April 01 - 07, 2002
THREE US TEXTILE STATES
The governors of the three largest
textile-producing states in the United States have called for federal
action to stem rampant layoffs and plant closings they blame largely
on competition from cheaper Asian imports.
South Carolina Governor Jim Hodges, Georgia
Governor Roy Barnes and North Carolina Governor Mike Easley called on
Friday for aggressive enforcement of trade agreements and a cash
infusion from Washington to retrain laid-off workers who have been
losing their jobs as US consumers and merchants snap up Asian
Textile executives also blamed trade agreements
that they say favour foreign countries with cheap labour.
The comments were made at a small college campus in
Dallas, North Carolina during what was dubbed a "textile
summit." State officials were joined by about a dozen experts who
shared prescriptions to help the hemorraghing of the textile industry.
They called for more federal money to research new
textile technologies, guarantee bank loans to textile companies and
attract new industries to economically depressed areas.
"Every day, every month that we delay, another
plant closes and more jobs are lost," Easley said. "Equity
demands that the government act to help textile workers."
North Carolina, South Carolina and Georgia together
account for about two-thirds of the US textile work force. The
Carolinas have lost nearly 200,000 textile jobs since 1997, leaving
some rural counties with unemployment rates nearly triple the national
The governors acknowledged they have little control
over the industry's fate. But they said they hope to compel the Bush
administration to aid the struggling industry, just as it has helped
the steel and airline industries in recent months.
AID RETURNS TO ARGENTINA
Argentina has received its first financial
assistance since its economy went into full-scale meltdown late last
The Inter-American Development Bank, the biggest
lender for development purposes in Latin America and the Caribbean,
has redirected $694m (£487m)to Argentina to help the near-crippled
country rebuild its social services.
Officially, unemployment in Argentina is affecting
about a quarter of the workforce and nearly half the population is
regarded as below the poverty line.
The nightmare state of the country's books means
the government has had to quadruple some export taxes on commodities
to bring them in line with the plummet in the value of the peso.
With no money expected any time soon from the
International Monetary Fund, although a team is due in Buenos Aires
next week for talks, the IADB — an altogether separate institution
— said Argentina could wait no longer.
"Because of the precarious social conditions,
we can no longer delay making all possible resources available to the
population and in this way open spaces for relief and hope," said
IADB President Enrique Iglesias in a statement.
While the IADB money is peanuts compared to the
$25bn or so Argentina is hoping to raise from the International
Monetary Fund, it makes possible a vital $1bn social fund the
government is setting up.
The fund aims to:
Improve aid to destitute families, Provide
emergency medical and sanitation help, Payments to encourage parents
to keep their children in schools, and Rebuild social infrastructure
and housing in deprived areas.
The loan is desperately needed because Argentina
has been cut off from outside funds since it defaulted on $141bn in
external loans in December.
UK GROWTH BELOW TARGET
The service sector performed poorly in the last
quarter Economic growth in the UK in 2001 was slower than expected,
official figures show.
Gross domestic product (GDP) growth was 2.2%, lower
than the 2.4% predicted by government statisticians last month, and
below what chancellor Gordon Brown forecast in his pre-budget
The figures slipped below the government's target
range of 2.25 - 2.75%, on which it bases its plans for public spending
GDP growth for the final quarter of 2001 was
unchanged from the previous quarter at 1.6%, — the first time that
has happened in the UK for 10 years.
A single quarter of static growth does not mean the
UK is in recession. This is officially defined as two successive
quarters of declining output.
Growth levels were hit by a worse than expected
performance from the service sector, which accounts for 80% of the
US GROWTH REVISED UPWARDS
The US economy ended 2001 in much better shape than
previously feared despite fears of lasting damage from the events of
11 September, new numbers show.
And with two surveys in three days indicating that
consumers are ready to keep spending, economists are optimistic that
the start of 2002 could prove to be booming.
Growth in the economy was 1.7% during the last
three months of last year, the Commerce Department said.
The figures revise the earlier estimates, which
suggested first 0.2% then 1.4% growth in the quarter.
Growth for the whole year is now set at 1.2%, the
most sluggish performance in a decade.
But the fourth quarter now appears to have been the
best three-month period of the year, and a rapid turnaround from the
1.3% contraction seen between June and September.
JAPAN, CHINA TO SIGN SWAP ACCORD
Japan and China will sign a currency swap agreement
to avoid financial crises, news reports said on Saturday.
"Under the agreement, to be signed by the Bank
of Japan Governor Masaru Hayami and People's Bank of China Governor
Dai Xianglong ..., Tokyo will supply Beijing with yen in exchange for
yuan if China's balance of payments deteriorates sharply.
China will supply Japan with yuan for yen under
similar circumstances," the Nihon Keizai Shimbun newspaper said.
"The loan ceiling is equivalent to three
billion dollars," the report said, without citing sources.
RUSSIA OVERTAKES SAUDI ARABIA
IN OIL PRODUCTION
Russia has overtaken Saudi Arabia as the world's
number one oil producer for the first time since the 1980s,
highlighting the potential long-term challenge the country represents
to the mainly Arab oil cartel Opec.
Russia pumped 7.28 million barrels of oil a day in
February, compared to Saudi Arabia's 7.19 million barrels per day,
according to statistics just released by the Paris-based International
Energy Agency (IEA).
