trade to grow 9.5pc’
World trade is expected to grow 9.5 per cent in 2010, after suffering its biggest collapse since World War II in 2009, the head of the World Trade Organization Pascal Lamy said on Friday.
‘Our economists are forecasting a world trade growth for 2010 of 9.5 per cent with developing countries’ trade growing 11 per cent and industrialized countries’ trade growing by 7.5 per cent,’ the WTO director-general said.
‘This means that trade-wise, there is light at the end of the tunnel and it’s certainly good forecast, good news for the world economy,’ he added.
World trade plunged 12 per cent in 2009 due to the global economic crisis.
Patrick Low, chief economist at the WTO, noted that the projected growth of 9.5 per cent this year would need to be repeated in 2011 in order for the global economy to recover to peak trade levels reached in 2008 before the crisis struck.
‘If you need to do it in one year, you’ll need 14 per cent,’ he added.
Amid the slump in world trade last year, China overtook Germany to become the world’s top exporter with some $1.20 trillion worth of merchandise exported in 2009, according to WTO data.
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BANGLADESH
NEWS
Cox’s Bazar airport to go modern by 2012
The age-old Cox’s Bazar airport will go modern by 2012, civil aviation sources said on Friday, disclosing that the construction work is likely to be started at the end of this year with an initial cost of Tk 302 crore.
‘The project has already been approved by the ECNEC, while the selection of the construction firm is almost on the final stage,’ manager of the airport Mahmud Akhter told the news agency over phone in the tourist city.
Mahmud said a new terminal building will be build under the second phase of the project, which has also a provision to expand the runway to 9,000 feet from existing 6,775 feet and widen the runway to 200 feet from current 150 feet.
‘Once built, the airport will be able to accommodate wide-bodied aircrafts,’ Mahmud said, adding the modernization of the airport has been spelt out and expedited by Prime Minister Sheikh Hasina.
Mayor of Cox’s Bazar Sarwar Kamal said reshaping the airport was a long demand from the people of greater Cox’s Bazar and tourists from other parts of the country and beyond.
He said the poor condition of the existing airport has been adversely impacting the growth of tourism in the area as both airliners and travelers seldom find the airport convenient for them.
Built during the Second World War, the Cox’s Bazar airport now cater for small aircrafts from the capital, Dhaka.
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WORLD ECONOMY
EU seals Greek rescue deal
European leaders clinched a deal to rescue Greece from its debt crisis, with a standby package of loans backed by the International Monetary Fund halting the euro's slide on Friday.
The historic pact- which re-writes the eurozone rule-book for all-was designed to 'reassure all holders of Greek bonds' that European partners 'will never abandon Greece,' according to European Union president Herman Van Rompuy at a European Union summit in Brussels.
The EU figurehead said all 16 eurozone nations, including Greece, had committed to 'participate,' which was also designed send a message to speculators not to simply switch their attentions from Greece to a new target in trouble, whether Portugal, Spain or Ireland.
More broadly, leaders further agreed on the need for stronger 'economic governance' in Europe with strengthened penalties for countries that consistently breach the EU rules.
In early London deals on Friday, the currency pulled away from 10-month lows against the dollar, up from $1.3277 in New York late on Thursday.
'I would have been surprised if the euro had not gone in that direction,' said Luxembourg Prime Minister Jean-Claude Juncker as he arrived for the second day of the summit.
However, Credit Agricole analyst Mitul Kotecha warned that criticism of the IMF's involvement by European Central Bank chief Jean-Claude Trichet, although he later fell into line, 'has kept the euro under pressure.'
Trichet was on the back foot in Brussels, having cautioned beforehand against 'all signs of a lack of responsibility' for the eurozone, which he considered would be 'obviously very, very bad.'
Kotecha underlined: 'The damage was already done and any relief to euro-dollar (exchange rates) will be short-lived.'
After months spent warily sizing up the threat, Greek Prime Minister George Papandreou insisted that both 'Europe and Greece will emerge stronger from this crisis.'
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EU, US move to allow foreign ownership of airlines
The European Union and the United States on Thursday took a 'major step forward' in aviation liberalisation, paving the way for foreign ownership of their airlines after lengthy talks, Brussels said.
However the International Air Transport Association said the results of the deal were disappointing as they did not go far enough on the sensitive issue of EU and US airlines owning controlling stakes in each other.
Under the draft deal to move towards EU-US 'open skies' in the airline industry, European airlines would be able to take majority stakes in US companies, and eventually, US firms would be able to reciprocate.
But the accord calls for legislative changes both in European nations and the United States, and needs to be signed off by the US congress, an uncertain and lengthy prospect.
'Both sides have agreed to increase regulatory co-operation, and remove the barriers to market access that have been holding back the development of the world's most important aviation markets,' EU transport commissioner Siim Kallas said in a statement hailing the deal.
The draft accord represents 'a significant breakthrough in the process of normalizing the global airline industry,' the statement added.
'The new agreement affirms that the terms of the 2007 agreement will remain in place indefinitely,' a US department of state spokesman said in a statement.
The 2007 deal, which took four years to thrash out and went into effect early 2008, eliminated air service restrictions between the United States and Europe, allowing airlines from both sides to select routes and destinations based on consumer demand for both passenger and cargo services.
The new accord 'deepens US-EU cooperation in aviation security, safety, competition, and ease of travel,' the US department of state spokesman said.
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UPDATE---------------MARCH 26, 2010 FRIDAY
BANGLADESH
EXCLUSIVE
FDI nosedives in first half of this fiscal year
Inflation and unemployment will soar, say experts
Foreign direct investment has nosedived in the first six months of this fiscal year as the government has failed to arrest the worsening power and energy situation, said Bangladesh Bank officials and the investors.
The Bangladesh Bank’s monthly update revealed that the country received FDI of only $197 million in the July-December period of the 2009-10 fiscal year.
But the country received FDI worth $603 million in the same period of the last fiscal year, which means that the inflow of investment has declined by a whopping 64 per cent, added the central bank’s monthly update.
The major reason for such alarming fall in FDI has been attributed to the shortage of gas and electricity which has become critical in the last few months.
The director-general of the Bangladesh Institute of Development Studies, MK Mujeri, observed that lack of investment could destabilize the macro-economic situation and push up the rate of inflation which is now hovering at around 9 per cent.
Not only FDI, but also many investment plans by the locals have been suspended because of power and energy shortage. The business chambers, which are extremely worried at the present situation, have already warned the government that the scope of employment generation will be affected adversely because of falling investment in a country where the rate of unemployment is very high.
Some 2.7 million young people are becoming eligible for jobs every passing year, but the country can absorb only 0.7 million of them.
The Metropolitan Chamber of Commerce and Industry, the country’s oldest business body, in its quarterly review last December pointed out that the poor investment scenario could jeopardize employment generation scope.
It stated that the rate of unemployment was already soaring because of lack of investment.
Apparel industry leaders last week demanded steady supply of power and gas to ensure uninterrupted production in factories of the country’s largest export sector that accounted for nearly 80 per cent of the country’s overall export earnings of $15.4 billion in the 2008-09 fiscal year and employs more than 3 million workers, mostly women.
Leaders of the Bangladesh Garments Manufacturers and Exporters Association voiced the demand while meeting the prime minister’s energy adviser, Tawfik-e-Elahi Chowdhury, and state minister for power, Enamul Huq, at the secretariat on Tuesday.
The demand for gas in the country is 2,250 million cubic feet daily against the production of 1,960 to 1,980 million cubic feet, while power production is 3,600-3,800 megawatt daily against the demand for 5,000 to 5,500 megawatts.
‘The situation in the readymade garments industries is not good because of the prevailing gas and power crisis. The supply has to be ensured by giving top priority to the industry,’ said BGMEA’s President Abdus Salam Murshedy.
The Bangladesh Knitwear Manufacturers and Exporters Association’s president, Fazlul Haque, observed that the future of the country’s main export sector was being endangered by inadequate supply of gas and power.
Shortage of the two vital fuels of development has halted regular production in a number of export-oriented factories in Dhaka, Chittagong, Gazipur, Savar and Narayanganj, he added.
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NEWS
Anti-money laundering roadshow starts today
The Teknaf-Tetulia roadshow aimed mainly at raising awareness against money laundering starts today in Cox’s Bazar.
Governor of Bangladesh Bank Atiur Rahman is expected to inaugurate the eight-day roadshow on the premises of Teknaf branch of AB Bank Friday morning.
Bangladesh Bank, in cooperation with 37 other banks and the Small and Medium Enterprise Foundation, is organizing the roadshow.
The theme of the roadshow is resisting money laundering and Hundi, promotion of transferring money through legal channels, and creating awareness on SME financing and agriculture loans.
During the roadshow from Teknaf in the south to Tetulia in the north, various programmes along with banking and SME fairs will be held in 13 districts.
All participating banks along with the SME Foundation will be organizing individual stalls in the fairs with the objective of creating awareness on anti-money laundering, sending money through legal channels, SME loans and financing, and Agriculture loans.
The programmes include cultural evening on the premises of NCC Bank Cox’s Bazar branch from 5:00pm to 8:30pm today, view exchange meetings on the premises of National Bank Chittagong branch from 4:00pm to 6:30pm on Saturday, Dhaka Bank Feni branch from 10:30am to 1:00pm on Sunday, Prime Bank Comilla branch from 4:30pm to 7:00pm on Sunday, Bangladesh Krishi Bank Tangail branch from 10:30am to 1:00pm on Tuesday, One Bank Sirajganj branch from 5:00pm to 7:30pm on Tuesday, Standard chartered Bank Bogra branch from 10:30am to 1:00pm on Wednesday, Sonali Bank Rangpur branch from 5:00pm to 7:30pm on Wednesday, Jamuna Bank Dinajpur branch from 10:30am to 1:00pm on Thursday, Uttara Bank Thakurgaon branch from 4:30pm to 7:00pm on Thursday and Islami Bank Bangladesh Ltd Panchagarh branch from 10:00am to 12:30pm on Friday.
The road show will conclude with a function starting at 4:30pm on April 2 on the premises of the Tetulia branch of Brac Bank.
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Offload SoE’s shares to boost capital market: DSE president
Dhaka Stock Exchange president Md Rakibur Rahman has urged the government to offload shares of 26 state-owned enterprises as soon as possible, to increase the supply of shares in the stock market.
He also urged small investors to buy shares of companies with sound fundamentals, rather than ‘overheated’ shares in companies.
The DSE president appealed to the finance minister to remove officials at these SoEs who are not willing to offload their companies’ shares.
‘Put honest and efficient officials in charge. I hope the companies will be able to offload their shares within six months,’ he said while addressing a press conference marking the first anniversary of the present board of directors of the DSE at a Dhaka hotel on Thursday.
The DSE president urged companies to raise capital from the market issuing initial public offerings through the book building method. RAK Ceramics Bangladesh Limited has already fixed their share price through book building method.
Rakibur Rahman also urged the National Board of Revenue not to do anything that could affect investors, to the point of forcing them to even leave the market. ‘NBR could enrich the capital market by issuing preferential shares through bonds.’
Rahman said that the capital market was making a good contribution to GDP, as market capitalization as a percentage of GDP is currently 38.38 per cent, whereas it was only 18.44 per cent one year back.
Besides, the number of BO accounts also increased heavily, reaching 22,12,830 on February 28, 2010 compared to 14, 67,467 on February 28, 2009.
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Digitized money transfer system in post offices soon
The postal department is introducing ‘electronic money order’, ‘mobile money order’ and ‘postal cash card’ services for its customers to help avoid the risk of carrying cash and transfer money within an hour even to remote areas.
Under the existing system, it takes 7 to 10 days to transfer money to remote areas.
Prime Minister Sheikh Hasina is expected to inaugurate the services today from the Ganabhaban, a postal department source said.
Customers using PCC can go for cash transaction and payment of all sorts of utility bills through ATM and point of sale, said post and telecommunications secretary Sunil Kanti Bose., ‘It is part of the initiatives taken by the postal department to build a ‘digital Bangladesh’’ he told BSS.
The director general of postal department Mobasser-ur-Rahman said virtual private network server has been set up on the second floor of GPO Bhaban to conduct the service.
Five hundred post offices in the district towns would be brought under the network in the first phase, he said, while 1650 sub-post offices would be brought in the second phase and 8,500 post offices in the third.
The whole country is expected to be brought under the system between June and December.
Under the system, a customer will be able to buy ATM or PCC for any amount from any post office. Charging the card with the PoS machine, he will be able to withdraw the necessary amount. The postmaster of the post office concerned would be bound to pay the customer the required amount.
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Biman flights to depart one hour in advance from scheduled time
In view of the decision of not effecting the change in daylight saving time from April 1, the Biman flights both in domestic and international routes will now be departing one hour in advance from the pre-scheduled time.
Passengers already re-confirmed their tickets by March 24 for journey on and after April 1 will have to report to the airport one hour in advance accordingly, said a release of Biman Bangladesh Airlines.
For further information or for any queries, passengers have been requested to contact nearest Biman sales office for their convenience.
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Danish business team to visit Bangladesh April 9
A delegation of 12 Danish companies will arrive in Dhaka on April 9 on a five day visit to explore opportunities for business cooperation with Bangladeshi companies in the energy and environment sectors.
The Danish companies are mostly active in conventional energy, renewable energy and waste and water management. One of the companies is active in metal waste (tin and steel) handling, said a Denmark embassy release.
The objective of the visit is to introduce Danish companies to relevant national companies in order to explore possibilities for setting up long-term cooperation/joint venture between companies from Denmark and Bangladesh.
The embassy of Denmark is looking for potential relevant Bangladeshi companies for planning pre-fixed meetings for the Danish companies.
Bangladeshi companies interested in meeting the Danish companies have been asked to contact embassy’s business section on phone at 8822499.
‘In a response to Bangladesh Government’s initiative for attracting foreign investment in the energy and power sector, the embassy of Denmark has invited Danish companies active in energy and green technology to visit Bangladesh to assess and explore opportunities for investments and business cooperation in Bangladesh’, says the Danish ambassador Einar H Jensen.
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WORLD ECONOMY
Dubai offers $9.5b in new aid to struggling firm
Dubai’s government said Thursday it will pump up to $9.5 billion into Dubai World as part of a long-awaited restructuring plan to rescue its chief conglomerate from a crippling debt crisis that undermined investor confidence in the one-time Arab boomtown.
The proposal, which still needs approval from creditors, comes after months of talks following Dubai World’s bombshell announcement in November that is would seek delays in repaying $26 billion in debt until at least May. The conglomerate’s woes came to symbolize Dubai’s boom to bust as the global meltdown dried up the cheap credit on which the glitzy city-state had depended to fuel its meteoric growth.
Sheik Ahmed bin Saeed Al Maktoum, the chairman of Dubai’s supreme fiscal committee said in a statement that the support aims to ensure Dubai World and property development arm Nakheel ‘are key contributors to the strong economic future of the Emirate of Dubai and the wider United Arab Emirates.’
Sheik Ahmed, who is also the uncle of Dubai’s ruler, says the new funding includes $5.7 billion of the money remaining from a bailout by neighboring Abu Dhabi and ‘internal Dubai Government resources.’
The plan offers creditors full repayment on the principal of their outstanding loans over a five to eight year period by issuing new debt. It was not clear how much interest, if any, is being offered, but Dubai World’s chief restructuring officer said Thursday the debt would not be backed by the Dubai government.
Investors in Dubai welcomed the news. Shares on the city-state’s main stock exchange, the Dubai Financial Market, shot up 4.9 per cent in early trading. Shares of DP World, Dubai World’s publicly traded port operator, rallied over 4 per cent to trade at 50 cents apiece on the Nasdaq Dubai, another exchange in the emirate. Other Gulf markets also posted gains, reflecting investors’ relief over concerns Dubai’s debt woes could harm its neighbors.
‘This is a very positive announcement and the markets are reacting accordingly,’ said Mohammed Shakeel, an Abu Dhabi-based independent economist. ‘Dubai is essentially saying that it is through the worst.’
Dubai has received $20 billion in emergency funds from its oil-rich neighbor Abu Dhabi, which is also the capital of the United Arab Emirates, a seven-state federation of which Dubai is part. Abu Dhabi holds nearly all the UAE’s oil wealth.
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Eurozone fears loom over Asian markets
Deepening fears that a sovereign debt crisis may engulf the eurozone rattled Asian markets Thursday, with shares mixed across the region following a weak lead from Wall Street.
Concerns that the Greek financial crisis could be spreading were heightened after Portugal was hit by a credit downgrade and Spain faced mounting criticism of its budget plans Wednesday.
EU leaders meanwhile struggled to agree on what to do about Athens’ woes ahead of a critical summit starting Thursday, with officials foreseeing an unprecedented intervention by the IMF.
‘The downgrade of Portugal highlights the fact that European sovereign debt problems haven’t been resolved and could possibly be systemic,’ Macquarie Private Wealth associate director Marcus Droga told Dow Jones Newswires.
The deputy governor of the People’s Bank of China also raised concerns by referring to Greece’s debt crisis as ‘a tip of the iceberg,’ aggravating markets enough to send the euro to a 10-month low against the dollar.
The ‘main concern today obviously is Spain and Italy’, said Zhu Min in a speech in Hong Kong. The single currency dropped below $1.33 for the first time since May 7 last year, falling to an intraday $1.3283.
Sentiment in Asia was mixed with some markets showing more seasonal resilience than others nearing the end of the quarter.
Hong Kong closed down 1.10 per cent or 230.07 points to 20,778.55 while Sydney shed 0.12 per cent or 6.1 points to end at 4,885.4.
‘Once again, these sovereign debt concerns have reared their ugly head,’ said IG Markets analyst Ben Potter.
Shanghai dropped 1.23 per cent, or 37.63 points to 3,019.18 weighed by profit-taking in banks on fears that many could be saddled with bad loans, dealers said. Bank of China fell 1.4 per cent while ICBC edged down 0.2 per cent.
However, Tokyo edged 0.13 per cent higher, gaining 13.82 points to 10,828.85 with exporters boosted by a weaker yen, raising expectations for repatriated earnings. Honda rose 1.2 per cent and machinery maker Fanuc added 4.0 per cent.
The greenback had risen to as high as 92.24 yen in New York Wednesday afternoon but stood at 91.80 yen in Tokyo due to profit-taking.
On Wednesday, Fitch Ratings downgraded Portugal’s credit rating by one notch and issued a negative outlook for it, further denting investors’ appetite for risk as Greece’s debt woes continued to roil markets.
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NEWS IN FOCUS
Oil extends losses
Oil prices extended losses in Asian trade Thursday on US demand worries after a government inventory report showed a surge in crude stocks in the world’s largest energy consumer, analysts said.
New York’s main contract, light sweet crude for May delivery, dropped 20 cents to $80.41 a barrel. The contract had shed $1.30 Wednesday. Brent North Sea crude for May was down 24 cents to $79.38 a barrel.
The US Department of Energy said in its weekly inventory report Wednesday crude oil inventories rose 7.2 million barrels last week, confounding expectations of an increase of 1.7 million barrels.
‘Primarily, the market is responding to the report which showed a very substantial increase in crude oil inventory over the past week,’ said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
Oil was also under pressure from ‘the continued volatility of the US dollar versus the euro’ amid heightened fears over the debt crisis engulfing Greece and Portugal that has sent the euro dipping lower this week, said Shum.
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Gulf States urged to coordinate for financial stability
Gulf central bank chiefs on Wednesday wrapped up a one-day meeting on financial stability in the face of the global economic downturn and progress on regional monetary union.
Monetary officials of the six-nation Gulf Cooperation Council states also reviewed plans to establish monetary union and launch a single currency.
‘The GCC monetary council will meet at the end of the month to approve plans and the time-frame to complete the necessary financial infrastructure,’ Kuwait central bank governor Sheikh Salem Abdulaziz al-Sabah told a news conference.
‘There are certain legislative and financial measures that have not been completed’ for the monetary union, Sheikh Salem said.
In December, the GCC summit in Kuwait approved a monetary union pact which calls for the establishment of the monetary council.
The council, to be based in Riyadh, will develop in the future into the GCC central bank to be hosted in the Saudi capital. The bank will be charged with issuing the GCC single currency.
Bahrain, Kuwait, Qatar and Saudi Arabia have ratified the monetary union pact while the other two members—Oman and the United Arab Emirates—have opted out.
The UAE, the Gulf’s second largest economy, withdrew over the choice of Riyadh as the base for the future central bank. Oman pulled out saying it could not meet the union’s prerequisites.
On Wednesday Sheikh Salem and UAE central bank governor Sultan al-Suweidi denied that mediation is under way to bring the UAE back into the monetary union fold.
He said that it was premature to say whether the single currency will be pegged to the dollar or to a basket of currencies, adding that this will be decided later.
Sheikh Salem said he does not think that the global financial crisis has slowed the GCC monetary union process.
Earlier, he called for more coordination between GCC states to achieve financial stability.
‘This period necessarily requires that our attention is focused on issues related to achieving financial stability,’ Sheikh Salem said in his opening speech.
‘Inflationary pressures have greatly declined, but this does not mean they have disappeared... This has enabled Gulf central banks to adopt measures to face the impacts of the global financial crisis’ and of slow growth, he said.
Sheikh Salem also called on supervisory and monitoring agencies in GCC states to adopt ‘early-warning systems to boost their ability’ to deal with future financial crises.
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Germany insists on IMF rescue ahead of EU summit
Chancellor Angela Merkel stuck to her hard-line position on Greece ahead of a crunch EU summit starting Thursday, saying she refused to violate ‘the trust’ of the German people in the euro.
‘The German government will press for emergency aid combining IMF and joint bilateral aid from the eurozone but, I say again, only as a last resort,’ she told the Bundestag lower house of parliament before departing for Brussels.
‘I will work decisively for the adoption of an IMF-plus-bilateral-aid decision (at the summit). We will again work very closely with France on this.’
EU powerhouse Germany, confronted by strong public opposition to covering Greece’s unpaid bills, has baulked at calls for European aid for Athens, preferring an IMF-led rescue if one is necessary.
Many other eurozone nations, led by France, have championed a purely European solution, fearing that recourse to the IMF would cast a long shadow over the euro, 11 years after its creation.
But the chancellor fears that any European aid could be challenged in Germany’s courts and has an eye on a crucial regional election in May.
Merkel said that whatever happens over Greece, in the longer term changes have to be made to the EU’s governing treaties, both to deal with future crises and to prevent them happening in the first place.
‘I will push for necessary treaty changes so that we can act sooner and more effectively when things go wrong, including with targeted sanctions,’ Merkel said, citing as an example ‘in particular stronger deficit procedures.’
She said the eurozone had to be able to deal with the eventuality of a member state becoming ‘insolvent’ in a controlled manner ‘without threatening the stability’ of the 16-nation bloc.
‘Europe must learn the right lessons for the future ... We have seen that the instruments of the eurozone as they currently stand are insufficient,’ Merkel said.
She said she ‘expressly supported’ proposals by finance minister Wolfgang Schaeuble for tougher sanctions against fiscal sinners.
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LG aims to secure 25pc of world 3D TV market
South Korea’s LG Electronics said Thursday it aims to secure a 25 per cent share this year of the world’s fast-growing 3D television market.
The company announced its target after unveiling what it called the world’s first full LED (light emitting diode) 3D flat panel television.
LG, the world’s second-largest liquid crystal display TV maker by sales, also said it is targeting a 15 per cent share of the global LCD TV market this year, up from around 12 per cent last year.
‘With an increased number of customers experiencing 3D technology and fast-rising 3D content, such as movies, sports and education as well as 3D- related devices, demand for such TVs is expected to grow rapidly (this year),’ Havis Kwon, head of the firm’s LCD TV division, told a news conference.
LG will increasingly bet on 3D TV as it sees more growth potential in the segment, he said. It estimates that global demand for such TVs will reach 13 million sets next year and 83 million by 2014.
The firm said its new LED model would help the company in the 3D market.
Available in 47- and 55-inch versions, the LX9500 model uses an innovative backlight structure to deliver ‘spectacular pictures for the ultimate 3D experience’, it said in a statement.
The new product also uses special glasses that are comfortable enough for viewers to wear for an extended period, LG said.
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China to deliver Rio Tinto verdict on Monday
The verdict in the high-profile Chinese trial of four employees of mining giant Rio Tinto will be delivered on March 29, the Anglo-Australian firm announced Thursday.
Australian executive Stern Hu and three other Chinese staff were tried this week in a Shanghai court on charges of accepting bribes totaling around 13 million dollars and stealing trade secrets.
All four defendants have pleaded guilty to taking money, and one admitted to commercial espionage, defense lawyers say, although the accused have challenged aspects of the charges.
‘Rio Tinto has been advised the verdicts in the trial of the four Shanghai employees will be delivered on 29 March 2010,’ the company said in a brief statement.
The Australian government confirmed the verdict would be delivered on Monday, and said consular officials would be present in the Shanghai courtroom to hear the decision.
Lawyers for the three Chinese defendants—Wang Yong, Liu Caikui and Ge Minqiang—said they had not yet been informed of a date for the verdict.
Calls to the court in Shanghai went unanswered.
During the three-day trial in China’s financial centre which ended Wednesday, the court heard evidence that millions of yuan in bribes had been stuffed into bags and boxes for the accused, according to press reports.
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China sees interest rates as ‘heavy-duty weapon’
A senior Chinese central banker on Thursday played down the need for an imminent rise in borrowing costs to keep a balance between growth and inflation in the world’s third-largest economy.
Zhu Min, a deputy governor of the People’s Bank of China, reaffirmed the central bank’s intention to refine its exchange-rate regime but gave no clue as to when it might drop the yuan’s 20-month-old peg to the dollar.
‘China should, China would, continue to improve its managed floating exchange rate regime based on market demand referenced to a basket of currencies,’ Zhu said.
‘We should and we could,’ he told the Credit Suisse Asian Investment Conference.
China is under intense pressure from Washington to let the yuan resume its rise in order to reduce its trade surplus.
The United States, saddled with near double-digit unemployment, argues that the yuan is unfairly undervalued, giving Chinese exporters an edge in global markets that destroys US jobs.
‘China should and could import more and keep the surplus small. I think this is good for China and this is good for the world,’ said Zhu, who is due to take up a senior post at the International Monetary Fund in May.
He said the PBOC was concerned about containing inflation expectations but signaled that it was wary of endangering growth by jacking up interest rates when it has other instruments in its policy toolkit that it can use first.
‘Interest rates are part of the whole thing, not necessarily the issue,’ said Zhu, speaking in English.
So far this year the PBOC has twice raised the proportion of deposits that banks must hold in reserve instead of lending out. The central bank has also drained large volumes of cash from the banking system through open market operations.
But, unlike the central banks of Australia, Malaysia, Vietnam and—last Friday—India, the PBOC has not changed its benchmark interest rates.
‘When we cope with inflation expectations, we are very careful. We want to make sure we maintain stability, liquidity and growth. We are very careful with interest rates: this is a heavy-duty weapon,’ Zhu said.
He reiterated the central bank’s wish to see a smooth pace of lending throughout the year and said loan growth was likely to slow further this month after halving in February to 700 billion yuan.
The bank has instructed banks to reduce total net new lending this year to 7.5 trillion yuan from a record 9.6 trillion in 2009, when lenders scrambled to put loans on their books to support the government’s economic recovery plan.
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Commercial airlines face $2.8b in losses in 2010
Commercial airlines worldwide should lose about $2.8 billion in 2010, but start enjoying a turnaround next year with the outlook rosier in Latin America and Asia, the IATA reported Wednesday.
The International Air Transport Association said airlines were the hardest hit in the United States and in Europe, where they had to boost efficiency as they struggle amid the global economic lull.
‘For the United States, the loss is 1.8 billion dollars; it is $2.2 billion for Europe and 400 (million dollars) for the Middle East,’ IATA chief Giovanni Bisignani said at the International Air and Space Fair under way in Chile’s capital.
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Another US web firm cut back in China
Two days after Google halted censorship in China, another leading US internet company, Go Daddy, said it was cutting back on its activities there because of Chinese regulations.
Go Daddy, the largest Web domain name registrar in the world, is no longer registering names in China because of ‘chilling’ new requirements imposed by the Chinese authorities, executive vice president Christine Jones said on Wednesday.
Jones also told a hearing of the congressional-executive commission on China that Go Daddy was one of the companies hit by Chinese-based cyber attacks in December that contributed to Google’s decision to stop self-censorship there. Representative Chris Smith, a Republican from New Jersey, praised
Google and Go Daddy at the hearing here for ‘doing the right thing in China’ and urged other US companies, specifically Microsoft, to follow their lead.
‘Google fired a shot heard ‘round the world, and now a second American company has answered the call to defend the rights of the Chinese people,’ Smith said.
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Citigroup signs up for loan modification programme
Citigroup is the latest lender to commit to the government’s programme to modify second mortgages.
The programme is part of the Obama administration’s $75 billion loan modification program aimed at helping customers stay in their homes. The second-mortgage modification program offers lenders who made ‘piggyback’ loans — second mortgages that allowed consumers to make a small or no down payment — incentives to lower payments or eliminate the loans entirely.
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UPDATE--------------MARCH 25, 2010 THURSDAY
BANGLADESH
NEWS
Support for small units to make world-class leather products
Owners of small-sized leather units will get access to formal financing without collateral under a government programme aimed at helping them to run their business viably.
The Credit-Plus Programme, the first of its kind in the country, is also designed to provide skill development training for workers and to build infrastructure and buy equipment to enable the units to make quality leather products to meet export market standards.
A Memorandum of Understanding on commissioning the Credit-Plus Programme was signed between the Janata Bank and the Leather Sector Business Promotion Council at the commerce ministry on March 18.
An amount of Tk 7 crore will be spent on the development of the sector under the memorandum which was signed by Janata Bank’s deputy managing director Mohammad Zillur Rahman and programme manager of the council Ishrat Jahan.
‘This will not only provide collateral-free loans to entrepreneurs but also help the workers to overcome poverty by providing access to better income opportunities,’ said an official of the council.
Of the allocated money, about Tk 3 crore will be distributed to entrepreneurs as loans and Tk 4 crore will be spent for equipment and infrastructure.
More than 1,100 out of about 2,000 small-scale leather units across the country are housed in unapproved buildings in Dhaka city, especially Old Dhaka and Mirpur, according to a recent survey.
These entrepreneurs have for long been producing varieties of leather products, mostly footwear, but they could not meet the standards required in the export market, according to the survey.
The Mutual Trust Bank and non-government organization Social Development Initiative had earlier financed 24 such entrepreneurs in five clusters out of 20 clusters in Dhaka city. The loan repayment rate of this project is said to be 100 per cent!
The Southeast Bank Ltd has allocated Tk 2 crore for collateral-loans which will be disbursed shortly, said officials concerned.
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EXCLUSIVE
UK seeks greater imports from Bangladesh
The UK has expressed its interest in increasing imports from Bangladesh, and also provided assurances of all-out cooperation in strengthening bilateral trade between the two countries.
UK trade and investment minister Lord Davies came up with the assurance when commerce minister Faruk Khan, who is now in London, met him at his office on Monday, according to a press release.
Bangladesh high commissioner to the UK, M Saidur Rahman Khan, and joint secretary (export) to the commerce ministry Manoj Kumar Roy were present on the occasion.
Terming the trade relationship between Bangladesh and UK as old and solid, Faruk Khan hoped that the country’s exports to the UK would increase in the current fiscal, despite the global economic recession out of which the world is starting to emerge.
The commerce minister also sought British investment in the power, gas, telecommunication and ICT sectors, and promised all-out cooperation from the government of Bangladesh in this regard.
The British Minister expressed his opinion that trade ambassador should be appointed between the two nations, and discussed the possibility of holding roundtables with the participation of the top business leaders from the two countries.
The commerce minister is in the UK on an official visit to discuss bilateral trade and investment. He is expected to return home on March 28.
In the 2008-09 fiscal, Bangladesh exported goods worth $1503 million to the UK, while importing goods worth $329.67 million. Both figures were up from the previous fiscal (2007-08), after a year of decline during the 2006-07 fiscal.
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BTCL, Teletalk in co-op deal with Warid
State owned BTCL and Teletalk will share infrastructure with Warid to reduce cost and enhance efficiency. Two memorandums of understanding among the companies have been signed in this regard on Wednesday.
Chris Tobit, the managing director of Warid said, ‘Infrastructure sharing with the two operators would facilitate Warid’s quick roll out plan under the new management.’
Recently, Bharti Airtel acquired 70 per cent stakes of Warid Telecom Bangladesh. This is the first major step by the new management to make it profitable.
‘This will significantly reduce costs and will allow the companies to provide more benefits in terms of price and service,’ said Sunil Kanti Bose, telecommunications secretary.
Md Mujibur Rahman, managing director of Teletalk said, ‘The sharing of infrastructure will allow both companies to reach out further and expand in the rural areas. This will also help the government to reach its vision 2021.’
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REHAB ELECTION 2010-11
Complaint cell headed by retired judge to be formed: Mukkarram
Jagaran, one of the two major panels contesting the REHAB elections, has pledged formation of an ‘effective’ complaint cell headed by a retired judge to deal with the complaints from the clients, should it win the polls.
The panel led by Mukkarram Husain Khan said if his panel members are elected, they would work for brightening the image of the Real Estate and Housing Association of Bangladesh which was tarnished due to malpractice by a handful of members.
‘The currently dysfunctional complaint cell will be made effective by engaging a retired judge, or an educationist, or an environmentalist, who has high level of credibility to all, as its head,’ he said an exclusive interview with New Age on Wednesday.
He added that four members from the real estate sector would be appointed in the cell to assist its chief in handling complaints lodged by the clients. ‘It can be used an arbitration process.’
Mukkarram claimed that 95 per cent of the real estate businessmen had ‘clean track records’ as they did not use fraudulent measures while dealing with the clients.
‘Only a handful of real estate companies may have been engaged in unscrupulous means and such activities have damaged severely the image of the association,’ he pointed out.
Mukkarram Hussain Khan, managing director of Capita Land Development Ltd, is being backed by ruling party lawmaker Enamul Haque, in the election to the executive committee of REHAB for 2010-11 to be held on March 27.
He said if any company is found guilty of committing fraudulence; the REHAB committee would not hesitate to take necessary actions against them to regain the lost image of the association.
When his attention was drawn to the allegations raised by the green activists that the real estate companies were responsible in many cases for degradation of environment, he said none of the real estate companies were engaged in activities detrimental to the environment.
He evaded the question if he would take any action to stop degradation of environment through earth-filling of the flood flow zones and water bodies and said, ‘We have long been urging the government to finalize the draft Detailed Area Plan of the capital city [to address this issue].’
Mukkarram expressed his views that they did not know specifically ‘which one is flood flow zone and which one is residential area or which one is commercial area’. ‘Once the land use plan is fixed, nobody will be able to construct building on water bodies or flood flow zone,’ he said.
When he was asked about the actions the REHAB would take against its members who in connivance with a section of officials of Rajdhani Unnayan Kartripakkha, manage to get design and plan passed, Mukkarram said that a technical committee would be formed with efficient manpower.
‘The committee will vet each and every application before submitting it to the Rajuk or to any other authorities concerned,’ he said. ‘The committee will reject applications for Rajuk’s approval of any plan or design if the design and plans are not made in line with the Floor Area Ratio.’
‘This process will help improve quality of applications and it will save time for approval by the Rajuk,’ he said.
He also said they would try to make the REHAB a powerful institution by ensuring its transparency and accountability and by removing ‘corruption and irregularities’ in the association.
‘We will also make a strong urge upon the government to form force such as the proposed Industrial Police to address anarchy and illegal activities in the housing sector,’ he said.
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REHAB can’t take action against its dishonest members: Bipu
Nasrul Hamid Bipu, who is leading a panel called Nabadhara in the elections of the Real Estate and Housing Association of Bangladesh’s 2010-11 executive committee, said that the organization cannot take any action against its members who resort to fraudulent measures in the real estate business.
Bipu, also an Awami League lawmaker, told New Age in an exclusive interview on Wednesday that he had asked the government to curb unscrupulous business in the real estate sector through its regulatory bodies.
The REHAB election is scheduled to be held on March 27.
Asked why his panel is promising to thwart the passage of the proposed Private Real Estate Development and Management Act 2009 if it has any provision for criminal procedures against dishonest developers, Bipu answered, ‘We want a time befitting law which will be business-friendly and at the same time ensure the rights of the consumers. It is not fair that you will give ten years of imprisonment to those who will delay the handing over of apartments while those who are mixing poison with foodstuff will go free by giving just Tk 5,000 as penalty.
‘Given the tradition of procrastination in our governance system, one out of five or six projects of a real estate company might be delayed. What will happen to the other projects if the developers are sent to jail? We do not want such an unbalanced law.
‘We of course want the unscrupulous businessmen to be punished, but it will in no way be justifiable to thwart the progress of the sector on the plea of curbing unscrupulous realtors.’
When asked whether the real estate sector would be affected if the unscrupulous developers were punished, he replied, ‘There are many laws in the country for curbing unscrupulous businessmen. They can be brought to justice under those laws.
‘You see, one won’t be able to survive in the real estate business resorting to unscrupulous means.’
Asked what action he would take against land-grabbers, Bipu said, ‘We want to omit the expression land-grabbers from the real estate sector. I will appeal to the government to provide lands for the developers so that they can arrange housing for people on the basis of the government’s new policy, the Public-Private Partnership system. Then the question of land-grabbing won’t arise.’
As he was asked what they would do against those developers who often erect buildings on wetlands or on flood flow zones, thus causing environmental degradation, Bipu replied, ‘Let the Detailed Area Plan be passed immediately. Then we will have specific guidelines for land use and thus will construct buildings according to the DAP.’
Responding to a question what kind of action the REHAB would take against those of its members who, in connivance with a section of crooked officials of the Rajdhani Unnayan Kartripakkha, get faulty designs and plans passed, Bipu said, ‘REHAB is not a regulatory body. REHAB is an association of developers, so its priority is looking after the interest of its members. In fact, it cannot take action, like cancellation of membership, against any of its members.’
He, however, admitted that REHAB can cancel the membership of any of its member companies if it violates the association’s code of conduct.
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NEWS IN FOCUS
Poultry sector can provide 50 lakh more people with jobs: Muhith
Finance minister AMA Muhith on Wednesday said that the poultry industry can play a very important role in country’s economy, as it can create extra employment opportunities for some 50 lakh people.
‘Not merely fulfilling demand of protein, the industry also created employment opportunities for around 50 lakh people… there is scope of creating employment for another 50 lakh people with the flourishing of the industry,’ he said while addressing the Agents Conference of Kazi Farms Group at Bangabandhu International Conference Centre.
Chaired by Kazi Farms Group chairman Kazi Zahedul Hasan, the function was also addressed, among others, by food and disaster management minister M Abdur Razzaque, director general of livestock services Sunil Chandra Gain, and Algis Martinez, chief veterinarian of Cobb Vantress Inc, USA.
Muhith viewed that the poultry industry is ideal for Bangladesh, as it can be developed with limited investment.
‘Unlike the Kazi Group, most of the farms are small and medium enterprises. They can run their business with limited investment and can create employment opportunities, thus enhancing the resources of the country,’ he said.
The finance minister underscored the need for bring various components under consideration to attain food security and also ensure nutritious food.
He also emphasized integrating initiative and commitment in this sector. ‘We need to bring quality in initiatives and for that we need commitment,’ he said.
Addressing the function, food minister Abdur Razzaque said there is huge potential for the poultry sector in Bangladesh as it can create massive employment opportunities particularly for the rural population.
He said the poultry farm owners in the country run their businesses under risk in the face of bird flu outbreak. ‘Their businesses need to be brought under the insurance system.’
The food minister urged the finance minister to take necessary steps to compensate the poultry farm owners who were often affected due to bird flu.
Terming food security as an important agenda of the government, he said that food production increased by 79 lakh tonnes in five years during the tenure of the AL-led government in 1996-2001.
As the production of chicken is now 40-45 lakh pieces per week against the demand of 60-65 lakh, Razzaque stressed the need for giving adequate attention to this sector.
Earlier, Kazi Farms Group directors Kazi Zahin Hasan and Kazi Zishan Hasan made separate presentations. In his presentation, Kazi Zahin showed that there is a need for importing bird flu vaccine and also to improving the culling system in all the farms across the country.
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WORLD ECONOMY
UN chief outlines steps needed to reach development targets
Investment reforms and international cooperation are among the ingredients necessary to procure the finances needed to push ahead with development in poorer countries, UN secretary-general
Ban Ki-moon said Tuesday. ‘As we meet, the world economy shows signs of recovery, yet growth remains fragile,’ Ban said at the General Assembly’s high-level dialogue on financing for development, held at the UN headquarters in New York. ‘Job losses persist. Human costs are high in all regions.’
The secretary-general underscored the need to ensure that vulnerable countries not be burdened by ‘onerous conditions or burdensome external debt.’
In his address, the secretary-general called on the international community to deliver on the development objectives of the so-called Doha round of negotiations on reducing international trade barriers, as well as to reform the current global financial system.
‘We need better mechanisms to coordinate economic policy with representative, accountable and equitable governance,’ he emphasized, welcoming the reform of the Bretton Woods institutions, which include the World Bank.
Such reforms, Ban stated, must be ‘ambitious and timely,’ as well as amplify the voice and participation of developing countries.
Investment must also promote sustainable development with many poorer nations needing assistance to shift to ‘green’ economies, he said.
A binding international agreement on climate change is essential, said the secretary-general, who has set up a high- level panel seeking to mobilize financing to help developing countries.
On the millennium development goals - eight anti-poverty targets with a 2015 deadline, he expressed optimism that accelerating progress in the remaining five years is possible.
‘We also know what it takes: the rights policies, adequate investment and international support,’ he said.
Last week, he issued a report, entitled ‘Keeping the Promise’, in which he unveiled a new action plan aimed at getting governments, civil society actors, private businesses, philanthropy and the multilateral system to act ‘efficiently, effectively and collectively.’
Also addressing the two-day gathering on Tuesday was Rebeca Grynspan, the associate administrator of the UNDP, who warned that the external finance shortfall faced by developing countries-estimated by the World Bank to be at $635 million in 2009- due to the recession threatens to roll back ‘hard fought progress’ toward the MDGs.
‘Without the ability to stimulate spending and protect social spending and the most vulnerable, the consequences of the global recession can take many years to remedy,’ she said.
The official pointed out that chronic hunger and reduced school attendance have prolonged effects on countries’ productivity. ‘Unfortunately, very often we forget that the short-term and the long-term start at the same time,’ she said.
Although official development aid has increased, very few nations have reached the target of 0.7 per cent of gross national product, while the members of the G8 are far behind meeting the pledge made in Gleneagles, Scotland in 2005 to double ODA to Africa.
Grynspan urged the international community to deliver on its commitments, emphasizing that experience has shown that the MDGs can be met, given that there are adequate resources, political responsibility and leadership at all levels.
‘To achieve the MDGs, the world must channel more financial resources to development,’ she said.
‘It is in our interest to avoid costly setbacks,’ she said.
‘We all benefit when countries have vibrant economies and educated and healthy populations that are well-governed, peaceful and able to support the fight against climate change.’
The two-day dialogue, which kicked off here on Tuesday morning, features round-table discussions on topics like the impact of the financial and economic crisis on foreign direct investment.
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Workforce in India, Brazil to grow by over 200m by 2030
The workforce of India and Brazil are expected to grow by over 200 million people in the next two decades, even as there will be huge talent crisis globally, according to the World Economic Forum.
‘Developing countries, not affected by ageing populations (the workforce of India and Brazil will grow by more than 200 million people over the next two decades), will also face huge skills gaps in some job categories due to low employability,’ a report by the WEF said.
By 2030, the developed countries would need millions of new employees to sustain their economic growth.
As per the report, prepared in collaboration with The Boston Consulting Group, the US would need as many as 26 million employees by 2030.
The report titled ‘Stimulating Economies through Fostering
Talent Mobility’ noted that if the issue of ‘unparalleled talent scarcity’ is not unaddressed, the same would put a brake on economic growth in many countries.
In most developing countries- not affected by demographic Shifts- strong economic growth and the limited employability of the workforce would lead to large skills gaps in some job categories, it added.
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Chinese demand sparks new interesting magnetite iron ore
On a sprawling west Australian cattle station, the world’s largest trucks and excavators are working overtime to dig what will become one of the biggest holes on Earth.
Sino Iron, a joint venture between Hong Kong-based City Pacific and China’s state-owned Metallurgical Group Corporation, will be Australia’s largest magnetite iron ore mine, and its first major foray into processing the oxide.
China has been mining magnetite domestically for close to 100 years but Australia, blessed with other high-quality forms of ore deposits, saw little commercial benefit.
However, a five-fold increase over 10 years in iron ore’s spot price, driven by voracious Asian demand for the basic ingredient of steel, meant magnetite was now not only viable, but vital.
‘This is basically China’s biggest single investment in a resources project in Australia,’ said Sino Iron mine manager Tim Ryan. ‘This will be the first large-scale magnetite operation in the world.’
The renewed interest will translate into an open-cast pit 5.5 kilometres (3.4 miles) long, three kilometres wide and hundreds of metres deep-providing a glut of high-grade steel for China’s increasingly affluent consumers.
Despite being a lower-grade mineral when it comes out of the ground, and more costly to produce, magnetite is more stable and of higher purity than - the main form of ore used in iron production- once crushed and processed, Ryan said.
‘We like to say you build your Porsches out of magnetite and your Toyota out of hematite,’ Ryan joked. ‘Magnetite’s a better grade.’
The top-end product, commonly used to build aircraft bodies and medical equipment, will find an enthusiastic market in the diversifying Chinese economy and its burgeoning middle class.
Mining giant BHP Billiton first explored the Sino Iron tenement in the early 1960s but wasn’t interested in magnetite, which is only 25 per cent pure when it comes out of the ground, said Ryan.
‘It just wasn’t commercially viable to mine and process magnetite, which costs about 40 per cent more than hematite to produce,’ Ryan said. ‘It was a question of economies of scale.’
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NEWS IN FOCUS
Iraq oil revenues dip despite record exports
Iraqi oil revenues dipped in February on slightly lower oil prices despite the highest level of exports in 20 years, the oil ministry said on Tuesday.
‘Revenue was $4.229 billion, based on an average price of $73.4 per barrel and exports of 57.9 million barrels,’ ministry spokesman Assem Jihad told AFP.
Iraq had revenues of $4.44 billion in January, based on oil prices of $73.97 per barrel.
Jihad said 45.2 million barrels were shipped from the southern terminal of Basra in February, while the remaining 12.7 million barrels were exported from the country’s northern fields in Kirkuk.
The oil ministry said at the beginning of March that exports in February had reached 2.069 million barrels per day, the highest level since Saddam Hussein’s invasion of Kuwait two decades ago.
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East Asia launches $120b currency swap pact
East Asian nations Wednesday officially launched a 120-billion-dollar regional currency swap agreement, giving them a safety net against future liquidity shortages.
The Chiang Mai Initiative Multilateralisation covers South Korea, China, Japan and the 10-member Association of Southeast Asian Nations.
Its successful launch shows their commitment ‘to further enhance regional capacity to safeguard against downside risks and challenges in the global economy,’ according to a joint statement issued by Seoul’s finance ministry.
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Oil prices fall
Oil prices fell in Asian trade Wednesday after nearing $82 as a private report showing weaker US energy demand dampened sentiment, analysts said.
New York’s main contract, light sweet crude for May delivery, dropped 71 cents to $81.20 a barrel.
Brent North Sea crude for May was down 60 cents to $80.10.
The American Petroleum Institute, an industry group, said late Tuesday crude stocks in the country, the world’s largest energy consumer, rose by 7.5 million barrels for the week ended March 19.
Analysts polled by Platts had forecast an increase of 1.67 million barrels.
‘The increase was much larger than expected so it was slightly bearish. I think the market is readying itself for similar numbers (later),’ said Serene Lim, a Singapore-based oil analyst with ANZ bank.
The US Department of Energy will release its weekly inventory report later Wednesday. Most analysts expect the data to show an increase in crude oil stocks of 1.4 million barrels.
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Greece debt concerns weigh on euro
The euro fell against the dollar and the yen in Asian trade on Wednesday, depressed by uncertainty over how European leaders will tackle Greece’s debt crisis, dealers said.
The euro dropped to $1.3453 in Tokyo afternoon trade from $1.3482 in New York late Tuesday. Against the yen, it slipped to 121.83 from 122.10.
The dollar was changing hands for 90.55 yen, up from 90.41 yen.
Traders were waiting for an EU summit later this week that will decide whether to launch a collective bailout for eurozone member Greece, or whether to give the International Monetary Fund the central role in granting loans.
According to a European diplomatic source, Greece’s eurozone partners were close to concluding an accord that would give the IMF the pivotal role.
Ahead of the meeting on Thursday and Friday, Germany and France have publicly clashed over the necessity of an EU bailout plan.
‘The euro is being sold by speculators in response to information on how Europe will deal with the Greece issue, for example rumours that the IMF will play a role’ in granting Athens loans, said Resona Bank dealer Masato Otsubo.
‘The euro’s weakness is likely to continue due to these speculators,’ he added.
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Developing countries paying ‘dire price’ after global crisis: UNAG
Developing countries continue to pay a ‘dire price’ after the global and economic crisis, UN General Assembly president Ali Treki said on Tuesday as he called for international efforts to be stepped up in assistance for vulnerable regions.
Convening the two-day fourth high-level meeting of the General Assembly on financing for development here at the UN Headquarters in New York, Treki deemed this window of opportunity to mobilize the necessary resources for developing countries amidst the backdrop of the economic recovery.
‘Today we have to reinforce our assistance to developing countries,’ said Treki, calling for efforts to reinvigorate the global economy in a sustainable manner.
‘Developing countries are paying a dire price after the global and economic crisis,’ he said.
Highlighting the ‘major drop’ in the flow of investments to developing countries, Treki outlined the consequences of the global economic crisis and called for multilateral achievements by the international community to address these impacts.
A reform of the international monetary and financial system is ‘paramount’ in order to ensure that those institutions can face arising challenges of the 21st century, such as globalization, Treki said.
The meeting was the fourth held by the 192-nation body since the path-breaking international conference on financing for development in Monterrey in 2002.
UN secretary-general Ban Ki-moon, senior officials from the World Bank, the International Monetary Fund, the World Trade Organization and other key relevant agencies as well as delegates from member states joined Tuesday’s plenary session.
The two-day gathering will include three multi-stakeholder roundtables, respectively delving into reform of the international monetary and financial system, the impact of the economic crisis, and development cooperation.
Participants will also engage in an informal interactive dialogue with the focus on the link between financing for development and achieving the Millennium Development Goals.
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EXCLUSIVE
Japan’s exports log fastest rise in 30 years
Japan’s exports soared at the fastest pace in about three decades last month, helping the world’s number two economy to extend a recovery from the worst recession in decades, data showed Wednesday.
Worldwide demand for Japanese cars, electronics and other goods is rebounding after collapsing during the global economic crisis which erupted in 2008.
Exports in February leapt 45.3 per cent to 5.13 trillion yen ($56 billion), the fastest year-on-year growth since April 1980, according to the finance ministry.
While exports are still about one quarter lower than their level two years ago, the picture has brightened significantly compared with February 2009, when shipments roughly halved from a year earlier.
‘Exports, the driving force of a recovery in Japanese corporate earnings, have maintained their steam,’ said Naoki Murakami, chief economist at Monex Securities.
‘The momentum in the global economic recovery is becoming stronger thanks to a US rebound since late 2009,’ which followed upturns in the Chinese and other Asian economies, Murakami wrote in a note.
Last month Japan’s trade surplus surged more than nine-fold to 651.0 billion yen ($7.2 billion) from 70.8 billion a year earlier, topping market expectations.
Shipments of automobiles more than doubled despite the safety woes of Toyota Motor, which has recalled more than eight million vehicles worldwide. Auto part exports rose 121.7 per cent while electronics components were up 69.1 per cent.
Imports increased 29.5 per cent to 4.48 trillion yen owing to higher prices of oil and nonferrous metals.
Credit Suisse economists said the latest data ‘confirm that both exports and imports have continued to recover.’
‘While we had been concerned about the negative impact of automobile recall issues, auto exports to the US increased 129.9 per cent year-on-year in February,’ they noted.
Japan’s surplus with the United States surged 173.0 per cent to 395.9 billion yen and with the European Union it rose 69.9 per cent to 165.9 billion yen.
With China, Japan’s biggest trading partner, the trade balance slipped into a deficit of 24.6 billion yen from a year-earlier surplus of 10.6 billion yen.
Japan’s exports to China grew 47.7 per cent on robust shipments of cars and parts but imports rose by a brisker 54.3 per cent due to increased purchases of clothing, audio and video devices, computers and other electronic equipment.
The Japanese economy is still relatively weak but domestic demand has been somewhat resilient helped by a recent slight upturn in wages, said Takeshi Minami, economist at Norinchukin Research Institute.
‘As long as China’s economy grows healthily, Japan will keep benefiting,’ Minami said. ‘On the other hand, China’s credit-tightening policy, if excessive, could pose risks to Japanese exports.’
Japan’s economy plunged into its most severe post-war recession in 2008, with its heavy dependence on foreign markets making it one of the worst affected by the global economic downturn.
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Eurozone moves towards IMF-led aid deal for Greece
Eurozone leaders moved to confront the Greek debt crisis with plans for a summit, only the second such gathering in their history, as divisions over a bailout for Athens shook the bloc’s unity.
Greece’s partners in the 16-nation eurozone were close to concluding an accord that would give the International Monetary Fund the central role in granting Athens loans, a European diplomatic source told AFP.
But the deal would also provide for tough sanctions for eurozone budget transgressors, in line with Germany’s priorities, the source said.
The deal, which would see eurozone nations top-up the main IMF loan, was brokered between France and Germany.
It was due to be announced Thursday morning in Brussels at a specially convened summit of eurozone leaders called by EU president Herman Van Rompuy.
It would precede the full summit of 27 EU leaders on Thursday and Friday.
Germany’s chancellor Angela Merkel has held firm all week against calls from her European Union partners for the EU to take the lead role in helping Athens.
‘The eurozone aid will only be forthcoming as a complement to IMF loans,’ the source underlined.
‘Its mixed assistance, but the IMF will play a central role,’ added the source, who also stressed the German drive for tighter rules on eurozone members’ budgetary management.
Germany wanted to ‘simplify complicated current procedures’ and allow Brussels to trigger more automatic sanctions against countries that breached commitments on annual deficits and accumulated debt, said the source.
These penalties could include the loss of voting rights at European ministerial meetings and fines, the source added.
The deal appeared to show that while Merkel had resisted pressure to let the EU pay the lion’s share of any bailout for the Greeks, she had conceded a limited European role rather than IMF intervention exclusively.
And there were signs earlier Tuesday that France too, in the face of German resistance, had stepped back from demands for full eurozone solidarity.
A French government source indicated that Paris was softening its resistance to a series of Merkel demands — on IMF involvement, on timing and on the scope of sanctions that could be introduced.
‘Different views’ in Europe will ‘doubtless come together somewhere in the middle,’ a French government source said.
German parliamentary sources said Merkel had told lawmakers that compromise in Berlin was conditional on Greece first going to the IMF.
After days of growing pressure from EU partners, the Germany daily Die Welt reported that Merkel would sign up provided eurozone countries accepted stricter rules on budgetary management.
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G-77 calls for ending Doha Round trade talks
The Group of 77 developing countries and China Tuesday called for the conclusion of the Doha Round trade talks to prevent future global financial crisis and protect development gains.
Abdullah Mohamed Alsaidi, chairman of the Group of 77, made the remarks as he was speaking at the fourth high-level dialogue of the UN General Assembly on financing for development.
‘The Group considers trade to be a vital tool to provide long- term sustainable growth,’ said Alsaidi, who is also the permanent representative of Yemen to the United Nations. ‘In this regard, we call for the conclusion of the Doha Round to prevent future crisis and secure development gains made before the crisis from erosion.’
Launched in 2001, the Doha Round of world trade talks has been deadlocked in the past eight years due to differences between developed and developing countries over access to agricultural and non-agricultural markets. A series of deadlines had been missed, which cast doubt on the latest one.
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Rio Tinto awaits verdict as China trial ends
The trial of four employees of mining giant Rio Tinto ended in China without an immediate verdict on Wednesday as Australia warned that the eyes of the world were watching the outcome.
Australian executive Stern Hu and three other Chinese staff had been in the dock in a Shanghai court since Monday on charges of accepting bribes totaling around $13 million and stealing trade secrets.
All four defendants in the highly-sensitive case pleaded guilty to taking money, and one admitted commercial espionage, defense lawyers say, although the accused have challenged aspects of the charges.
A court spokeswoman declined to say when a verdict would be issued.
During the three-day trial in China’s financial hub, the court heard evidence that millions of yuan in bribes had been stuffed into bags and boxes for the accused, according to press reports.
Australian Prime Minister Kevin Rudd said the world was watching the trial, which has been widely seen as a test of the rule of law in China and has raised questions about doing business in the world’s third-largest economy.
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Germany insists no aid for Greece as summit looms
Germany’s economy minister says his government remains opposed to paying financial aid to Greece, dampening EU officials’ hopes that a summit Thursday will agree to a rescue package and suggesting the International Monetary Fund may have to be involved.
Rainer Bruederle told daily Passauer Neue Presse Wednesday that ‘aid for Greece would be the wrong signal. We must not create a precedent that other eurozone countries can refer to in the future.’
Bruederle said ‘it cannot be possible that German taxpayers have to pick up the bill for mismanagement in Greece and elsewhere.’
The EU is split on the issue of Greek support, but a German government official said earlier this week that several EU countries now appeared to be unopposed to IMF funding a bailout.
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GM unveils electric concept car for mega-cities
General Motors unveiled a new electric concept car in China on Wednesday, aiming to burnish its image as a supplier of non-polluting cars tailored to the crowded mega-cities of the future.
GM showcased the EN-V, or ‘Electric Networked-Vehicle,’ at a pavilion that it will share with its China joint venture partner, SAIC Motor Corp, during the World Expo to be held in Shanghai from May through October.
The two-seater EN-V, which would communicate with other cars to help avoid accidents and ease traffic in congested major cities like Shanghai, is only at the conceptual stage — it would not hit showrooms for another 10 to 20 years, and would require regulatory changes for it to be allowed on roads.
But the Detroit automaker is looking to the helmet-shaped EN-V to help establish it as a significant player in cutting-edge, fuel-efficient vehicles while it seeks to reinvent itself after emerging from bankruptcy last July.
‘In the EN-V we are really showing a new concept, for not just electrified vehicles but a reinvented vehicle experience for mega cities,’ Alan Taub, GM’s vice-president for global research and development, told reporters in Shanghai.
The three versions of the EN-V, powered by electric motors, can go about 40 km (25 miles) on a single charge.
Other major automakers, including Toyota Motor Corp and Nissan Motor, have similar zero-emission mobility concepts as they look to meet higher fuel economy standards and increased consumer demand for greener models.
The focus on a compact, low-emission vehicle contrasts with GM’s struggle to find a buyer for its iconic but tarnished Hummer brand, which had become synonymous with gas-guzzling excess.
GM had agreed to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co, a little-known company based in south-western China’s Sichuan province, but the deal failed to win Chinese government approval.
The EN-V is, however, not GM’s first effort to reposition itself with more environmentally friendly models.
Its Chevrolet Volt plug-in hybrid, slated to reach showrooms in late 2010, is key to GM’s effort in the field.
GM’s choice of China to unveil the new concept model underscores the importance of China, the world’s biggest auto market, where car sales hit record highs in 2009 despite the global industry suffering a steep downturn.
China is GM’s second-largest market after the United States and a strategic battleground for all foreign automakers, with the likes of Volkswagen AG and Toyota fighting fiercely for bigger market share.
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UPDATE--------------MARCH 24, 2010
BANGLADESH
NEWS
Power, energy ministry seeks 6 more months to offload shares
Dearth of quality shares on stock market to continue
The power and energy ministry has requested the finance ministry to extend the June deadline to December for offloading shares of state-run power and energy companies, dealing a blow to the capital market’s hope for trading in more quality shares within months.
The ministry in a letter on March 18 informed the finance ministry that an expert committee would be formed to make recommendations on ‘how to make the share offloading process of power and energy companies effective, acceptable and profitable.’
The ministry in line with a decision of a power and energy ministry meeting held on February 19 requested the finance ministry to extend the deadline for offloading shares of the companies till December.
The power secretary, Abul Kalam Azad, however, on Tuesday said they had made no such request for deadline extension.
The finance minister, Abul Maal Abdul Muhith, on January 13 gave directives to the power and energy ministry to offload on the capital market up to 49 per cent of the shares of 11 companies under the power and energy ministry by June 2010. Muhith also directed other ministries to offload shares of respective companies.
The companies under Petrobangla are the Bangladesh Gas Fields Company Limited, Sylhet Gas Fields Limited, Jalalabad Gas Transmission and Distribution Systems Limited, Bakhrabad Gas Systems Limited, Pashchimanchal Gas Company Limited, Rupantarita Prakritik Gas Company Limited and Gas Transmission Company Limited.
The state-owned power sector companies are the Dhaka Electric Supply Company, Power Grid Company of Bangladesh and Rural Power Company Limited.
The finance ministry asked DESCO and the PGCB, which have already offloaded 25 per cent of their shares, to divest 15 per cent more shares.
The finance ministry also asked the Liquefied Petroleum Gas Limited, a subsidiary of the Bangladesh Petroleum Corporation, to divest 49 per cent of its shares.
Capital market experts and the Dhaka Stock Exchange are requesting the government to offload shares of state-run companies as the stock market has become overheated for lack of quality shares. The demand for shares of state-run companies on the stock market is very high because of their good fundamentals.
Petrobangla and Power Development Board officials, however, are reluctant at offloading shares of their subsidiaries claiming that such divestment would not bring about overall improvement in the crisis-stricken power and energy sectors.
Officials at the meeting on February 19 opposed direct offloading of more shares of power and energy companies saying there is no need to offload shares of gas companies as they are already making profit. ‘The companies can make fresh investments from their profits,’ said an official.
The PDB chairman, Alamgir Kabir, at the meeting also opposed the move to offload shares of the state-run power companies. He said although some DESCO shares were offloaded, there were no visible benefits for the power sector as a whole.
‘DESCO buys electricity at a lower rate, even below the generation cost, from the power board and makes profit by selling that power at higher rates. But the PDB on the other hand is a loss-making organization as it is forced to sell power at lower rate,’ he said.
A high official of a state-run power company, however, told New Age it was not right that the offloading of shares could not bring about any benefit to the sector.
‘For example, DESCO and Titas jointly rose more than Tk 1,500 crore by selling their shares. The amount can be used for power generation and gas field development. The government should give a clear direction on how the money will be used,’ he said.
Former finance adviser Mirza Azizul Islam told New Age government officials were not interested in offloading shares of state-run companies as they were getting financial benefits from the company boards.
‘After offloading government shares, there will be transparency and accountability in company activities. As a result, government company officials are not also interested in offload shares,’ he said.
The Dhaka Stock Exchange president, Rakibur Rahman, told New Age he had requested the finance minister to remove from different ministries the officials who were against the offloading of shares.
‘The share market will not be vibrant if quality shares are not offloaded. The state-run companies were asked to offload shares in 2005 but we are yet to see any significant number of shares on the market,’ he said.
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Good governance can propel growth to 8pc by 2013: Muhith
Bangladesh can attain an economic growth of 8 per cent by 2013, should there be good governance, political consensus and centralization of the government, said the finance minister, AMA Muhith.
He told a business gathering on Tuesday that the country could embark on a higher growth path by promoting all its potential sectors, especially information and communications technology.
It will further require creation of massive rural non-farm jobs to capitalize on the county’s comparative advantages and thus scale up returns from economic activities, he said.
‘A fundamental issue is good governance along with broader consensus. All these, including devolution of power to lower levels, can help achieve 8 per cent growth by the end of our tenure,’ he said at the monthly luncheon meeting of the American Chamber of Commerce in Bangladesh at Dhaka Sheraton Hotel.
Dwelling on economic outlook, Muhith expressed optimism that the Awami League-led government would be able to increase public investment to 20 per cent of overall national investment from 16 per cent and raise overall investment to 30 per cent of savings of gross domestic product from 25 per cent.
The AmCham president, Aftab ul Islam, focused on energy and investment deficiency and also suggested an accelerated reform process and making the new budgetary window of public-private partnership effective.
The finance minister, however, projected a higher than current economic growth of near 6 per cent, and termed information and communications technology a weapon to accelerate the pace of economic advancement.
‘Digital Bangladesh will be ready by 2021,’ he said referring to the launch of digital portals at district level. ‘ICT will be the second largest sector after RMG [readymade garments].’
Muhith also expressed confidence that most of the targets of the current budget would be achieved.
Aftab suggested that a mechanism should be evolved to tackle various issues, including administrative bottlenecks and complicated issues faced by different ministries.
He also recommended a specialized administrative arrangement with a legal framework to administer the projects under public-private partnership and forge a political consensus so that the projects were not abandoned with the changeover in power.
The business leader inquired about the government’s plans to make functional the Bangladesh Better Business Forum and Regulatory Reforms Commission. The finance minister admitted the delay and said something would be done in the near future.
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STOCK MARKET
SEC tightens rules to check insider trading
The Securities and Exchange Commission Tuesday tightened further some rules and regulations to check insider trading.
The commission in separate circulars restricted share trading of the people related to a listed company and margin loan facility to the management staff and relatives of merchant banks and brokerage firms.
The SEC also set the criteria for calculating the market price of securities to determine the margin requirement.
One of the new directives says that any sponsor, director, officer or employee, auditor or person associated with audit, adviser or legal adviser of any company listed with stock exchanges, or beneficial owner shall not be allowed to buy, sell or transfer or receive shares in any form of that company, two months prior to the date of completion of annual accounts.
It also directed that stockbrokers should not provide margin loan facilities to any member of the board of directors of its own company, officer and staff employed in the company management, their parent, spouse, son, daughter, sister, brother, son-in-law, daughter-in-law and other relatives.
This directive will be effective from April 1.
In another directive, the SEC said the stockbrokers should calculate the market price of portfolios/securities to determine the margin requirement in the following manner considering the closing price of the securities and net asset value.
All corporate benefit, such as dividend, bonus and rights entitled according to book closure/record date will be added with portfolio value, the commission said.
It further said if the above method could not be applied in course of valuation of government securities and open-end mutual fund securities, in that case the stockbrokers would follow objective consideration process to determine their market price.
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EXCLUSIVE
Indian RMG businesspeople shaky as buyers eye Bangladesh
Mumbai-based apparel manufacturer Rajesh Masand of late has become shaky as some of his clients have begun considering picking up shirts for the mass market from Bangladesh apparel manufacturers.
‘One cannot blame the retailers as they are getting garments 25 per cent cheaper than what Masand could offer,’ the leading daily, The Economic Times, said in an exclusive report.
In April 2008, India had allowed duty-free import of eight million pieces of garments from Bangladesh.
The country, however, is now hungry for more. It seeks deeper penetration in the Indian domestic market by flooding it with 14 million pieces annually without duties, the report said.
Although the number is too minuscule considering the mammoth Indian consumer market, it is scaring small apparel manufacturers working on similar product lines (basic formal shirts, denims and cotton trousers) as their Bangladeshi counterparts.
Masand for instance, feels the heat already and has decided to increase his volumes to arrive at an economy of scale.
He will invest about Rs 4.70 crore to increase his capacity to 45,000 units in the next three months and take his turnover to Rs 24 crore in one-and-half-years.
‘It would not come as a surprise to me if my client outsources his manufacturing to a Bangladeshi apparel manufacturer and hence, have begun an expansion process to minimize the threat,’ he says.
With the average middle class Indian spending Rs 2,500 a year on clothes, Bangladeshi apparel players are keen to corner 10 per cent of the India’s growing domestic apparel to increase their $ 10.9 billion annual garment exports by $ 2 billion.
The Economic Times further reported that a delegation comprising senior office bearers of Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Textile Mills Association visited India and requested India that Bangladesh be allowed to flood 14 million pieces annually without duties.
Chairman of the Apparel Export Promotion Council, Premal Udani who met the delegation adds, ‘Bangladesh is aggressive about its India plans. The fact that they seek deeper engagement than the existing concession for 8 million pieces indicates that they are very positive about their targets.’
It said thousands of others in the predominantly unorganized sector are however, not ready to take the onslaught. Market observers add that although the numbers do not look threatening at the moment, they could spell trouble for SME players in the Indian apparel market.
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NEWS IN FOCUS
Bangladesh to participate in Texworld
Bangladesh will participate in the upcoming Texworld USA, the biggest readymade garment fair in the United States, to be held on July 13-15 at Javits Convention Centre in New York.
The world-reputed buyers of the USA, Canada, Europe and African countries will attend the showcase, said a press release.
Texworld USA is the largest sourcing event in North America for apparel fabric buyers, product development specialists, designers, merchandisers and overseas sourcing professionals.
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Banks urged to cut interests for fisheries, livestock sector
Fisheries and livestock minister Md Abdul Latif Biswas Tuesday urged the authorities of the banks for reducing interest rates to single digit for loans to fisheries and livestock sector.
He urged them for providing loan facilities for owners of fisheries and livestock farms at the rate that is given to agriculture sector.
He made the call while exchanging views with a delegation of bankers at his secretariat office on Tuesday, an official handout said.
The meeting was organised to find ways of providing soft loans in easier terms to fishermen, marginal owners of fisheries, poultry, and dairy farms in cyclone-hit and Monga-prone areas in the country.
Secretary of fisheries and livestock ministry Md Sharful Alam, directors general of fisheries and livestock divisions, representatives of different banks and representatives of finance ministry attended the meeting.
The minister said although fisheries and livestock are sub-sectors of agriculture sector, banks is unevenly behaving with these sub-sectors.
Although the sub sectors are providing nutrition and generating employment, they, especially marginal farm owners of this sector, do not get loans as per their requirements, he said.
Banks provide loans to this field at a rate which is one to three per cent higher than those for agriculture sector, which cannot be expected, he added.
Since banks express unwillingness in sanctioning loans for this field despite maintaining fund allocations, thousands of fisheries and poultry farms are facing closure, the minister said adding due to this, no new farms are being set up.
Mentioning that there are over two lakh fishermen who catch Jatka fish and borrow money from mohajan at higher rates on condition of selling those to the borrowers at low prices, the minister requested bankers for providing loans at low rates for creating alternate employment for them.
There is a group of people who always enjoy all sorts of facilities from the government and they fetch full loan advantages from fisheries and livestock sector but marginal farm owners are deprived of loan facilities, the minister said.
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WORLD ECONOMY
Qatar ready to sell LNG to India at over $10 per unit
Qatar has agreed to supply 4 million tonnes of additional liquefied natural gas (LNG) to India, but at more than double the rate of Reliance Industries’ KG-D6 gas.
The world’s largest LNG exporter, which currently sells 7.5 million tonnes of LNG every year, is seeking a price linked to crude oil that at prevailing rates comes to over $10 per million British thermal unit.
‘The proposal is for supply of 0.3 million tonnes of LNG this year, 0.5 million tonnes in 2011, 2.5 million tonnes in 2012 and 4 million tonnes from 2013,’ petroleum secretary S
Sundareshan told reporters. ‘This is, of course, subject to price negotiations which we will enter now.’
Qatar wants to divert cargoes it had committed to the US and Europe to Asia at a better price. Qatar’s agreement with the US provides for a clause where it can divert LNG to other markets if it realizes a better price. Henry Hub price of gas, the pricing point for natural gas futures contracts in the US, is currently between $ 4 and $4.2 per mmBtu.
‘RasGas (of Qatar) and Petronet LNG/GAIL India will engage in discussions on pricing and I hope in the next few weeks they can finalize agreements,’ Qatar deputy premier and minister of energy and industry Abdullah Bin Hamad al-Attiyah, who had last night discussed the issue with petroleum, Minister Murli Deora, said.
The additional supplies would be ‘long-term, typically 15-20 years,’ he said.
Sundareshan said the supplies are being discussed for import at Petronet’s Dahej terminal in Gujarat and the yet-to-be commissioned Dabhol import facility in Maharasthra.
India is, however, skeptic of the offer as the asking price is too high. Qatar is seeking a price of 13.5-15.5 per cent of Japanese Crude Cocktail—the average price of customs-cleared crude oil imports into Japan— while New Delhi was looking for a fixed price, like the current sweetheart deal.
The price is finding some resistance in India from certain quarters that consider it ‘too high’. The rates quoted are almost the same as Petronet’s Gorgon LNG deal but they say these rates are for supplies beginning immediately while the Australian LNG would arrive in 2014.
‘Any LNG arriving at Dabhol will have to compete with Reliance Industries’ (eastern offshore KG-D6 field) gas that is priced at $4.2 per mmBtu (delivered rate of $6.67 per mmBtu),’ an official in the Petroleum Ministry said.
Compared to this, the imported cost of Qatar LNG would be $10.4 per mmBtu (at $80 a barrel oil price). After including import duty of 5 per cent, shipping cost, degasification, local levies and transportation charge, the delivered price would be $13 per mmBtu.
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Nepal to launch telecom projects to increase service coverage
Nepali government is preparing to introduce three telecom pilot projects for infrastructure sharing to increase telecommunication service coverage in rural areas.
According to Tuesday’s The Kathmandu Post daily, the plan comes at a time when telecom service operators have asked the government to introduce guidelines, for infrastructure sharing at the earliest, to speed up development in the telecommunication sector in a cost effective way.
This project which is aimed at building infrastructure enhancement and boosting telecom services through sharing will be carried out through grant assistance provided by the Asian Development Bank (ADB) under Information and Communication Technology Development Project to be completed by June 2014.
The government will spend $7 million provided by the ADB, according to Nepal Telecommunications Authority (NTA), the regulator of telecom sector.
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EXCLUSIVE
Japan’s Dai-ichi Mutual Life to float world’s biggest IPO
Japan's Dai-ichi Mutual Life Insurance Co is headed for a market capitalization of $15.5 billion after its April 1 initial public offering, the worlds biggest since Visa's in 2008.
Japan's second-biggest life insurer will be listed at the start of next month as it will be demutualised to become a joint stock company.
Facing a declining home market due to Japan's ageing and shrinking population, the company is raising funds for expansion, including in emerging Asian markets such as India, Thailand and Vietnam.
The Tokyo-based company on Tuesday set the offering price at 140,000 yen ($1,550), the middle of its previously announced tentative price range, for the 10 million shares, for a total of 1.4 trillion yen.
Of these, about 7.2 million shares will be released to retail investors, raising 1.01 trillion yen, or $11 billion, with some five million shares sold domestically and over two million overseas, the company said.
The remainder will be allotted to existing Dai-ichi policy-holders.
The IPO is set to be the world's largest since Visa's 19.7-billion-dollar offering in March 2008.
It will be Japan's biggest in more than a decade, since Nippon Telephone and Telegraph released shares in its mobile phone operator NTT DoCoMo in 1998, which came to 2.1 trillion yen.
Dai-ichi Mutual has decided to list the company, which is currently a mutual corporation owned by its eight million customers, so that it will be able to secure funds for investment in domestic and overseas operations.
'With funds obtained through the market, Dai-ichi can strengthen its health and pension insurance businesses,' said Masahiko Miwa, analyst at Moody's Japan. 'It will also be able to expand its business overseas. If Dai-ichi succeeds in taking advantage of the listing, its rivals may follow suit.'
The looming IPO has already created ripples at the Tokyo Stock Exchange, said Hirokazu Fujiki, analyst at Okasan Securities.
'Some investors have started selling their own shares to cash in for planned purchases of Dai-ichi, which may send overall prices down temporarily,' he said. 'But in the long run, the listing is expected to activate Japan's equity market and will have a positive impact on the entire Japanese economy.'
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WTO negotiators make little progress in trade talks
Scant progress has been made in talks for a global trade pact, top negotiators told World Trade Organization member states Monday, dampening hopes of a deal in the Doha Round soon.
Negotiators told senior officials meeting in Geneva to take stock of developments in the talks that ‘little progress has been made since the texts of December 2008,’ said WTO spokesman Keith Rockwell.
He was referring to the most recent set of documents used as a basis for negotiations between the 153 member states.
The inertia also meant that there was little chance that a ministerial meeting would be called soon to lend a final push for the conclusion of the round of talks launched nine years ago.
‘On the question of ministerial involvement, I do not see a big appetite in the immediate future,’ Rockwell told journalists.
He added however that countries involved were aware their current pace ‘if left unchanged will not bring us where we want to be.’
WTO chief Pascal Lamy invited senior trade representatives from member states to a five-day meeting, which began on Monday, to assess progress in negotiations.
He had warned in December that WTO member states risked missing the end 2010 target set by world leaders for the conclusion of a Doha deal unless there was a breakthrough by the end of the first quarter.
The round of negotiations for a trade liberalisation deal are primarily aimed at removing obstacles to trade for poor nations by cutting agriculture subsidies and tariffs on industrial goods.
Since they were launched in the Qatari capital Doha in November 2001, deadlines to conclude the talks have been repeatedly missed.
Discussions have been dogged by a range of disagreements, including on how much the United States and the European Union should reduce aid to their farmers and the extent to which developing countries such as India and China should lower tariffs.
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China slams Google’s bid to defy censors
The ‘Great Firewall of China’ appeared intact on Tuesday as the government lashed out at Google for refusing to bow to strict censorship in the world’s biggest internet market.
While angrily attacking Google, the authorities in Beijing said there should be no broader fallout on tense Sino-US ties provided there was no political meddling in the United States.
‘I don’t see it influencing Sino-US relations unless some people want to politicize it,’ foreign ministry spokesman Qin Gang told reporters, describing the Google situation as ‘mainly an individual commercial case’.
‘If you link this to China-US relations or politicize it, or even link it to China’s international image, this is mere overkill,’ Qin said, adding: ‘China’s market is fully open.’
Google said Monday it would no longer filter results on China-based Google.cn and was redirecting mainland Chinese users to an uncensored site in Hong Kong – effectively closing down the mainland site.
The announcement came after two months of tension sparked by Google’s revelation of coordinated cyber attacks on the Gmail accounts of Chinese dissidents. The firm had warned that it could leave the country altogether.
However, Google said it was ‘business as usual’ at its China headquarters on Tuesday, as a fierce debate erupted online between Chinese defenders of free speech and nationalist-minded netizens denouncing foreign interference.
Google spokeswoman Marsha Wang said she had no information about lay-offs or a possible transfer of staff to the US giant’s Hong Kong offices, saying only that ‘adjustments’ could be made ‘according to business demand’.
Despite Google’s promise of uncensored results, searches of politically sensitive key words generated the browser message ‘cannot display the web page’ — suggesting that China’s ‘Great Firewall’ of internet control remained erect.
The futile search results applied for terms such as ‘Falun Gong’, ‘Tibet riot’ and ‘June 4’ — referring to the pro-democracy protests in 1989 on Beijing’s Tiananmen Square.
Google’s top lawyer David Drummond said the firm hoped China would respect its decision ‘though we are well aware that it could at any time block access to our services’ and that the company would carefully monitor the situation.
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Rio trial in China moves behind closed doors
A Chinese court moved the highly sensitive trial of an Australian executive and three local employees of mining giant Rio Tinto behind closed doors on Tuesday to hear industrial espionage charges.
Stern Hu and three Chinese staff, whose trial on allegations of bribery and stealing trade secrets opened Monday, have admitted to taking money, defense lawyers say, but have contested several aspects of the charges.
The case is widely seen as a test of the rule of law in China and has raised concerns about the potential pitfalls of foreign companies doing business in the world’s third-largest economy.
China insisted Tuesday that the high-profile case was being handled in accordance with the law and that it was communicating with Australia, a key trade partner which is a major source of resources for its booming economy.
Hearings on Monday and Tuesday morning at the Shanghai court were dedicated to the bribery case but moved into a closed-door session in the afternoon, adding to questions about whether the men would get a fair trial.
‘The court declared that was the end of the proceedings related to bribery charges and that the session this afternoon would be related to the commercial secrets charges,’ said Australia’s consul general in Shanghai, Tom Connor.
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India launches Maharaja Train service
India has launched its most luxurious and expensive train service yet, seeking to attract well-heeled foreign rail enthusiasts prepared to pay the minimum $800-a-night price tag.
For most visitors, rail travel in India is an indispensable part of any holiday, although an ability to overlook the often filthy toilets and deal with basic comfort and crowded carriages is required.
The backers of the new service, which began its maiden journey from Kolkata to New Delhi on Saturday, have made every effort to ensure passengers get to see the country glide past the window with a minimum of inconvenience.
The specially built new train accommodates just 84 passengers, has suites with private bathrooms and plasma televisions, two restaurants serving Indian and Western food, a bar, card tables and an observation lounge.
‘It’s travel like royalty. You get treated like a king that’s the whole idea,’ promoter Thomas Thottathil told AFP.
Even the suspension has been designed to ensure a smooth ride on the sometimes rickety Indian lines and the 23 carriages have all been fitted with air conditioning and carpet throughout.
Prices start at $800 for the most basic deluxe cabin and rise up to $2,500 a night for the presidential suite — which occupies an entire carriage and includes two cabins with double beds and a toilet with a bathtub.
The new Express joins a fleet of other luxury trains plying India’s railway network, including the Deccan Odyssey in western Maharashtra, the Palace on Wheels in Rajasthan and the Golden Chariot in southern Karnataka.
India’s vast railway system, a legacy of British colonial rule, carries 18.5 million passengers every day in varying degrees of comfort — a basic ticket on a 24-hour journey from Kolkata to Delhi can cost as little as $10.
The advantage of the new service, say its promoters, is that the Maharajas’ Express will travel throughout India, whereas the other services are restricted to individual states.
Its first journey will be a week-long trip from Kolkata to New Delhi, via stops including the holy city of Varanasi and the Taj Mahal in Agra, but another itinerary will take it to the southwestern city of Mumbai.
One of its first passengers was Frederik Vermenlen, from the Netherlands, who has travelled across much of the world by train.
‘It’s a wonderful venture to show India in such a romantic fashion and with such modern comforts,’ he told AFP.
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NEWS IN FOCUS
Bill Gates, Toshiba in talks on small nuclear reactor
Company backed by Microsoft founder Bill Gates and Toshiba are in early talks to jointly develop a small nuclear reactor, the Japanese electronics giant said Tuesday.
The Nikkei business daily earlier reported that the two sides would team up to develop a compact next-generation reactor that can operate for up to 100 years without refueling to provide emission-free energy.
The daily said the joint development would focus on the Traveling-Wave Reactor (TWR), which consumes depleted uranium as fuel. Current light-water reactors require refueling every few years.
‘Toshiba has entered into preliminary talks with TerraPower,’ said Toshiba spokesman Keisuke Ohmori. ‘We are looking into the possibility of working together.’
Gates is the principal owner of TerraPower, an expert team based in the US state of Washington that is investigating ways to improve emission-free energy supply using small nuclear reactors.
Unlike the current reactors at mega power plants, the smaller types could be introduced by cities or states or in developing countries more easily.
Ohmori said Gates, together with other TerraPower executives, had visited a Toshiba laboratory for nuclear power research near Tokyo last year.
‘TerraPower is developing a small nuclear reactor and Toshiba is developing a different kind of small reactor. They were interested in Toshiba’s technology and aiming at practical realization’ of small reactors, he said.
Ohmori said the two sides had just begun to ‘exchange information’ but stressed that ‘nothing concrete has been decided on development or investment.’
Gates is expected to use his personal wealth to back the development of TWRs and his investment could reach several billion dollars, the Nikkei said.
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Greek crisis may hit US economy: Fed regional chief
The Greek debt crisis may directly affect the US economy by hitting American exports and the financial system, Atlanta Federal Reserve regional chief Dennis Lockhart warned Monday.
He said adjustments across the European Union to fiscal problems resulting from the Greek crisis could dampen eurozone growth and constrain US exports to that region.
The crisis could also lead to currency flows from the euro into ‘safe-haven’ US dollar assets, causing an appreciation of the greenback and hurting American export competitiveness, Lockhart said.
The European Union as a whole is the largest export market for the United States.
In addition, Lockhart said, the possibility that the Greek fiscal crisis might lead to a broad shock to financial markets ‘could play out in the banking system or in the form of a general retreat from sovereign debt.’
‘The Greek crisis might directly affect the US economy,’ warned Lockhart, the first US central bank official to clearly express such concerns.
He said that the possibilities he cited had not been factored into his outlook so far.
‘But developments around the Greek situation deserve rapt attention,’ he said.
The 16-nation eurozone is enduring the worst crisis in its history amid spiraling government debt levels, anaemic economic growth rates and rising social protest against austerity measures and high unemployment and the company were present on the occasion.
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BANGLADESH
NEWS
Dhaka, Delhi to allow cargo vehicles along border on May 1
Bangladesh and India are set to allow movement of cargo vehicles at land customs stations along the border from May 1 to accelerate bilateral trade and reduce the hassles and costs involved, according to the foreign affairs ministry.
Shipping and commerce ministry officials said Dhaka and New Delhi would now frame a ‘standard operating procedure’ as a legal framework to ease restrictions on vehicles in crossing the border to facilitate higher, hassle-free trade.
The foreign ministry, in a letter sent to the Indian high commission in Dhaka on March 21, requested the Indian authorities to provide a draft of the standard operating procedure to begin movement of cargo vehicles on the stipulated date.
There is now no formal agreement or protocol on standard practice between the two countries to allow cargo vehicles including trucks to go beyond no man’s land.
Customs officials also said Bangladesh informally allows Indian trucks to enter 300 metres into Bangladesh but India does not give a similar facility to Bangladeshi vehicles.
At least 1,200 trucks from the two sides of the border load and unload goods and commodities at the land customs stations every working day, they said.
‘Restrictions on the movement of cargo vehicles and absence of proper arrangement to allow access of goods trucks into each other’s territory slow down trade and add costs. If the two countries can reach an agreement on a standard procedure, it will be more helpful for Bangladesh,’ a commerce ministry official told New Age on Monday.
The two countries decided to relax the restrictions on the movement of cargo vehicles along the border in keeping with the spirit of the prime ministers of the two countries during the visit of the Bangladesh Prime Minister, Sheikh Hasina, to India in January.
New Delhi agreed to share the draft standard operating procedure for the movement of cargo vehicles along the Bangladesh-India border to adopt the procedure on May 1, the foreign ministry letter said. Copies of the letter have been sent to the commerce and the shipping ministry and the National Board of Revenue to take follow-up steps, the officials concerned said.
The major portion of the two-way trade amounting to almost $4 billion a year is transacted through 25 land customs stations now.
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BB launches road show campaign
Bangladesh Bank on Friday launched a road show campaign styled ‘Unnayaner Abhijatra-Teknaf to Tentulia’ involving a convoy of 40 vehicles to spread financial literacy and combat money laundering.
The week-long road show was launched by Bangladesh Bank governor Atiur Rahman from Teknaf Girls School in Teknaf, the southernmost resort town of the country. It will end at Tentulia, the northernmost tip of the country, on April 2.
The road show is being organised with the assistance of the country’s private commercial banks to campaign for financing small and medium enterprises and encouraging people to send remittances through legal channels.
The central bank governor hoped the road show would help spread financial literacy among the people.
He said the road show would teach the countrymen how to get agriculture loans and loans for small and medium enterprises easily. ‘Countries like India, Sri Lanka, United States and Canada undertake such programmes to educate the people about financing and risk management in investment.
‘Once financial literacy rate is increased, lifestyles of the people would improve,’ Atiqur Rahman hoped.
He said the central bank’s decision to allow farmers to open a bank account with only Taka 10 will enable everyone to have a bank account soon.
‘There is no alternative to upgrading the living standard of the farmers as the country’s agricultural productivity rate ranks second to China in the world with its 22 per cent contribution to the country’s GDP,’ he said.
He also said the central bank wanted to ensure inclusive banking for all so that people from even remote areas could make transactions through normal channels.
Murshid Kuli Khan, deputy governor of Bangladesh Bank, Kaiser A Chowdhury, managing director of AB Bank, Aftabul Alam, chairman of SME Foundation, and local lawmaker Abdur Rahman Badi were present at the inaugural ceremony.
Aftabul Alam said the central bank has initiated a programme of disbursing a loan of Tk 24,000 crore to small and medium entrepreneurs across the country. ‘Once the programme is implemented, it will change the socio-economic condition of the countrymen.’
As part of the programme, the central bank will organize rallies and discussions at 13 points, including Teknaf, Cox’s Bazar, Chittagong, Feni, Comilla, Tangail, Sirajganj, Bogra, Rangpur, Dinajpur, Thakurgaon, Panchagarh and Tentulia.
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STOCK MARKET
Dhaka stocks pass volatile week
A volatile week for the capital market saw Dhaka stock’s benchmark index start the week with the second highest single-day gain in the bourse’s history, only to fall again steeply.
Dhaka Stock Exchange’s benchmark, the general index, opened the week at 5,408.66 points and closed at 5,617.93, rising by 3.87 per cent, or 209 points, over the week.
Of the five trading days, the bourse was up on the first two days followed by a slump on Tuesday due to investors’ panic selling over a directive of the regulator.
The market bounced back on Wednesday but ended slightly lower on Thursday.
The week’s first trading session on Sunday saw the DGEN surging by 2.58 per cent mainly due to a hefty rise in Grameenphone as its dividend declaration lifted investors’ morale.
The index rose by 139 points—the second highest gain since January 25 this year when it gained 155 points.
GP, which makes up nearly a fifth of Dhaka stock’s market capitalization, climbed 8.75 per cent on the day to Tk 341.80 after its board recommended a 60-per cent dividend.
Brokerage house officials said retail investors bought GP shares heavily although the company was trading at the spot market where stocks can be bought only with cash.
Market analysts said smooth DSE polls and the market regulator easing credit facilities boosted investors’ confidence.
Banking sector, the bellwether of the market, declined marginally by 0.22 per cent while the non-banking financial institutions edged up 0.87 per cent.
The pharmaceuticals gained 1.99 per cent, insurers 1.37 per cent and cement 1.07 per cent.
Mutual funds dropped by 0.85 per cent and energy by 0.02 per cent.
Daily turnover amounted to Tk 9.75 billion — an increase of 8.5 per cent over the previous session’s Tk 8.97 billion.
Market players, however, questioned the sustainability of the gain.
‘The market is still overheated and might dive once the hype over GP dividend is over’, a senior official of a merchant bank told the news agency.
On Monday, the daily turnover hit a one month high, crossing the Tk 10 billion mark for the first time since February 24.
In a volatile market, the index hit the highest level at 5,580.17 due to a hike in banks but dropped to 5,548.22 after GP declined nearly one per cent.
On Tuesday, the market fell by almost one per cent amid volatile trading, as the investors reacted negatively to a new directive of the Securities and Exchange Commission.
A group of investors demonstrated in front of the SEC office after trading hours and DSE building during the session demanding withdrawal of the directive.
The SEC’s clarification cooled down the investors as on Wednesday the stock’s hit a three-week high.
‘Some of the investors decided to ‘wait and see’, leading to the turnover shrinking drastically,’ an official of Latif Securities told the news agency.
Total turnover stood at Tk 8.96 billion, down 18.68 per cent from Tuesday’s Tk 11.03 billion.
Meanwhile, the daily average turnover of the week also rose by 36.11 per cent to Tk 9.73 billion from last week’s average of Tk 7.14 billion.
GP, Beximco, Beximco Pharmaceuticals, Bextex and Summit Power were the week’s turnover leaders.
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Home-based woman entrepreneurs demand more access to market
Less access to market and lack of adequate capital are the main hurdles for the home-based women entrepreneurs in Khulna.
Under the umbrella of different cooperative organizations in different areas of the region, they are producing different household products.
‘With our small capital, we are producing handicrafts, sewing goods, clothes, pillow covers, bed covers and bed sheets and other items in our houses,’ said Taslima Choudhury, 28, of Khan A Sabur Road in the Khulna city.
She said their scope for exhibiting and selling their goods was limited, and that was why they were failing to flourish despite their immense potential.
Another home-based entrepreneur Sandhya Rani Biswas, 38, of CNB Colony in the city said they would be able to produce more products, if they were given assistance by the Khulna Chamber of Commerce and Industry and the upazila and district administrations.
‘If the KCCI allocates to us at least one stall at the international trade fair held in Khulna every year free of cost, we will be able to exhibit our products in the fair and thus our products may draw the attention of the international buyers,’ Sandhya said.
Mahira Khatun Popy, secretary of the Udyom Home-based women entrepreneurs’ federation in Khulna, said they had appealed to the KCCI president and the Khulna deputy commissioner for a stall at in the upcoming Khulna International Trade Fair 2010 which will begin in the city on April 1.
The federation was formed with 40 home-based women entrepreneurs’ cooperative organizations, each with 20 members, with the help of a non-governmental organization under their home-based entrepreneurship development programme in Paikgachha, Batiyaghata and Phultala upazilas in Khulna and all the five thana areas of the Khulna city, she said
She also said the organization was marketing and exhibiting their products through four outlets — one each in Paikgachha, Batiyaghata and Phultala upazilas and one in the Khulna city.
The Khulna deputy commissioner, NM Zeaul Alam, talking to New Age, said the administration was always in favour of the home-based women entrepreneurs and added that he had already recommended the KCCI to allocate a stall to the home-based women entrepreneurs.
The KCCI president, Saharuzzaman Mortuza, told New Age that the chamber was always keen to encourage and assist woman entrepreneurs and added that they would try to allocate a stall to them in the upcoming international trade fair.
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WORLD ECONOMY
2nd round of BA strikes to begin
British Airways is bracing for a second round of strikes, to last four days starting at midnight, as its chief executive is accused of trying to break the union.
Cabin crews are striking over pay and changes to working conditions.
Earlier this week, the airline withdrew valuable travel perks from crew members who walked off the job, saying they were non-contractual. The Unite union says any deal would have to include the restoration of those privileges.
In a letter to the Guardian newspaper, 95 British academics say that CEO Willie Walsh’s actions ‘notwithstanding his protestations to the contrary, are explicable only by the desire to break the union which represents the cabin crew.’
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EXCLUSIVE
‘World trade to grow 9.5pc’
World trade is expected to grow 9.5 per cent in 2010, after suffering its biggest collapse since World War II in 2009, the head of the World Trade Organization Pascal Lamy said on Friday.
‘Our economists are forecasting a world trade growth for 2010 of 9.5 per cent with developing countries’ trade growing 11 per cent and industrialized countries’ trade growing by 7.5 per cent,’ the WTO director-general said.
‘This means that trade-wise, there is light at the end of the tunnel and it’s certainly good forecast, good news for the world economy,’ he added.
World trade plunged 12 per cent in 2009 due to the global economic crisis.
Patrick Low, chief economist at the WTO, noted that the projected growth of 9.5 per cent this year would need to be repeated in 2011 in order for the global economy to recover to peak trade levels reached in 2008 before the crisis struck.
‘If you need to do it in one year, you’ll need 14 per cent,’ he added.
Amid the slump in world trade last year, China overtook Germany to become the world’s top exporter with some $1.20 trillion worth of merchandise exported in 2009, according to WTO data.
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BANGLADESH
NEWS
Cox’s Bazar airport to go modern by 2012
The age-old Cox’s Bazar airport will go modern by 2012, civil aviation sources said on Friday, disclosing that the construction work is likely to be started at the end of this year with an initial cost of Tk 302 crore.
‘The project has already been approved by the ECNEC, while the selection of the construction firm is almost on the final stage,’ manager of the airport Mahmud Akhter told the news agency over phone in the tourist city.
Mahmud said a new terminal building will be build under the second phase of the project, which has also a provision to expand the runway to 9,000 feet from existing 6,775 feet and widen the runway to 200 feet from current 150 feet.
‘Once built, the airport will be able to accommodate wide-bodied aircrafts,’ Mahmud said, adding the modernization of the airport has been spelt out and expedited by Prime Minister Sheikh Hasina.
Mayor of Cox’s Bazar Sarwar Kamal said reshaping the airport was a long demand from the people of greater Cox’s Bazar and tourists from other parts of the country and beyond.
He said the poor condition of the existing airport has been adversely impacting the growth of tourism in the area as both airliners and travelers seldom find the airport convenient for them.
Built during the Second World War, the Cox’s Bazar airport now cater for small aircrafts from the capital, Dhaka.
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WORLD ECONOMY
EU seals Greek rescue deal
European leaders clinched a deal to rescue Greece from its debt crisis, with a standby package of loans backed by the International Monetary Fund halting the euro's slide on Friday.
The historic pact- which re-writes the eurozone rule-book for all-was designed to 'reassure all holders of Greek bonds' that European partners 'will never abandon Greece,' according to European Union president Herman Van Rompuy at a European Union summit in Brussels.
The EU figurehead said all 16 eurozone nations, including Greece, had committed to 'participate,' which was also designed send a message to speculators not to simply switch their attentions from Greece to a new target in trouble, whether Portugal, Spain or Ireland.
More broadly, leaders further agreed on the need for stronger 'economic governance' in Europe with strengthened penalties for countries that consistently breach the EU rules.
In early London deals on Friday, the currency pulled away from 10-month lows against the dollar, up from $1.3277 in New York late on Thursday.
'I would have been surprised if the euro had not gone in that direction,' said Luxembourg Prime Minister Jean-Claude Juncker as he arrived for the second day of the summit.
However, Credit Agricole analyst Mitul Kotecha warned that criticism of the IMF's involvement by European Central Bank chief Jean-Claude Trichet, although he later fell into line, 'has kept the euro under pressure.'
Trichet was on the back foot in Brussels, having cautioned beforehand against 'all signs of a lack of responsibility' for the eurozone, which he considered would be 'obviously very, very bad.'
Kotecha underlined: 'The damage was already done and any relief to euro-dollar (exchange rates) will be short-lived.'
After months spent warily sizing up the threat, Greek Prime Minister George Papandreou insisted that both 'Europe and Greece will emerge stronger from this crisis.'
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EU, US move to allow foreign ownership of airlines
The European Union and the United States on Thursday took a 'major step forward' in aviation liberalisation, paving the way for foreign ownership of their airlines after lengthy talks, Brussels said.
However the International Air Transport Association said the results of the deal were disappointing as they did not go far enough on the sensitive issue of EU and US airlines owning controlling stakes in each other.
Under the draft deal to move towards EU-US 'open skies' in the airline industry, European airlines would be able to take majority stakes in US companies, and eventually, US firms would be able to reciprocate.
But the accord calls for legislative changes both in European nations and the United States, and needs to be signed off by the US congress, an uncertain and lengthy prospect.
'Both sides have agreed to increase regulatory co-operation, and remove the barriers to market access that have been holding back the development of the world's most important aviation markets,' EU transport commissioner Siim Kallas said in a statement hailing the deal.
The draft accord represents 'a significant breakthrough in the process of normalizing the global airline industry,' the statement added.
'The new agreement affirms that the terms of the 2007 agreement will remain in place indefinitely,' a US department of state spokesman said in a statement.
The 2007 deal, which took four years to thrash out and went into effect early 2008, eliminated air service restrictions between the United States and Europe, allowing airlines from both sides to select routes and destinations based on consumer demand for both passenger and cargo services.
The new accord 'deepens US-EU cooperation in aviation security, safety, competition, and ease of travel,' the US department of state spokesman said.
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UPDATE---------------MARCH 26, 2010 FRIDAY
BANGLADESH
EXCLUSIVE
FDI nosedives in first half of this fiscal year
Inflation and unemployment will soar, say experts
Foreign direct investment has nosedived in the first six months of this fiscal year as the government has failed to arrest the worsening power and energy situation, said Bangladesh Bank officials and the investors.
The Bangladesh Bank’s monthly update revealed that the country received FDI of only $197 million in the July-December period of the 2009-10 fiscal year.
But the country received FDI worth $603 million in the same period of the last fiscal year, which means that the inflow of investment has declined by a whopping 64 per cent, added the central bank’s monthly update.
The major reason for such alarming fall in FDI has been attributed to the shortage of gas and electricity which has become critical in the last few months.
The director-general of the Bangladesh Institute of Development Studies, MK Mujeri, observed that lack of investment could destabilize the macro-economic situation and push up the rate of inflation which is now hovering at around 9 per cent.
Not only FDI, but also many investment plans by the locals have been suspended because of power and energy shortage. The business chambers, which are extremely worried at the present situation, have already warned the government that the scope of employment generation will be affected adversely because of falling investment in a country where the rate of unemployment is very high.
Some 2.7 million young people are becoming eligible for jobs every passing year, but the country can absorb only 0.7 million of them.
The Metropolitan Chamber of Commerce and Industry, the country’s oldest business body, in its quarterly review last December pointed out that the poor investment scenario could jeopardize employment generation scope.
It stated that the rate of unemployment was already soaring because of lack of investment.
Apparel industry leaders last week demanded steady supply of power and gas to ensure uninterrupted production in factories of the country’s largest export sector that accounted for nearly 80 per cent of the country’s overall export earnings of $15.4 billion in the 2008-09 fiscal year and employs more than 3 million workers, mostly women.
Leaders of the Bangladesh Garments Manufacturers and Exporters Association voiced the demand while meeting the prime minister’s energy adviser, Tawfik-e-Elahi Chowdhury, and state minister for power, Enamul Huq, at the secretariat on Tuesday.
The demand for gas in the country is 2,250 million cubic feet daily against the production of 1,960 to 1,980 million cubic feet, while power production is 3,600-3,800 megawatt daily against the demand for 5,000 to 5,500 megawatts.
‘The situation in the readymade garments industries is not good because of the prevailing gas and power crisis. The supply has to be ensured by giving top priority to the industry,’ said BGMEA’s President Abdus Salam Murshedy.
The Bangladesh Knitwear Manufacturers and Exporters Association’s president, Fazlul Haque, observed that the future of the country’s main export sector was being endangered by inadequate supply of gas and power.
Shortage of the two vital fuels of development has halted regular production in a number of export-oriented factories in Dhaka, Chittagong, Gazipur, Savar and Narayanganj, he added.
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NEWS
Anti-money laundering roadshow starts today
The Teknaf-Tetulia roadshow aimed mainly at raising awareness against money laundering starts today in Cox’s Bazar.
Governor of Bangladesh Bank Atiur Rahman is expected to inaugurate the eight-day roadshow on the premises of Teknaf branch of AB Bank Friday morning.
Bangladesh Bank, in cooperation with 37 other banks and the Small and Medium Enterprise Foundation, is organizing the roadshow.
The theme of the roadshow is resisting money laundering and Hundi, promotion of transferring money through legal channels, and creating awareness on SME financing and agriculture loans.
During the roadshow from Teknaf in the south to Tetulia in the north, various programmes along with banking and SME fairs will be held in 13 districts.
All participating banks along with the SME Foundation will be organizing individual stalls in the fairs with the objective of creating awareness on anti-money laundering, sending money through legal channels, SME loans and financing, and Agriculture loans.
The programmes include cultural evening on the premises of NCC Bank Cox’s Bazar branch from 5:00pm to 8:30pm today, view exchange meetings on the premises of National Bank Chittagong branch from 4:00pm to 6:30pm on Saturday, Dhaka Bank Feni branch from 10:30am to 1:00pm on Sunday, Prime Bank Comilla branch from 4:30pm to 7:00pm on Sunday, Bangladesh Krishi Bank Tangail branch from 10:30am to 1:00pm on Tuesday, One Bank Sirajganj branch from 5:00pm to 7:30pm on Tuesday, Standard chartered Bank Bogra branch from 10:30am to 1:00pm on Wednesday, Sonali Bank Rangpur branch from 5:00pm to 7:30pm on Wednesday, Jamuna Bank Dinajpur branch from 10:30am to 1:00pm on Thursday, Uttara Bank Thakurgaon branch from 4:30pm to 7:00pm on Thursday and Islami Bank Bangladesh Ltd Panchagarh branch from 10:00am to 12:30pm on Friday.
The road show will conclude with a function starting at 4:30pm on April 2 on the premises of the Tetulia branch of Brac Bank.
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Offload SoE’s shares to boost capital market: DSE president
Dhaka Stock Exchange president Md Rakibur Rahman has urged the government to offload shares of 26 state-owned enterprises as soon as possible, to increase the supply of shares in the stock market.
He also urged small investors to buy shares of companies with sound fundamentals, rather than ‘overheated’ shares in companies.
The DSE president appealed to the finance minister to remove officials at these SoEs who are not willing to offload their companies’ shares.
‘Put honest and efficient officials in charge. I hope the companies will be able to offload their shares within six months,’ he said while addressing a press conference marking the first anniversary of the present board of directors of the DSE at a Dhaka hotel on Thursday.
The DSE president urged companies to raise capital from the market issuing initial public offerings through the book building method. RAK Ceramics Bangladesh Limited has already fixed their share price through book building method.
Rakibur Rahman also urged the National Board of Revenue not to do anything that could affect investors, to the point of forcing them to even leave the market. ‘NBR could enrich the capital market by issuing preferential shares through bonds.’
Rahman said that the capital market was making a good contribution to GDP, as market capitalization as a percentage of GDP is currently 38.38 per cent, whereas it was only 18.44 per cent one year back.
Besides, the number of BO accounts also increased heavily, reaching 22,12,830 on February 28, 2010 compared to 14, 67,467 on February 28, 2009.
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Digitized money transfer system in post offices soon
The postal department is introducing ‘electronic money order’, ‘mobile money order’ and ‘postal cash card’ services for its customers to help avoid the risk of carrying cash and transfer money within an hour even to remote areas.
Under the existing system, it takes 7 to 10 days to transfer money to remote areas.
Prime Minister Sheikh Hasina is expected to inaugurate the services today from the Ganabhaban, a postal department source said.
Customers using PCC can go for cash transaction and payment of all sorts of utility bills through ATM and point of sale, said post and telecommunications secretary Sunil Kanti Bose., ‘It is part of the initiatives taken by the postal department to build a ‘digital Bangladesh’’ he told BSS.
The director general of postal department Mobasser-ur-Rahman said virtual private network server has been set up on the second floor of GPO Bhaban to conduct the service.
Five hundred post offices in the district towns would be brought under the network in the first phase, he said, while 1650 sub-post offices would be brought in the second phase and 8,500 post offices in the third.
The whole country is expected to be brought under the system between June and December.
Under the system, a customer will be able to buy ATM or PCC for any amount from any post office. Charging the card with the PoS machine, he will be able to withdraw the necessary amount. The postmaster of the post office concerned would be bound to pay the customer the required amount.
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Biman flights to depart one hour in advance from scheduled time
In view of the decision of not effecting the change in daylight saving time from April 1, the Biman flights both in domestic and international routes will now be departing one hour in advance from the pre-scheduled time.
Passengers already re-confirmed their tickets by March 24 for journey on and after April 1 will have to report to the airport one hour in advance accordingly, said a release of Biman Bangladesh Airlines.
For further information or for any queries, passengers have been requested to contact nearest Biman sales office for their convenience.
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Danish business team to visit Bangladesh April 9
A delegation of 12 Danish companies will arrive in Dhaka on April 9 on a five day visit to explore opportunities for business cooperation with Bangladeshi companies in the energy and environment sectors.
The Danish companies are mostly active in conventional energy, renewable energy and waste and water management. One of the companies is active in metal waste (tin and steel) handling, said a Denmark embassy release.
The objective of the visit is to introduce Danish companies to relevant national companies in order to explore possibilities for setting up long-term cooperation/joint venture between companies from Denmark and Bangladesh.
The embassy of Denmark is looking for potential relevant Bangladeshi companies for planning pre-fixed meetings for the Danish companies.
Bangladeshi companies interested in meeting the Danish companies have been asked to contact embassy’s business section on phone at 8822499.
‘In a response to Bangladesh Government’s initiative for attracting foreign investment in the energy and power sector, the embassy of Denmark has invited Danish companies active in energy and green technology to visit Bangladesh to assess and explore opportunities for investments and business cooperation in Bangladesh’, says the Danish ambassador Einar H Jensen.
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WORLD ECONOMY
Dubai offers $9.5b in new aid to struggling firm
Dubai’s government said Thursday it will pump up to $9.5 billion into Dubai World as part of a long-awaited restructuring plan to rescue its chief conglomerate from a crippling debt crisis that undermined investor confidence in the one-time Arab boomtown.
The proposal, which still needs approval from creditors, comes after months of talks following Dubai World’s bombshell announcement in November that is would seek delays in repaying $26 billion in debt until at least May. The conglomerate’s woes came to symbolize Dubai’s boom to bust as the global meltdown dried up the cheap credit on which the glitzy city-state had depended to fuel its meteoric growth.
Sheik Ahmed bin Saeed Al Maktoum, the chairman of Dubai’s supreme fiscal committee said in a statement that the support aims to ensure Dubai World and property development arm Nakheel ‘are key contributors to the strong economic future of the Emirate of Dubai and the wider United Arab Emirates.’
Sheik Ahmed, who is also the uncle of Dubai’s ruler, says the new funding includes $5.7 billion of the money remaining from a bailout by neighboring Abu Dhabi and ‘internal Dubai Government resources.’
The plan offers creditors full repayment on the principal of their outstanding loans over a five to eight year period by issuing new debt. It was not clear how much interest, if any, is being offered, but Dubai World’s chief restructuring officer said Thursday the debt would not be backed by the Dubai government.
Investors in Dubai welcomed the news. Shares on the city-state’s main stock exchange, the Dubai Financial Market, shot up 4.9 per cent in early trading. Shares of DP World, Dubai World’s publicly traded port operator, rallied over 4 per cent to trade at 50 cents apiece on the Nasdaq Dubai, another exchange in the emirate. Other Gulf markets also posted gains, reflecting investors’ relief over concerns Dubai’s debt woes could harm its neighbors.
‘This is a very positive announcement and the markets are reacting accordingly,’ said Mohammed Shakeel, an Abu Dhabi-based independent economist. ‘Dubai is essentially saying that it is through the worst.’
Dubai has received $20 billion in emergency funds from its oil-rich neighbor Abu Dhabi, which is also the capital of the United Arab Emirates, a seven-state federation of which Dubai is part. Abu Dhabi holds nearly all the UAE’s oil wealth.
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Eurozone fears loom over Asian markets
Deepening fears that a sovereign debt crisis may engulf the eurozone rattled Asian markets Thursday, with shares mixed across the region following a weak lead from Wall Street.
Concerns that the Greek financial crisis could be spreading were heightened after Portugal was hit by a credit downgrade and Spain faced mounting criticism of its budget plans Wednesday.
EU leaders meanwhile struggled to agree on what to do about Athens’ woes ahead of a critical summit starting Thursday, with officials foreseeing an unprecedented intervention by the IMF.
‘The downgrade of Portugal highlights the fact that European sovereign debt problems haven’t been resolved and could possibly be systemic,’ Macquarie Private Wealth associate director Marcus Droga told Dow Jones Newswires.
The deputy governor of the People’s Bank of China also raised concerns by referring to Greece’s debt crisis as ‘a tip of the iceberg,’ aggravating markets enough to send the euro to a 10-month low against the dollar.
The ‘main concern today obviously is Spain and Italy’, said Zhu Min in a speech in Hong Kong. The single currency dropped below $1.33 for the first time since May 7 last year, falling to an intraday $1.3283.
Sentiment in Asia was mixed with some markets showing more seasonal resilience than others nearing the end of the quarter.
Hong Kong closed down 1.10 per cent or 230.07 points to 20,778.55 while Sydney shed 0.12 per cent or 6.1 points to end at 4,885.4.
‘Once again, these sovereign debt concerns have reared their ugly head,’ said IG Markets analyst Ben Potter.
Shanghai dropped 1.23 per cent, or 37.63 points to 3,019.18 weighed by profit-taking in banks on fears that many could be saddled with bad loans, dealers said. Bank of China fell 1.4 per cent while ICBC edged down 0.2 per cent.
However, Tokyo edged 0.13 per cent higher, gaining 13.82 points to 10,828.85 with exporters boosted by a weaker yen, raising expectations for repatriated earnings. Honda rose 1.2 per cent and machinery maker Fanuc added 4.0 per cent.
The greenback had risen to as high as 92.24 yen in New York Wednesday afternoon but stood at 91.80 yen in Tokyo due to profit-taking.
On Wednesday, Fitch Ratings downgraded Portugal’s credit rating by one notch and issued a negative outlook for it, further denting investors’ appetite for risk as Greece’s debt woes continued to roil markets.
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NEWS IN FOCUS
Oil extends losses
Oil prices extended losses in Asian trade Thursday on US demand worries after a government inventory report showed a surge in crude stocks in the world’s largest energy consumer, analysts said.
New York’s main contract, light sweet crude for May delivery, dropped 20 cents to $80.41 a barrel. The contract had shed $1.30 Wednesday. Brent North Sea crude for May was down 24 cents to $79.38 a barrel.
The US Department of Energy said in its weekly inventory report Wednesday crude oil inventories rose 7.2 million barrels last week, confounding expectations of an increase of 1.7 million barrels.
‘Primarily, the market is responding to the report which showed a very substantial increase in crude oil inventory over the past week,’ said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
Oil was also under pressure from ‘the continued volatility of the US dollar versus the euro’ amid heightened fears over the debt crisis engulfing Greece and Portugal that has sent the euro dipping lower this week, said Shum.
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Gulf States urged to coordinate for financial stability
Gulf central bank chiefs on Wednesday wrapped up a one-day meeting on financial stability in the face of the global economic downturn and progress on regional monetary union.
Monetary officials of the six-nation Gulf Cooperation Council states also reviewed plans to establish monetary union and launch a single currency.
‘The GCC monetary council will meet at the end of the month to approve plans and the time-frame to complete the necessary financial infrastructure,’ Kuwait central bank governor Sheikh Salem Abdulaziz al-Sabah told a news conference.
‘There are certain legislative and financial measures that have not been completed’ for the monetary union, Sheikh Salem said.
In December, the GCC summit in Kuwait approved a monetary union pact which calls for the establishment of the monetary council.
The council, to be based in Riyadh, will develop in the future into the GCC central bank to be hosted in the Saudi capital. The bank will be charged with issuing the GCC single currency.
Bahrain, Kuwait, Qatar and Saudi Arabia have ratified the monetary union pact while the other two members—Oman and the United Arab Emirates—have opted out.
The UAE, the Gulf’s second largest economy, withdrew over the choice of Riyadh as the base for the future central bank. Oman pulled out saying it could not meet the union’s prerequisites.
On Wednesday Sheikh Salem and UAE central bank governor Sultan al-Suweidi denied that mediation is under way to bring the UAE back into the monetary union fold.
He said that it was premature to say whether the single currency will be pegged to the dollar or to a basket of currencies, adding that this will be decided later.
Sheikh Salem said he does not think that the global financial crisis has slowed the GCC monetary union process.
Earlier, he called for more coordination between GCC states to achieve financial stability.
‘This period necessarily requires that our attention is focused on issues related to achieving financial stability,’ Sheikh Salem said in his opening speech.
‘Inflationary pressures have greatly declined, but this does not mean they have disappeared... This has enabled Gulf central banks to adopt measures to face the impacts of the global financial crisis’ and of slow growth, he said.
Sheikh Salem also called on supervisory and monitoring agencies in GCC states to adopt ‘early-warning systems to boost their ability’ to deal with future financial crises.
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Germany insists on IMF rescue ahead of EU summit
Chancellor Angela Merkel stuck to her hard-line position on Greece ahead of a crunch EU summit starting Thursday, saying she refused to violate ‘the trust’ of the German people in the euro.
‘The German government will press for emergency aid combining IMF and joint bilateral aid from the eurozone but, I say again, only as a last resort,’ she told the Bundestag lower house of parliament before departing for Brussels.
‘I will work decisively for the adoption of an IMF-plus-bilateral-aid decision (at the summit). We will again work very closely with France on this.’
EU powerhouse Germany, confronted by strong public opposition to covering Greece’s unpaid bills, has baulked at calls for European aid for Athens, preferring an IMF-led rescue if one is necessary.
Many other eurozone nations, led by France, have championed a purely European solution, fearing that recourse to the IMF would cast a long shadow over the euro, 11 years after its creation.
But the chancellor fears that any European aid could be challenged in Germany’s courts and has an eye on a crucial regional election in May.
Merkel said that whatever happens over Greece, in the longer term changes have to be made to the EU’s governing treaties, both to deal with future crises and to prevent them happening in the first place.
‘I will push for necessary treaty changes so that we can act sooner and more effectively when things go wrong, including with targeted sanctions,’ Merkel said, citing as an example ‘in particular stronger deficit procedures.’
She said the eurozone had to be able to deal with the eventuality of a member state becoming ‘insolvent’ in a controlled manner ‘without threatening the stability’ of the 16-nation bloc.
‘Europe must learn the right lessons for the future ... We have seen that the instruments of the eurozone as they currently stand are insufficient,’ Merkel said.
She said she ‘expressly supported’ proposals by finance minister Wolfgang Schaeuble for tougher sanctions against fiscal sinners.
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LG aims to secure 25pc of world 3D TV market
South Korea’s LG Electronics said Thursday it aims to secure a 25 per cent share this year of the world’s fast-growing 3D television market.
The company announced its target after unveiling what it called the world’s first full LED (light emitting diode) 3D flat panel television.
LG, the world’s second-largest liquid crystal display TV maker by sales, also said it is targeting a 15 per cent share of the global LCD TV market this year, up from around 12 per cent last year.
‘With an increased number of customers experiencing 3D technology and fast-rising 3D content, such as movies, sports and education as well as 3D- related devices, demand for such TVs is expected to grow rapidly (this year),’ Havis Kwon, head of the firm’s LCD TV division, told a news conference.
LG will increasingly bet on 3D TV as it sees more growth potential in the segment, he said. It estimates that global demand for such TVs will reach 13 million sets next year and 83 million by 2014.
The firm said its new LED model would help the company in the 3D market.
Available in 47- and 55-inch versions, the LX9500 model uses an innovative backlight structure to deliver ‘spectacular pictures for the ultimate 3D experience’, it said in a statement.
The new product also uses special glasses that are comfortable enough for viewers to wear for an extended period, LG said.
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China to deliver Rio Tinto verdict on Monday
The verdict in the high-profile Chinese trial of four employees of mining giant Rio Tinto will be delivered on March 29, the Anglo-Australian firm announced Thursday.
Australian executive Stern Hu and three other Chinese staff were tried this week in a Shanghai court on charges of accepting bribes totaling around 13 million dollars and stealing trade secrets.
All four defendants have pleaded guilty to taking money, and one admitted to commercial espionage, defense lawyers say, although the accused have challenged aspects of the charges.
‘Rio Tinto has been advised the verdicts in the trial of the four Shanghai employees will be delivered on 29 March 2010,’ the company said in a brief statement.
The Australian government confirmed the verdict would be delivered on Monday, and said consular officials would be present in the Shanghai courtroom to hear the decision.
Lawyers for the three Chinese defendants—Wang Yong, Liu Caikui and Ge Minqiang—said they had not yet been informed of a date for the verdict.
Calls to the court in Shanghai went unanswered.
During the three-day trial in China’s financial centre which ended Wednesday, the court heard evidence that millions of yuan in bribes had been stuffed into bags and boxes for the accused, according to press reports.
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China sees interest rates as ‘heavy-duty weapon’
A senior Chinese central banker on Thursday played down the need for an imminent rise in borrowing costs to keep a balance between growth and inflation in the world’s third-largest economy.
Zhu Min, a deputy governor of the People’s Bank of China, reaffirmed the central bank’s intention to refine its exchange-rate regime but gave no clue as to when it might drop the yuan’s 20-month-old peg to the dollar.
‘China should, China would, continue to improve its managed floating exchange rate regime based on market demand referenced to a basket of currencies,’ Zhu said.
‘We should and we could,’ he told the Credit Suisse Asian Investment Conference.
China is under intense pressure from Washington to let the yuan resume its rise in order to reduce its trade surplus.
The United States, saddled with near double-digit unemployment, argues that the yuan is unfairly undervalued, giving Chinese exporters an edge in global markets that destroys US jobs.
‘China should and could import more and keep the surplus small. I think this is good for China and this is good for the world,’ said Zhu, who is due to take up a senior post at the International Monetary Fund in May.
He said the PBOC was concerned about containing inflation expectations but signaled that it was wary of endangering growth by jacking up interest rates when it has other instruments in its policy toolkit that it can use first.
‘Interest rates are part of the whole thing, not necessarily the issue,’ said Zhu, speaking in English.
So far this year the PBOC has twice raised the proportion of deposits that banks must hold in reserve instead of lending out. The central bank has also drained large volumes of cash from the banking system through open market operations.
But, unlike the central banks of Australia, Malaysia, Vietnam and—last Friday—India, the PBOC has not changed its benchmark interest rates.
‘When we cope with inflation expectations, we are very careful. We want to make sure we maintain stability, liquidity and growth. We are very careful with interest rates: this is a heavy-duty weapon,’ Zhu said.
He reiterated the central bank’s wish to see a smooth pace of lending throughout the year and said loan growth was likely to slow further this month after halving in February to 700 billion yuan.
The bank has instructed banks to reduce total net new lending this year to 7.5 trillion yuan from a record 9.6 trillion in 2009, when lenders scrambled to put loans on their books to support the government’s economic recovery plan.
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Commercial airlines face $2.8b in losses in 2010
Commercial airlines worldwide should lose about $2.8 billion in 2010, but start enjoying a turnaround next year with the outlook rosier in Latin America and Asia, the IATA reported Wednesday.
The International Air Transport Association said airlines were the hardest hit in the United States and in Europe, where they had to boost efficiency as they struggle amid the global economic lull.
‘For the United States, the loss is 1.8 billion dollars; it is $2.2 billion for Europe and 400 (million dollars) for the Middle East,’ IATA chief Giovanni Bisignani said at the International Air and Space Fair under way in Chile’s capital.
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Another US web firm cut back in China
Two days after Google halted censorship in China, another leading US internet company, Go Daddy, said it was cutting back on its activities there because of Chinese regulations.
Go Daddy, the largest Web domain name registrar in the world, is no longer registering names in China because of ‘chilling’ new requirements imposed by the Chinese authorities, executive vice president Christine Jones said on Wednesday.
Jones also told a hearing of the congressional-executive commission on China that Go Daddy was one of the companies hit by Chinese-based cyber attacks in December that contributed to Google’s decision to stop self-censorship there. Representative Chris Smith, a Republican from New Jersey, praised
Google and Go Daddy at the hearing here for ‘doing the right thing in China’ and urged other US companies, specifically Microsoft, to follow their lead.
‘Google fired a shot heard ‘round the world, and now a second American company has answered the call to defend the rights of the Chinese people,’ Smith said.
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Citigroup signs up for loan modification programme
Citigroup is the latest lender to commit to the government’s programme to modify second mortgages.
The programme is part of the Obama administration’s $75 billion loan modification program aimed at helping customers stay in their homes. The second-mortgage modification program offers lenders who made ‘piggyback’ loans — second mortgages that allowed consumers to make a small or no down payment — incentives to lower payments or eliminate the loans entirely.
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UPDATE--------------MARCH 25, 2010 THURSDAY
BANGLADESH
NEWS
Support for small units to make world-class leather products
Owners of small-sized leather units will get access to formal financing without collateral under a government programme aimed at helping them to run their business viably.
The Credit-Plus Programme, the first of its kind in the country, is also designed to provide skill development training for workers and to build infrastructure and buy equipment to enable the units to make quality leather products to meet export market standards.
A Memorandum of Understanding on commissioning the Credit-Plus Programme was signed between the Janata Bank and the Leather Sector Business Promotion Council at the commerce ministry on March 18.
An amount of Tk 7 crore will be spent on the development of the sector under the memorandum which was signed by Janata Bank’s deputy managing director Mohammad Zillur Rahman and programme manager of the council Ishrat Jahan.
‘This will not only provide collateral-free loans to entrepreneurs but also help the workers to overcome poverty by providing access to better income opportunities,’ said an official of the council.
Of the allocated money, about Tk 3 crore will be distributed to entrepreneurs as loans and Tk 4 crore will be spent for equipment and infrastructure.
More than 1,100 out of about 2,000 small-scale leather units across the country are housed in unapproved buildings in Dhaka city, especially Old Dhaka and Mirpur, according to a recent survey.
These entrepreneurs have for long been producing varieties of leather products, mostly footwear, but they could not meet the standards required in the export market, according to the survey.
The Mutual Trust Bank and non-government organization Social Development Initiative had earlier financed 24 such entrepreneurs in five clusters out of 20 clusters in Dhaka city. The loan repayment rate of this project is said to be 100 per cent!
The Southeast Bank Ltd has allocated Tk 2 crore for collateral-loans which will be disbursed shortly, said officials concerned.
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EXCLUSIVE
UK seeks greater imports from Bangladesh
The UK has expressed its interest in increasing imports from Bangladesh, and also provided assurances of all-out cooperation in strengthening bilateral trade between the two countries.
UK trade and investment minister Lord Davies came up with the assurance when commerce minister Faruk Khan, who is now in London, met him at his office on Monday, according to a press release.
Bangladesh high commissioner to the UK, M Saidur Rahman Khan, and joint secretary (export) to the commerce ministry Manoj Kumar Roy were present on the occasion.
Terming the trade relationship between Bangladesh and UK as old and solid, Faruk Khan hoped that the country’s exports to the UK would increase in the current fiscal, despite the global economic recession out of which the world is starting to emerge.
The commerce minister also sought British investment in the power, gas, telecommunication and ICT sectors, and promised all-out cooperation from the government of Bangladesh in this regard.
The British Minister expressed his opinion that trade ambassador should be appointed between the two nations, and discussed the possibility of holding roundtables with the participation of the top business leaders from the two countries.
The commerce minister is in the UK on an official visit to discuss bilateral trade and investment. He is expected to return home on March 28.
In the 2008-09 fiscal, Bangladesh exported goods worth $1503 million to the UK, while importing goods worth $329.67 million. Both figures were up from the previous fiscal (2007-08), after a year of decline during the 2006-07 fiscal.
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BTCL, Teletalk in co-op deal with Warid
State owned BTCL and Teletalk will share infrastructure with Warid to reduce cost and enhance efficiency. Two memorandums of understanding among the companies have been signed in this regard on Wednesday.
Chris Tobit, the managing director of Warid said, ‘Infrastructure sharing with the two operators would facilitate Warid’s quick roll out plan under the new management.’
Recently, Bharti Airtel acquired 70 per cent stakes of Warid Telecom Bangladesh. This is the first major step by the new management to make it profitable.
‘This will significantly reduce costs and will allow the companies to provide more benefits in terms of price and service,’ said Sunil Kanti Bose, telecommunications secretary.
Md Mujibur Rahman, managing director of Teletalk said, ‘The sharing of infrastructure will allow both companies to reach out further and expand in the rural areas. This will also help the government to reach its vision 2021.’
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REHAB ELECTION 2010-11
Complaint cell headed by retired judge to be formed: Mukkarram
Jagaran, one of the two major panels contesting the REHAB elections, has pledged formation of an ‘effective’ complaint cell headed by a retired judge to deal with the complaints from the clients, should it win the polls.
The panel led by Mukkarram Husain Khan said if his panel members are elected, they would work for brightening the image of the Real Estate and Housing Association of Bangladesh which was tarnished due to malpractice by a handful of members.
‘The currently dysfunctional complaint cell will be made effective by engaging a retired judge, or an educationist, or an environmentalist, who has high level of credibility to all, as its head,’ he said an exclusive interview with New Age on Wednesday.
He added that four members from the real estate sector would be appointed in the cell to assist its chief in handling complaints lodged by the clients. ‘It can be used an arbitration process.’
Mukkarram claimed that 95 per cent of the real estate businessmen had ‘clean track records’ as they did not use fraudulent measures while dealing with the clients.
‘Only a handful of real estate companies may have been engaged in unscrupulous means and such activities have damaged severely the image of the association,’ he pointed out.
Mukkarram Hussain Khan, managing director of Capita Land Development Ltd, is being backed by ruling party lawmaker Enamul Haque, in the election to the executive committee of REHAB for 2010-11 to be held on March 27.
He said if any company is found guilty of committing fraudulence; the REHAB committee would not hesitate to take necessary actions against them to regain the lost image of the association.
When his attention was drawn to the allegations raised by the green activists that the real estate companies were responsible in many cases for degradation of environment, he said none of the real estate companies were engaged in activities detrimental to the environment.
He evaded the question if he would take any action to stop degradation of environment through earth-filling of the flood flow zones and water bodies and said, ‘We have long been urging the government to finalize the draft Detailed Area Plan of the capital city [to address this issue].’
Mukkarram expressed his views that they did not know specifically ‘which one is flood flow zone and which one is residential area or which one is commercial area’. ‘Once the land use plan is fixed, nobody will be able to construct building on water bodies or flood flow zone,’ he said.
When he was asked about the actions the REHAB would take against its members who in connivance with a section of officials of Rajdhani Unnayan Kartripakkha, manage to get design and plan passed, Mukkarram said that a technical committee would be formed with efficient manpower.
‘The committee will vet each and every application before submitting it to the Rajuk or to any other authorities concerned,’ he said. ‘The committee will reject applications for Rajuk’s approval of any plan or design if the design and plans are not made in line with the Floor Area Ratio.’
‘This process will help improve quality of applications and it will save time for approval by the Rajuk,’ he said.
He also said they would try to make the REHAB a powerful institution by ensuring its transparency and accountability and by removing ‘corruption and irregularities’ in the association.
‘We will also make a strong urge upon the government to form force such as the proposed Industrial Police to address anarchy and illegal activities in the housing sector,’ he said.
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REHAB can’t take action against its dishonest members: Bipu
Nasrul Hamid Bipu, who is leading a panel called Nabadhara in the elections of the Real Estate and Housing Association of Bangladesh’s 2010-11 executive committee, said that the organization cannot take any action against its members who resort to fraudulent measures in the real estate business.
Bipu, also an Awami League lawmaker, told New Age in an exclusive interview on Wednesday that he had asked the government to curb unscrupulous business in the real estate sector through its regulatory bodies.
The REHAB election is scheduled to be held on March 27.
Asked why his panel is promising to thwart the passage of the proposed Private Real Estate Development and Management Act 2009 if it has any provision for criminal procedures against dishonest developers, Bipu answered, ‘We want a time befitting law which will be business-friendly and at the same time ensure the rights of the consumers. It is not fair that you will give ten years of imprisonment to those who will delay the handing over of apartments while those who are mixing poison with foodstuff will go free by giving just Tk 5,000 as penalty.
‘Given the tradition of procrastination in our governance system, one out of five or six projects of a real estate company might be delayed. What will happen to the other projects if the developers are sent to jail? We do not want such an unbalanced law.
‘We of course want the unscrupulous businessmen to be punished, but it will in no way be justifiable to thwart the progress of the sector on the plea of curbing unscrupulous realtors.’
When asked whether the real estate sector would be affected if the unscrupulous developers were punished, he replied, ‘There are many laws in the country for curbing unscrupulous businessmen. They can be brought to justice under those laws.
‘You see, one won’t be able to survive in the real estate business resorting to unscrupulous means.’
Asked what action he would take against land-grabbers, Bipu said, ‘We want to omit the expression land-grabbers from the real estate sector. I will appeal to the government to provide lands for the developers so that they can arrange housing for people on the basis of the government’s new policy, the Public-Private Partnership system. Then the question of land-grabbing won’t arise.’
As he was asked what they would do against those developers who often erect buildings on wetlands or on flood flow zones, thus causing environmental degradation, Bipu replied, ‘Let the Detailed Area Plan be passed immediately. Then we will have specific guidelines for land use and thus will construct buildings according to the DAP.’
Responding to a question what kind of action the REHAB would take against those of its members who, in connivance with a section of crooked officials of the Rajdhani Unnayan Kartripakkha, get faulty designs and plans passed, Bipu said, ‘REHAB is not a regulatory body. REHAB is an association of developers, so its priority is looking after the interest of its members. In fact, it cannot take action, like cancellation of membership, against any of its members.’
He, however, admitted that REHAB can cancel the membership of any of its member companies if it violates the association’s code of conduct.
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NEWS IN FOCUS
Poultry sector can provide 50 lakh more people with jobs: Muhith
Finance minister AMA Muhith on Wednesday said that the poultry industry can play a very important role in country’s economy, as it can create extra employment opportunities for some 50 lakh people.
‘Not merely fulfilling demand of protein, the industry also created employment opportunities for around 50 lakh people… there is scope of creating employment for another 50 lakh people with the flourishing of the industry,’ he said while addressing the Agents Conference of Kazi Farms Group at Bangabandhu International Conference Centre.
Chaired by Kazi Farms Group chairman Kazi Zahedul Hasan, the function was also addressed, among others, by food and disaster management minister M Abdur Razzaque, director general of livestock services Sunil Chandra Gain, and Algis Martinez, chief veterinarian of Cobb Vantress Inc, USA.
Muhith viewed that the poultry industry is ideal for Bangladesh, as it can be developed with limited investment.
‘Unlike the Kazi Group, most of the farms are small and medium enterprises. They can run their business with limited investment and can create employment opportunities, thus enhancing the resources of the country,’ he said.
The finance minister underscored the need for bring various components under consideration to attain food security and also ensure nutritious food.
He also emphasized integrating initiative and commitment in this sector. ‘We need to bring quality in initiatives and for that we need commitment,’ he said.
Addressing the function, food minister Abdur Razzaque said there is huge potential for the poultry sector in Bangladesh as it can create massive employment opportunities particularly for the rural population.
He said the poultry farm owners in the country run their businesses under risk in the face of bird flu outbreak. ‘Their businesses need to be brought under the insurance system.’
The food minister urged the finance minister to take necessary steps to compensate the poultry farm owners who were often affected due to bird flu.
Terming food security as an important agenda of the government, he said that food production increased by 79 lakh tonnes in five years during the tenure of the AL-led government in 1996-2001.
As the production of chicken is now 40-45 lakh pieces per week against the demand of 60-65 lakh, Razzaque stressed the need for giving adequate attention to this sector.
Earlier, Kazi Farms Group directors Kazi Zahin Hasan and Kazi Zishan Hasan made separate presentations. In his presentation, Kazi Zahin showed that there is a need for importing bird flu vaccine and also to improving the culling system in all the farms across the country.
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WORLD ECONOMY
UN chief outlines steps needed to reach development targets
Investment reforms and international cooperation are among the ingredients necessary to procure the finances needed to push ahead with development in poorer countries, UN secretary-general
Ban Ki-moon said Tuesday. ‘As we meet, the world economy shows signs of recovery, yet growth remains fragile,’ Ban said at the General Assembly’s high-level dialogue on financing for development, held at the UN headquarters in New York. ‘Job losses persist. Human costs are high in all regions.’
The secretary-general underscored the need to ensure that vulnerable countries not be burdened by ‘onerous conditions or burdensome external debt.’
In his address, the secretary-general called on the international community to deliver on the development objectives of the so-called Doha round of negotiations on reducing international trade barriers, as well as to reform the current global financial system.
‘We need better mechanisms to coordinate economic policy with representative, accountable and equitable governance,’ he emphasized, welcoming the reform of the Bretton Woods institutions, which include the World Bank.
Such reforms, Ban stated, must be ‘ambitious and timely,’ as well as amplify the voice and participation of developing countries.
Investment must also promote sustainable development with many poorer nations needing assistance to shift to ‘green’ economies, he said.
A binding international agreement on climate change is essential, said the secretary-general, who has set up a high- level panel seeking to mobilize financing to help developing countries.
On the millennium development goals - eight anti-poverty targets with a 2015 deadline, he expressed optimism that accelerating progress in the remaining five years is possible.
‘We also know what it takes: the rights policies, adequate investment and international support,’ he said.
Last week, he issued a report, entitled ‘Keeping the Promise’, in which he unveiled a new action plan aimed at getting governments, civil society actors, private businesses, philanthropy and the multilateral system to act ‘efficiently, effectively and collectively.’
Also addressing the two-day gathering on Tuesday was Rebeca Grynspan, the associate administrator of the UNDP, who warned that the external finance shortfall faced by developing countries-estimated by the World Bank to be at $635 million in 2009- due to the recession threatens to roll back ‘hard fought progress’ toward the MDGs.
‘Without the ability to stimulate spending and protect social spending and the most vulnerable, the consequences of the global recession can take many years to remedy,’ she said.
The official pointed out that chronic hunger and reduced school attendance have prolonged effects on countries’ productivity. ‘Unfortunately, very often we forget that the short-term and the long-term start at the same time,’ she said.
Although official development aid has increased, very few nations have reached the target of 0.7 per cent of gross national product, while the members of the G8 are far behind meeting the pledge made in Gleneagles, Scotland in 2005 to double ODA to Africa.
Grynspan urged the international community to deliver on its commitments, emphasizing that experience has shown that the MDGs can be met, given that there are adequate resources, political responsibility and leadership at all levels.
‘To achieve the MDGs, the world must channel more financial resources to development,’ she said.
‘It is in our interest to avoid costly setbacks,’ she said.
‘We all benefit when countries have vibrant economies and educated and healthy populations that are well-governed, peaceful and able to support the fight against climate change.’
The two-day dialogue, which kicked off here on Tuesday morning, features round-table discussions on topics like the impact of the financial and economic crisis on foreign direct investment.
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Workforce in India, Brazil to grow by over 200m by 2030
The workforce of India and Brazil are expected to grow by over 200 million people in the next two decades, even as there will be huge talent crisis globally, according to the World Economic Forum.
‘Developing countries, not affected by ageing populations (the workforce of India and Brazil will grow by more than 200 million people over the next two decades), will also face huge skills gaps in some job categories due to low employability,’ a report by the WEF said.
By 2030, the developed countries would need millions of new employees to sustain their economic growth.
As per the report, prepared in collaboration with The Boston Consulting Group, the US would need as many as 26 million employees by 2030.
The report titled ‘Stimulating Economies through Fostering
Talent Mobility’ noted that if the issue of ‘unparalleled talent scarcity’ is not unaddressed, the same would put a brake on economic growth in many countries.
In most developing countries- not affected by demographic Shifts- strong economic growth and the limited employability of the workforce would lead to large skills gaps in some job categories, it added.
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Chinese demand sparks new interesting magnetite iron ore
On a sprawling west Australian cattle station, the world’s largest trucks and excavators are working overtime to dig what will become one of the biggest holes on Earth.
Sino Iron, a joint venture between Hong Kong-based City Pacific and China’s state-owned Metallurgical Group Corporation, will be Australia’s largest magnetite iron ore mine, and its first major foray into processing the oxide.
China has been mining magnetite domestically for close to 100 years but Australia, blessed with other high-quality forms of ore deposits, saw little commercial benefit.
However, a five-fold increase over 10 years in iron ore’s spot price, driven by voracious Asian demand for the basic ingredient of steel, meant magnetite was now not only viable, but vital.
‘This is basically China’s biggest single investment in a resources project in Australia,’ said Sino Iron mine manager Tim Ryan. ‘This will be the first large-scale magnetite operation in the world.’
The renewed interest will translate into an open-cast pit 5.5 kilometres (3.4 miles) long, three kilometres wide and hundreds of metres deep-providing a glut of high-grade steel for China’s increasingly affluent consumers.
Despite being a lower-grade mineral when it comes out of the ground, and more costly to produce, magnetite is more stable and of higher purity than - the main form of ore used in iron production- once crushed and processed, Ryan said.
‘We like to say you build your Porsches out of magnetite and your Toyota out of hematite,’ Ryan joked. ‘Magnetite’s a better grade.’
The top-end product, commonly used to build aircraft bodies and medical equipment, will find an enthusiastic market in the diversifying Chinese economy and its burgeoning middle class.
Mining giant BHP Billiton first explored the Sino Iron tenement in the early 1960s but wasn’t interested in magnetite, which is only 25 per cent pure when it comes out of the ground, said Ryan.
‘It just wasn’t commercially viable to mine and process magnetite, which costs about 40 per cent more than hematite to produce,’ Ryan said. ‘It was a question of economies of scale.’
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NEWS IN FOCUS
Iraq oil revenues dip despite record exports
Iraqi oil revenues dipped in February on slightly lower oil prices despite the highest level of exports in 20 years, the oil ministry said on Tuesday.
‘Revenue was $4.229 billion, based on an average price of $73.4 per barrel and exports of 57.9 million barrels,’ ministry spokesman Assem Jihad told AFP.
Iraq had revenues of $4.44 billion in January, based on oil prices of $73.97 per barrel.
Jihad said 45.2 million barrels were shipped from the southern terminal of Basra in February, while the remaining 12.7 million barrels were exported from the country’s northern fields in Kirkuk.
The oil ministry said at the beginning of March that exports in February had reached 2.069 million barrels per day, the highest level since Saddam Hussein’s invasion of Kuwait two decades ago.
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East Asia launches $120b currency swap pact
East Asian nations Wednesday officially launched a 120-billion-dollar regional currency swap agreement, giving them a safety net against future liquidity shortages.
The Chiang Mai Initiative Multilateralisation covers South Korea, China, Japan and the 10-member Association of Southeast Asian Nations.
Its successful launch shows their commitment ‘to further enhance regional capacity to safeguard against downside risks and challenges in the global economy,’ according to a joint statement issued by Seoul’s finance ministry.
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Oil prices fall
Oil prices fell in Asian trade Wednesday after nearing $82 as a private report showing weaker US energy demand dampened sentiment, analysts said.
New York’s main contract, light sweet crude for May delivery, dropped 71 cents to $81.20 a barrel.
Brent North Sea crude for May was down 60 cents to $80.10.
The American Petroleum Institute, an industry group, said late Tuesday crude stocks in the country, the world’s largest energy consumer, rose by 7.5 million barrels for the week ended March 19.
Analysts polled by Platts had forecast an increase of 1.67 million barrels.
‘The increase was much larger than expected so it was slightly bearish. I think the market is readying itself for similar numbers (later),’ said Serene Lim, a Singapore-based oil analyst with ANZ bank.
The US Department of Energy will release its weekly inventory report later Wednesday. Most analysts expect the data to show an increase in crude oil stocks of 1.4 million barrels.
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Greece debt concerns weigh on euro
The euro fell against the dollar and the yen in Asian trade on Wednesday, depressed by uncertainty over how European leaders will tackle Greece’s debt crisis, dealers said.
The euro dropped to $1.3453 in Tokyo afternoon trade from $1.3482 in New York late Tuesday. Against the yen, it slipped to 121.83 from 122.10.
The dollar was changing hands for 90.55 yen, up from 90.41 yen.
Traders were waiting for an EU summit later this week that will decide whether to launch a collective bailout for eurozone member Greece, or whether to give the International Monetary Fund the central role in granting loans.
According to a European diplomatic source, Greece’s eurozone partners were close to concluding an accord that would give the IMF the pivotal role.
Ahead of the meeting on Thursday and Friday, Germany and France have publicly clashed over the necessity of an EU bailout plan.
‘The euro is being sold by speculators in response to information on how Europe will deal with the Greece issue, for example rumours that the IMF will play a role’ in granting Athens loans, said Resona Bank dealer Masato Otsubo.
‘The euro’s weakness is likely to continue due to these speculators,’ he added.
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Developing countries paying ‘dire price’ after global crisis: UNAG
Developing countries continue to pay a ‘dire price’ after the global and economic crisis, UN General Assembly president Ali Treki said on Tuesday as he called for international efforts to be stepped up in assistance for vulnerable regions.
Convening the two-day fourth high-level meeting of the General Assembly on financing for development here at the UN Headquarters in New York, Treki deemed this window of opportunity to mobilize the necessary resources for developing countries amidst the backdrop of the economic recovery.
‘Today we have to reinforce our assistance to developing countries,’ said Treki, calling for efforts to reinvigorate the global economy in a sustainable manner.
‘Developing countries are paying a dire price after the global and economic crisis,’ he said.
Highlighting the ‘major drop’ in the flow of investments to developing countries, Treki outlined the consequences of the global economic crisis and called for multilateral achievements by the international community to address these impacts.
A reform of the international monetary and financial system is ‘paramount’ in order to ensure that those institutions can face arising challenges of the 21st century, such as globalization, Treki said.
The meeting was the fourth held by the 192-nation body since the path-breaking international conference on financing for development in Monterrey in 2002.
UN secretary-general Ban Ki-moon, senior officials from the World Bank, the International Monetary Fund, the World Trade Organization and other key relevant agencies as well as delegates from member states joined Tuesday’s plenary session.
The two-day gathering will include three multi-stakeholder roundtables, respectively delving into reform of the international monetary and financial system, the impact of the economic crisis, and development cooperation.
Participants will also engage in an informal interactive dialogue with the focus on the link between financing for development and achieving the Millennium Development Goals.
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EXCLUSIVE
Japan’s exports log fastest rise in 30 years
Japan’s exports soared at the fastest pace in about three decades last month, helping the world’s number two economy to extend a recovery from the worst recession in decades, data showed Wednesday.
Worldwide demand for Japanese cars, electronics and other goods is rebounding after collapsing during the global economic crisis which erupted in 2008.
Exports in February leapt 45.3 per cent to 5.13 trillion yen ($56 billion), the fastest year-on-year growth since April 1980, according to the finance ministry.
While exports are still about one quarter lower than their level two years ago, the picture has brightened significantly compared with February 2009, when shipments roughly halved from a year earlier.
‘Exports, the driving force of a recovery in Japanese corporate earnings, have maintained their steam,’ said Naoki Murakami, chief economist at Monex Securities.
‘The momentum in the global economic recovery is becoming stronger thanks to a US rebound since late 2009,’ which followed upturns in the Chinese and other Asian economies, Murakami wrote in a note.
Last month Japan’s trade surplus surged more than nine-fold to 651.0 billion yen ($7.2 billion) from 70.8 billion a year earlier, topping market expectations.
Shipments of automobiles more than doubled despite the safety woes of Toyota Motor, which has recalled more than eight million vehicles worldwide. Auto part exports rose 121.7 per cent while electronics components were up 69.1 per cent.
Imports increased 29.5 per cent to 4.48 trillion yen owing to higher prices of oil and nonferrous metals.
Credit Suisse economists said the latest data ‘confirm that both exports and imports have continued to recover.’
‘While we had been concerned about the negative impact of automobile recall issues, auto exports to the US increased 129.9 per cent year-on-year in February,’ they noted.
Japan’s surplus with the United States surged 173.0 per cent to 395.9 billion yen and with the European Union it rose 69.9 per cent to 165.9 billion yen.
With China, Japan’s biggest trading partner, the trade balance slipped into a deficit of 24.6 billion yen from a year-earlier surplus of 10.6 billion yen.
Japan’s exports to China grew 47.7 per cent on robust shipments of cars and parts but imports rose by a brisker 54.3 per cent due to increased purchases of clothing, audio and video devices, computers and other electronic equipment.
The Japanese economy is still relatively weak but domestic demand has been somewhat resilient helped by a recent slight upturn in wages, said Takeshi Minami, economist at Norinchukin Research Institute.
‘As long as China’s economy grows healthily, Japan will keep benefiting,’ Minami said. ‘On the other hand, China’s credit-tightening policy, if excessive, could pose risks to Japanese exports.’
Japan’s economy plunged into its most severe post-war recession in 2008, with its heavy dependence on foreign markets making it one of the worst affected by the global economic downturn.
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Eurozone moves towards IMF-led aid deal for Greece
Eurozone leaders moved to confront the Greek debt crisis with plans for a summit, only the second such gathering in their history, as divisions over a bailout for Athens shook the bloc’s unity.
Greece’s partners in the 16-nation eurozone were close to concluding an accord that would give the International Monetary Fund the central role in granting Athens loans, a European diplomatic source told AFP.
But the deal would also provide for tough sanctions for eurozone budget transgressors, in line with Germany’s priorities, the source said.
The deal, which would see eurozone nations top-up the main IMF loan, was brokered between France and Germany.
It was due to be announced Thursday morning in Brussels at a specially convened summit of eurozone leaders called by EU president Herman Van Rompuy.
It would precede the full summit of 27 EU leaders on Thursday and Friday.
Germany’s chancellor Angela Merkel has held firm all week against calls from her European Union partners for the EU to take the lead role in helping Athens.
‘The eurozone aid will only be forthcoming as a complement to IMF loans,’ the source underlined.
‘Its mixed assistance, but the IMF will play a central role,’ added the source, who also stressed the German drive for tighter rules on eurozone members’ budgetary management.
Germany wanted to ‘simplify complicated current procedures’ and allow Brussels to trigger more automatic sanctions against countries that breached commitments on annual deficits and accumulated debt, said the source.
These penalties could include the loss of voting rights at European ministerial meetings and fines, the source added.
The deal appeared to show that while Merkel had resisted pressure to let the EU pay the lion’s share of any bailout for the Greeks, she had conceded a limited European role rather than IMF intervention exclusively.
And there were signs earlier Tuesday that France too, in the face of German resistance, had stepped back from demands for full eurozone solidarity.
A French government source indicated that Paris was softening its resistance to a series of Merkel demands — on IMF involvement, on timing and on the scope of sanctions that could be introduced.
‘Different views’ in Europe will ‘doubtless come together somewhere in the middle,’ a French government source said.
German parliamentary sources said Merkel had told lawmakers that compromise in Berlin was conditional on Greece first going to the IMF.
After days of growing pressure from EU partners, the Germany daily Die Welt reported that Merkel would sign up provided eurozone countries accepted stricter rules on budgetary management.
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G-77 calls for ending Doha Round trade talks
The Group of 77 developing countries and China Tuesday called for the conclusion of the Doha Round trade talks to prevent future global financial crisis and protect development gains.
Abdullah Mohamed Alsaidi, chairman of the Group of 77, made the remarks as he was speaking at the fourth high-level dialogue of the UN General Assembly on financing for development.
‘The Group considers trade to be a vital tool to provide long- term sustainable growth,’ said Alsaidi, who is also the permanent representative of Yemen to the United Nations. ‘In this regard, we call for the conclusion of the Doha Round to prevent future crisis and secure development gains made before the crisis from erosion.’
Launched in 2001, the Doha Round of world trade talks has been deadlocked in the past eight years due to differences between developed and developing countries over access to agricultural and non-agricultural markets. A series of deadlines had been missed, which cast doubt on the latest one.
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Rio Tinto awaits verdict as China trial ends
The trial of four employees of mining giant Rio Tinto ended in China without an immediate verdict on Wednesday as Australia warned that the eyes of the world were watching the outcome.
Australian executive Stern Hu and three other Chinese staff had been in the dock in a Shanghai court since Monday on charges of accepting bribes totaling around $13 million and stealing trade secrets.
All four defendants in the highly-sensitive case pleaded guilty to taking money, and one admitted commercial espionage, defense lawyers say, although the accused have challenged aspects of the charges.
A court spokeswoman declined to say when a verdict would be issued.
During the three-day trial in China’s financial hub, the court heard evidence that millions of yuan in bribes had been stuffed into bags and boxes for the accused, according to press reports.
Australian Prime Minister Kevin Rudd said the world was watching the trial, which has been widely seen as a test of the rule of law in China and has raised questions about doing business in the world’s third-largest economy.
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Germany insists no aid for Greece as summit looms
Germany’s economy minister says his government remains opposed to paying financial aid to Greece, dampening EU officials’ hopes that a summit Thursday will agree to a rescue package and suggesting the International Monetary Fund may have to be involved.
Rainer Bruederle told daily Passauer Neue Presse Wednesday that ‘aid for Greece would be the wrong signal. We must not create a precedent that other eurozone countries can refer to in the future.’
Bruederle said ‘it cannot be possible that German taxpayers have to pick up the bill for mismanagement in Greece and elsewhere.’
The EU is split on the issue of Greek support, but a German government official said earlier this week that several EU countries now appeared to be unopposed to IMF funding a bailout.
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GM unveils electric concept car for mega-cities
General Motors unveiled a new electric concept car in China on Wednesday, aiming to burnish its image as a supplier of non-polluting cars tailored to the crowded mega-cities of the future.
GM showcased the EN-V, or ‘Electric Networked-Vehicle,’ at a pavilion that it will share with its China joint venture partner, SAIC Motor Corp, during the World Expo to be held in Shanghai from May through October.
The two-seater EN-V, which would communicate with other cars to help avoid accidents and ease traffic in congested major cities like Shanghai, is only at the conceptual stage — it would not hit showrooms for another 10 to 20 years, and would require regulatory changes for it to be allowed on roads.
But the Detroit automaker is looking to the helmet-shaped EN-V to help establish it as a significant player in cutting-edge, fuel-efficient vehicles while it seeks to reinvent itself after emerging from bankruptcy last July.
‘In the EN-V we are really showing a new concept, for not just electrified vehicles but a reinvented vehicle experience for mega cities,’ Alan Taub, GM’s vice-president for global research and development, told reporters in Shanghai.
The three versions of the EN-V, powered by electric motors, can go about 40 km (25 miles) on a single charge.
Other major automakers, including Toyota Motor Corp and Nissan Motor, have similar zero-emission mobility concepts as they look to meet higher fuel economy standards and increased consumer demand for greener models.
The focus on a compact, low-emission vehicle contrasts with GM’s struggle to find a buyer for its iconic but tarnished Hummer brand, which had become synonymous with gas-guzzling excess.
GM had agreed to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co, a little-known company based in south-western China’s Sichuan province, but the deal failed to win Chinese government approval.
The EN-V is, however, not GM’s first effort to reposition itself with more environmentally friendly models.
Its Chevrolet Volt plug-in hybrid, slated to reach showrooms in late 2010, is key to GM’s effort in the field.
GM’s choice of China to unveil the new concept model underscores the importance of China, the world’s biggest auto market, where car sales hit record highs in 2009 despite the global industry suffering a steep downturn.
China is GM’s second-largest market after the United States and a strategic battleground for all foreign automakers, with the likes of Volkswagen AG and Toyota fighting fiercely for bigger market share.
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UPDATE--------------MARCH 24, 2010
BANGLADESH
NEWS
Power, energy ministry seeks 6 more months to offload shares
Dearth of quality shares on stock market to continue
The power and energy ministry has requested the finance ministry to extend the June deadline to December for offloading shares of state-run power and energy companies, dealing a blow to the capital market’s hope for trading in more quality shares within months.
The ministry in a letter on March 18 informed the finance ministry that an expert committee would be formed to make recommendations on ‘how to make the share offloading process of power and energy companies effective, acceptable and profitable.’
The ministry in line with a decision of a power and energy ministry meeting held on February 19 requested the finance ministry to extend the deadline for offloading shares of the companies till December.
The power secretary, Abul Kalam Azad, however, on Tuesday said they had made no such request for deadline extension.
The finance minister, Abul Maal Abdul Muhith, on January 13 gave directives to the power and energy ministry to offload on the capital market up to 49 per cent of the shares of 11 companies under the power and energy ministry by June 2010. Muhith also directed other ministries to offload shares of respective companies.
The companies under Petrobangla are the Bangladesh Gas Fields Company Limited, Sylhet Gas Fields Limited, Jalalabad Gas Transmission and Distribution Systems Limited, Bakhrabad Gas Systems Limited, Pashchimanchal Gas Company Limited, Rupantarita Prakritik Gas Company Limited and Gas Transmission Company Limited.
The state-owned power sector companies are the Dhaka Electric Supply Company, Power Grid Company of Bangladesh and Rural Power Company Limited.
The finance ministry asked DESCO and the PGCB, which have already offloaded 25 per cent of their shares, to divest 15 per cent more shares.
The finance ministry also asked the Liquefied Petroleum Gas Limited, a subsidiary of the Bangladesh Petroleum Corporation, to divest 49 per cent of its shares.
Capital market experts and the Dhaka Stock Exchange are requesting the government to offload shares of state-run companies as the stock market has become overheated for lack of quality shares. The demand for shares of state-run companies on the stock market is very high because of their good fundamentals.
Petrobangla and Power Development Board officials, however, are reluctant at offloading shares of their subsidiaries claiming that such divestment would not bring about overall improvement in the crisis-stricken power and energy sectors.
Officials at the meeting on February 19 opposed direct offloading of more shares of power and energy companies saying there is no need to offload shares of gas companies as they are already making profit. ‘The companies can make fresh investments from their profits,’ said an official.
The PDB chairman, Alamgir Kabir, at the meeting also opposed the move to offload shares of the state-run power companies. He said although some DESCO shares were offloaded, there were no visible benefits for the power sector as a whole.
‘DESCO buys electricity at a lower rate, even below the generation cost, from the power board and makes profit by selling that power at higher rates. But the PDB on the other hand is a loss-making organization as it is forced to sell power at lower rate,’ he said.
A high official of a state-run power company, however, told New Age it was not right that the offloading of shares could not bring about any benefit to the sector.
‘For example, DESCO and Titas jointly rose more than Tk 1,500 crore by selling their shares. The amount can be used for power generation and gas field development. The government should give a clear direction on how the money will be used,’ he said.
Former finance adviser Mirza Azizul Islam told New Age government officials were not interested in offloading shares of state-run companies as they were getting financial benefits from the company boards.
‘After offloading government shares, there will be transparency and accountability in company activities. As a result, government company officials are not also interested in offload shares,’ he said.
The Dhaka Stock Exchange president, Rakibur Rahman, told New Age he had requested the finance minister to remove from different ministries the officials who were against the offloading of shares.
‘The share market will not be vibrant if quality shares are not offloaded. The state-run companies were asked to offload shares in 2005 but we are yet to see any significant number of shares on the market,’ he said.
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Good governance can propel growth to 8pc by 2013: Muhith
Bangladesh can attain an economic growth of 8 per cent by 2013, should there be good governance, political consensus and centralization of the government, said the finance minister, AMA Muhith.
He told a business gathering on Tuesday that the country could embark on a higher growth path by promoting all its potential sectors, especially information and communications technology.
It will further require creation of massive rural non-farm jobs to capitalize on the county’s comparative advantages and thus scale up returns from economic activities, he said.
‘A fundamental issue is good governance along with broader consensus. All these, including devolution of power to lower levels, can help achieve 8 per cent growth by the end of our tenure,’ he said at the monthly luncheon meeting of the American Chamber of Commerce in Bangladesh at Dhaka Sheraton Hotel.
Dwelling on economic outlook, Muhith expressed optimism that the Awami League-led government would be able to increase public investment to 20 per cent of overall national investment from 16 per cent and raise overall investment to 30 per cent of savings of gross domestic product from 25 per cent.
The AmCham president, Aftab ul Islam, focused on energy and investment deficiency and also suggested an accelerated reform process and making the new budgetary window of public-private partnership effective.
The finance minister, however, projected a higher than current economic growth of near 6 per cent, and termed information and communications technology a weapon to accelerate the pace of economic advancement.
‘Digital Bangladesh will be ready by 2021,’ he said referring to the launch of digital portals at district level. ‘ICT will be the second largest sector after RMG [readymade garments].’
Muhith also expressed confidence that most of the targets of the current budget would be achieved.
Aftab suggested that a mechanism should be evolved to tackle various issues, including administrative bottlenecks and complicated issues faced by different ministries.
He also recommended a specialized administrative arrangement with a legal framework to administer the projects under public-private partnership and forge a political consensus so that the projects were not abandoned with the changeover in power.
The business leader inquired about the government’s plans to make functional the Bangladesh Better Business Forum and Regulatory Reforms Commission. The finance minister admitted the delay and said something would be done in the near future.
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STOCK MARKET
SEC tightens rules to check insider trading
The Securities and Exchange Commission Tuesday tightened further some rules and regulations to check insider trading.
The commission in separate circulars restricted share trading of the people related to a listed company and margin loan facility to the management staff and relatives of merchant banks and brokerage firms.
The SEC also set the criteria for calculating the market price of securities to determine the margin requirement.
One of the new directives says that any sponsor, director, officer or employee, auditor or person associated with audit, adviser or legal adviser of any company listed with stock exchanges, or beneficial owner shall not be allowed to buy, sell or transfer or receive shares in any form of that company, two months prior to the date of completion of annual accounts.
It also directed that stockbrokers should not provide margin loan facilities to any member of the board of directors of its own company, officer and staff employed in the company management, their parent, spouse, son, daughter, sister, brother, son-in-law, daughter-in-law and other relatives.
This directive will be effective from April 1.
In another directive, the SEC said the stockbrokers should calculate the market price of portfolios/securities to determine the margin requirement in the following manner considering the closing price of the securities and net asset value.
All corporate benefit, such as dividend, bonus and rights entitled according to book closure/record date will be added with portfolio value, the commission said.
It further said if the above method could not be applied in course of valuation of government securities and open-end mutual fund securities, in that case the stockbrokers would follow objective consideration process to determine their market price.
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EXCLUSIVE
Indian RMG businesspeople shaky as buyers eye Bangladesh
Mumbai-based apparel manufacturer Rajesh Masand of late has become shaky as some of his clients have begun considering picking up shirts for the mass market from Bangladesh apparel manufacturers.
‘One cannot blame the retailers as they are getting garments 25 per cent cheaper than what Masand could offer,’ the leading daily, The Economic Times, said in an exclusive report.
In April 2008, India had allowed duty-free import of eight million pieces of garments from Bangladesh.
The country, however, is now hungry for more. It seeks deeper penetration in the Indian domestic market by flooding it with 14 million pieces annually without duties, the report said.
Although the number is too minuscule considering the mammoth Indian consumer market, it is scaring small apparel manufacturers working on similar product lines (basic formal shirts, denims and cotton trousers) as their Bangladeshi counterparts.
Masand for instance, feels the heat already and has decided to increase his volumes to arrive at an economy of scale.
He will invest about Rs 4.70 crore to increase his capacity to 45,000 units in the next three months and take his turnover to Rs 24 crore in one-and-half-years.
‘It would not come as a surprise to me if my client outsources his manufacturing to a Bangladeshi apparel manufacturer and hence, have begun an expansion process to minimize the threat,’ he says.
With the average middle class Indian spending Rs 2,500 a year on clothes, Bangladeshi apparel players are keen to corner 10 per cent of the India’s growing domestic apparel to increase their $ 10.9 billion annual garment exports by $ 2 billion.
The Economic Times further reported that a delegation comprising senior office bearers of Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Textile Mills Association visited India and requested India that Bangladesh be allowed to flood 14 million pieces annually without duties.
Chairman of the Apparel Export Promotion Council, Premal Udani who met the delegation adds, ‘Bangladesh is aggressive about its India plans. The fact that they seek deeper engagement than the existing concession for 8 million pieces indicates that they are very positive about their targets.’
It said thousands of others in the predominantly unorganized sector are however, not ready to take the onslaught. Market observers add that although the numbers do not look threatening at the moment, they could spell trouble for SME players in the Indian apparel market.
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NEWS IN FOCUS
Bangladesh to participate in Texworld
Bangladesh will participate in the upcoming Texworld USA, the biggest readymade garment fair in the United States, to be held on July 13-15 at Javits Convention Centre in New York.
The world-reputed buyers of the USA, Canada, Europe and African countries will attend the showcase, said a press release.
Texworld USA is the largest sourcing event in North America for apparel fabric buyers, product development specialists, designers, merchandisers and overseas sourcing professionals.
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Banks urged to cut interests for fisheries, livestock sector
Fisheries and livestock minister Md Abdul Latif Biswas Tuesday urged the authorities of the banks for reducing interest rates to single digit for loans to fisheries and livestock sector.
He urged them for providing loan facilities for owners of fisheries and livestock farms at the rate that is given to agriculture sector.
He made the call while exchanging views with a delegation of bankers at his secretariat office on Tuesday, an official handout said.
The meeting was organised to find ways of providing soft loans in easier terms to fishermen, marginal owners of fisheries, poultry, and dairy farms in cyclone-hit and Monga-prone areas in the country.
Secretary of fisheries and livestock ministry Md Sharful Alam, directors general of fisheries and livestock divisions, representatives of different banks and representatives of finance ministry attended the meeting.
The minister said although fisheries and livestock are sub-sectors of agriculture sector, banks is unevenly behaving with these sub-sectors.
Although the sub sectors are providing nutrition and generating employment, they, especially marginal farm owners of this sector, do not get loans as per their requirements, he said.
Banks provide loans to this field at a rate which is one to three per cent higher than those for agriculture sector, which cannot be expected, he added.
Since banks express unwillingness in sanctioning loans for this field despite maintaining fund allocations, thousands of fisheries and poultry farms are facing closure, the minister said adding due to this, no new farms are being set up.
Mentioning that there are over two lakh fishermen who catch Jatka fish and borrow money from mohajan at higher rates on condition of selling those to the borrowers at low prices, the minister requested bankers for providing loans at low rates for creating alternate employment for them.
There is a group of people who always enjoy all sorts of facilities from the government and they fetch full loan advantages from fisheries and livestock sector but marginal farm owners are deprived of loan facilities, the minister said.
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WORLD ECONOMY
Qatar ready to sell LNG to India at over $10 per unit
Qatar has agreed to supply 4 million tonnes of additional liquefied natural gas (LNG) to India, but at more than double the rate of Reliance Industries’ KG-D6 gas.
The world’s largest LNG exporter, which currently sells 7.5 million tonnes of LNG every year, is seeking a price linked to crude oil that at prevailing rates comes to over $10 per million British thermal unit.
‘The proposal is for supply of 0.3 million tonnes of LNG this year, 0.5 million tonnes in 2011, 2.5 million tonnes in 2012 and 4 million tonnes from 2013,’ petroleum secretary S
Sundareshan told reporters. ‘This is, of course, subject to price negotiations which we will enter now.’
Qatar wants to divert cargoes it had committed to the US and Europe to Asia at a better price. Qatar’s agreement with the US provides for a clause where it can divert LNG to other markets if it realizes a better price. Henry Hub price of gas, the pricing point for natural gas futures contracts in the US, is currently between $ 4 and $4.2 per mmBtu.
‘RasGas (of Qatar) and Petronet LNG/GAIL India will engage in discussions on pricing and I hope in the next few weeks they can finalize agreements,’ Qatar deputy premier and minister of energy and industry Abdullah Bin Hamad al-Attiyah, who had last night discussed the issue with petroleum, Minister Murli Deora, said.
The additional supplies would be ‘long-term, typically 15-20 years,’ he said.
Sundareshan said the supplies are being discussed for import at Petronet’s Dahej terminal in Gujarat and the yet-to-be commissioned Dabhol import facility in Maharasthra.
India is, however, skeptic of the offer as the asking price is too high. Qatar is seeking a price of 13.5-15.5 per cent of Japanese Crude Cocktail—the average price of customs-cleared crude oil imports into Japan— while New Delhi was looking for a fixed price, like the current sweetheart deal.
The price is finding some resistance in India from certain quarters that consider it ‘too high’. The rates quoted are almost the same as Petronet’s Gorgon LNG deal but they say these rates are for supplies beginning immediately while the Australian LNG would arrive in 2014.
‘Any LNG arriving at Dabhol will have to compete with Reliance Industries’ (eastern offshore KG-D6 field) gas that is priced at $4.2 per mmBtu (delivered rate of $6.67 per mmBtu),’ an official in the Petroleum Ministry said.
Compared to this, the imported cost of Qatar LNG would be $10.4 per mmBtu (at $80 a barrel oil price). After including import duty of 5 per cent, shipping cost, degasification, local levies and transportation charge, the delivered price would be $13 per mmBtu.
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Nepal to launch telecom projects to increase service coverage
Nepali government is preparing to introduce three telecom pilot projects for infrastructure sharing to increase telecommunication service coverage in rural areas.
According to Tuesday’s The Kathmandu Post daily, the plan comes at a time when telecom service operators have asked the government to introduce guidelines, for infrastructure sharing at the earliest, to speed up development in the telecommunication sector in a cost effective way.
This project which is aimed at building infrastructure enhancement and boosting telecom services through sharing will be carried out through grant assistance provided by the Asian Development Bank (ADB) under Information and Communication Technology Development Project to be completed by June 2014.
The government will spend $7 million provided by the ADB, according to Nepal Telecommunications Authority (NTA), the regulator of telecom sector.
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EXCLUSIVE
Japan’s Dai-ichi Mutual Life to float world’s biggest IPO
Japan's Dai-ichi Mutual Life Insurance Co is headed for a market capitalization of $15.5 billion after its April 1 initial public offering, the worlds biggest since Visa's in 2008.
Japan's second-biggest life insurer will be listed at the start of next month as it will be demutualised to become a joint stock company.
Facing a declining home market due to Japan's ageing and shrinking population, the company is raising funds for expansion, including in emerging Asian markets such as India, Thailand and Vietnam.
The Tokyo-based company on Tuesday set the offering price at 140,000 yen ($1,550), the middle of its previously announced tentative price range, for the 10 million shares, for a total of 1.4 trillion yen.
Of these, about 7.2 million shares will be released to retail investors, raising 1.01 trillion yen, or $11 billion, with some five million shares sold domestically and over two million overseas, the company said.
The remainder will be allotted to existing Dai-ichi policy-holders.
The IPO is set to be the world's largest since Visa's 19.7-billion-dollar offering in March 2008.
It will be Japan's biggest in more than a decade, since Nippon Telephone and Telegraph released shares in its mobile phone operator NTT DoCoMo in 1998, which came to 2.1 trillion yen.
Dai-ichi Mutual has decided to list the company, which is currently a mutual corporation owned by its eight million customers, so that it will be able to secure funds for investment in domestic and overseas operations.
'With funds obtained through the market, Dai-ichi can strengthen its health and pension insurance businesses,' said Masahiko Miwa, analyst at Moody's Japan. 'It will also be able to expand its business overseas. If Dai-ichi succeeds in taking advantage of the listing, its rivals may follow suit.'
The looming IPO has already created ripples at the Tokyo Stock Exchange, said Hirokazu Fujiki, analyst at Okasan Securities.
'Some investors have started selling their own shares to cash in for planned purchases of Dai-ichi, which may send overall prices down temporarily,' he said. 'But in the long run, the listing is expected to activate Japan's equity market and will have a positive impact on the entire Japanese economy.'
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WTO negotiators make little progress in trade talks
Scant progress has been made in talks for a global trade pact, top negotiators told World Trade Organization member states Monday, dampening hopes of a deal in the Doha Round soon.
Negotiators told senior officials meeting in Geneva to take stock of developments in the talks that ‘little progress has been made since the texts of December 2008,’ said WTO spokesman Keith Rockwell.
He was referring to the most recent set of documents used as a basis for negotiations between the 153 member states.
The inertia also meant that there was little chance that a ministerial meeting would be called soon to lend a final push for the conclusion of the round of talks launched nine years ago.
‘On the question of ministerial involvement, I do not see a big appetite in the immediate future,’ Rockwell told journalists.
He added however that countries involved were aware their current pace ‘if left unchanged will not bring us where we want to be.’
WTO chief Pascal Lamy invited senior trade representatives from member states to a five-day meeting, which began on Monday, to assess progress in negotiations.
He had warned in December that WTO member states risked missing the end 2010 target set by world leaders for the conclusion of a Doha deal unless there was a breakthrough by the end of the first quarter.
The round of negotiations for a trade liberalisation deal are primarily aimed at removing obstacles to trade for poor nations by cutting agriculture subsidies and tariffs on industrial goods.
Since they were launched in the Qatari capital Doha in November 2001, deadlines to conclude the talks have been repeatedly missed.
Discussions have been dogged by a range of disagreements, including on how much the United States and the European Union should reduce aid to their farmers and the extent to which developing countries such as India and China should lower tariffs.
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China slams Google’s bid to defy censors
The ‘Great Firewall of China’ appeared intact on Tuesday as the government lashed out at Google for refusing to bow to strict censorship in the world’s biggest internet market.
While angrily attacking Google, the authorities in Beijing said there should be no broader fallout on tense Sino-US ties provided there was no political meddling in the United States.
‘I don’t see it influencing Sino-US relations unless some people want to politicize it,’ foreign ministry spokesman Qin Gang told reporters, describing the Google situation as ‘mainly an individual commercial case’.
‘If you link this to China-US relations or politicize it, or even link it to China’s international image, this is mere overkill,’ Qin said, adding: ‘China’s market is fully open.’
Google said Monday it would no longer filter results on China-based Google.cn and was redirecting mainland Chinese users to an uncensored site in Hong Kong – effectively closing down the mainland site.
The announcement came after two months of tension sparked by Google’s revelation of coordinated cyber attacks on the Gmail accounts of Chinese dissidents. The firm had warned that it could leave the country altogether.
However, Google said it was ‘business as usual’ at its China headquarters on Tuesday, as a fierce debate erupted online between Chinese defenders of free speech and nationalist-minded netizens denouncing foreign interference.
Google spokeswoman Marsha Wang said she had no information about lay-offs or a possible transfer of staff to the US giant’s Hong Kong offices, saying only that ‘adjustments’ could be made ‘according to business demand’.
Despite Google’s promise of uncensored results, searches of politically sensitive key words generated the browser message ‘cannot display the web page’ — suggesting that China’s ‘Great Firewall’ of internet control remained erect.
The futile search results applied for terms such as ‘Falun Gong’, ‘Tibet riot’ and ‘June 4’ — referring to the pro-democracy protests in 1989 on Beijing’s Tiananmen Square.
Google’s top lawyer David Drummond said the firm hoped China would respect its decision ‘though we are well aware that it could at any time block access to our services’ and that the company would carefully monitor the situation.
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Rio trial in China moves behind closed doors
A Chinese court moved the highly sensitive trial of an Australian executive and three local employees of mining giant Rio Tinto behind closed doors on Tuesday to hear industrial espionage charges.
Stern Hu and three Chinese staff, whose trial on allegations of bribery and stealing trade secrets opened Monday, have admitted to taking money, defense lawyers say, but have contested several aspects of the charges.
The case is widely seen as a test of the rule of law in China and has raised concerns about the potential pitfalls of foreign companies doing business in the world’s third-largest economy.
China insisted Tuesday that the high-profile case was being handled in accordance with the law and that it was communicating with Australia, a key trade partner which is a major source of resources for its booming economy.
Hearings on Monday and Tuesday morning at the Shanghai court were dedicated to the bribery case but moved into a closed-door session in the afternoon, adding to questions about whether the men would get a fair trial.
‘The court declared that was the end of the proceedings related to bribery charges and that the session this afternoon would be related to the commercial secrets charges,’ said Australia’s consul general in Shanghai, Tom Connor.
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India launches Maharaja Train service
India has launched its most luxurious and expensive train service yet, seeking to attract well-heeled foreign rail enthusiasts prepared to pay the minimum $800-a-night price tag.
For most visitors, rail travel in India is an indispensable part of any holiday, although an ability to overlook the often filthy toilets and deal with basic comfort and crowded carriages is required.
The backers of the new service, which began its maiden journey from Kolkata to New Delhi on Saturday, have made every effort to ensure passengers get to see the country glide past the window with a minimum of inconvenience.
The specially built new train accommodates just 84 passengers, has suites with private bathrooms and plasma televisions, two restaurants serving Indian and Western food, a bar, card tables and an observation lounge.
‘It’s travel like royalty. You get treated like a king that’s the whole idea,’ promoter Thomas Thottathil told AFP.
Even the suspension has been designed to ensure a smooth ride on the sometimes rickety Indian lines and the 23 carriages have all been fitted with air conditioning and carpet throughout.
Prices start at $800 for the most basic deluxe cabin and rise up to $2,500 a night for the presidential suite — which occupies an entire carriage and includes two cabins with double beds and a toilet with a bathtub.
The new Express joins a fleet of other luxury trains plying India’s railway network, including the Deccan Odyssey in western Maharashtra, the Palace on Wheels in Rajasthan and the Golden Chariot in southern Karnataka.
India’s vast railway system, a legacy of British colonial rule, carries 18.5 million passengers every day in varying degrees of comfort — a basic ticket on a 24-hour journey from Kolkata to Delhi can cost as little as $10.
The advantage of the new service, say its promoters, is that the Maharajas’ Express will travel throughout India, whereas the other services are restricted to individual states.
Its first journey will be a week-long trip from Kolkata to New Delhi, via stops including the holy city of Varanasi and the Taj Mahal in Agra, but another itinerary will take it to the southwestern city of Mumbai.
One of its first passengers was Frederik Vermenlen, from the Netherlands, who has travelled across much of the world by train.
‘It’s a wonderful venture to show India in such a romantic fashion and with such modern comforts,’ he told AFP.
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NEWS IN FOCUS
Bill Gates, Toshiba in talks on small nuclear reactor
Company backed by Microsoft founder Bill Gates and Toshiba are in early talks to jointly develop a small nuclear reactor, the Japanese electronics giant said Tuesday.
The Nikkei business daily earlier reported that the two sides would team up to develop a compact next-generation reactor that can operate for up to 100 years without refueling to provide emission-free energy.
The daily said the joint development would focus on the Traveling-Wave Reactor (TWR), which consumes depleted uranium as fuel. Current light-water reactors require refueling every few years.
‘Toshiba has entered into preliminary talks with TerraPower,’ said Toshiba spokesman Keisuke Ohmori. ‘We are looking into the possibility of working together.’
Gates is the principal owner of TerraPower, an expert team based in the US state of Washington that is investigating ways to improve emission-free energy supply using small nuclear reactors.
Unlike the current reactors at mega power plants, the smaller types could be introduced by cities or states or in developing countries more easily.
Ohmori said Gates, together with other TerraPower executives, had visited a Toshiba laboratory for nuclear power research near Tokyo last year.
‘TerraPower is developing a small nuclear reactor and Toshiba is developing a different kind of small reactor. They were interested in Toshiba’s technology and aiming at practical realization’ of small reactors, he said.
Ohmori said the two sides had just begun to ‘exchange information’ but stressed that ‘nothing concrete has been decided on development or investment.’
Gates is expected to use his personal wealth to back the development of TWRs and his investment could reach several billion dollars, the Nikkei said.
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Greek crisis may hit US economy: Fed regional chief
The Greek debt crisis may directly affect the US economy by hitting American exports and the financial system, Atlanta Federal Reserve regional chief Dennis Lockhart warned Monday.
He said adjustments across the European Union to fiscal problems resulting from the Greek crisis could dampen eurozone growth and constrain US exports to that region.
The crisis could also lead to currency flows from the euro into ‘safe-haven’ US dollar assets, causing an appreciation of the greenback and hurting American export competitiveness, Lockhart said.
The European Union as a whole is the largest export market for the United States.
In addition, Lockhart said, the possibility that the Greek fiscal crisis might lead to a broad shock to financial markets ‘could play out in the banking system or in the form of a general retreat from sovereign debt.’
‘The Greek crisis might directly affect the US economy,’ warned Lockhart, the first US central bank official to clearly express such concerns.
He said that the possibilities he cited had not been factored into his outlook so far.
‘But developments around the Greek situation deserve rapt attention,’ he said.
The 16-nation eurozone is enduring the worst crisis in its history amid spiraling government debt levels, anaemic economic growth rates and rising social protest against austerity measures and high unemployment and the company were present on the occasion.
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