The two countries were neck and neck the month
Russia may not hold onto its position at the top of
the table for long, with the Saudi oil kingpin able to boost its
production by up to 50 per cent and Russian oil firms currently
pumping near full capacity. But the 11-member Organization of Oil
Exporting Countries, which has been locked in a battle of wills with
Russia since late last year to get it to support global oil prices by
cutting exports, has reason to be nervous.
EU DRAWS UP LIST TO RETALIATE
EU member states were on Friday examining a list of
US-made products that could be hit with hefty tariffs in retaliation
for the the Bush administration's decision to slap tariffs on imported
Copies of the list — drawn up by the European
Commission — have been given to the governments of the 15 EU member
states, the commission's trade spokesman Anthony Gooch said.
Gooch did not reveal the content of the list. But a
source familiar with the issue said it included textile products,
steel and citrus fruits.
If approved by the member states, the list will be
sent immediately to the World Trade Organization (WTO) in Geneva,
where the EU has already lodged a formal protest against the US move.
JAPAN, KOREA TO LAUNCH FREE
The South Korean and Japanese leaders on Friday
launched a study into setting up a free trade zone, but analysts
warned the single market dream was a long way off.
South Korean President Kim Dae-Jung and Japanese
Prime Minister Junichiro Koizumi announced the official launch of the
joint government study after a summit.
Industrialists in the two countries have been
pressing for moves toward a joint market with 170 million consumers
and gross domestic product totalling some five trillion dollars.
BP AND SINOPEC LAUNCH $2.7B
Oil titan BP and China's Sinopec Corp launched a
massive $2.7 billion petrochemical complex, hoping slumping product
prices would recover by 2005 when the plant goes into operation.
The complex, BP's largest single petrochemical
investment in the world, would begin pumping out 900,000 tonnes per
year (tpy) of ethylene long after the global petrochemical industry
emerged from the painful downturn of the past two years, executives
BP and Sinopec officials estimated China would
still need to import 40 per cent of its ethylene by 2005 — versus
about half now — boding well for the complex's ethylene-based
BP holds 50 per cent in the joint venture company,
Shanghai Secco, while Sinopec has 30 per cent and its subsidiary
Shanghai Petrochemical owns 20 per cent.
IMF APPROVES $365M LOAN FOR
The International Monetary Fund (IMF) has approved
in principle a $365m (£256.6m) loan to Ivory Coast to reduce poverty,
provided the government constrains public sector wage demands.
Acting IMF chair Anne Krueger said she was
encouraged by the government's discipline in macroeconomic management
and its commitment to free-market structural reforms.
But she warned wage demands by public sector
workers may adversely affect the implementation of the programme.
TURKEY AND GREECE SIGN PIPELINE DEAL
The Turkish and Greek governments have signed an
agreement to build a natural gas pipeline from east to west.
Once the 285-km pipeline is built, Turkey will
supply Greece with 500,000 cubic metres of gas a day.
Thursday's agreement is a sign of the strengthening
ties between two countries which were once fierce regional rivals and
have several times in the last few decades come close to war.
Goodjet, a new Swedish discount airline due to
start operations at the end of April, has said it expects to make a
profit in its first year in the air and might float on the stock
It will be the first Swedish low-cost carrier to
compete with SAS, the flag carrier of Sweden, Denmark and Norway.
GOLD RISES ABOVE $300
Gold prices have hit a seven-week high after a
surprise rally pushed it above the $300 an ounce barrier.
On Wednesday, gold prices drifted just below the
$300 mark until news of a further suicide bombing in Israel heightened
fears of fresh waves of violence in the region and drove the price
higher in US and Asian trade.
BROWN UNVEILS HELP FOR SMALL FIRMS
Chancellor of the Exchequer Gordon Brown is to
outline a package of measures designed to encourage the creation of
small businesses — especially in deprived areas.
He will signal, in a speech on Thursday to the
Transport and General Workers' Union's Manufacturing Matters
conference in Leeds, that wealth creation is central to government
It follows the announcement on Tuesday of up to
£1bn in tax breaks for big businesses, including a major tax credit
for research and development.
TAIWAN DENIES CHINA STEEL CHARGE
Taiwan's biggest steel producer has hotly denied
allegations by the People's Republic of China that it is dumping
cold-rolled steel at artificially cheap prices on the mainland market.
Beijing is concerned that with the US slapping
tariffs of up to 30% on steel to protect its own underperforming
firms, other countries could flood its market as they look for new
Russia, South Korea, Ukraine and Kazakhstan are
also under suspicion.
The worry is that the US's decision to ditch its
free-trade rhetoric and protect its own back yard will trigger new
tariff walls elsewhere.
Europe is already asking the WTO for permission to
impose its own "safeguards", in the fear that steel barred
from entering the US market will be redirected across the Atlantic.
SRI LANKA SUFFERS TRADE SLUMP
The government has published a pro-growth budget
Sri Lanka's trade deficit has narrowed sharply, as the economy
continued to shrink after contracting last year for the first time
since World War II.
The central bank said the deficit in January
narrowed to $131m (£92m) from $228m a year earlier, as imports
dropped and export rose slightly.
The government, which presented a growth-oriented
budget last week, expects the deficit to expand slightly for the whole
of 2002, to $1.25bn from 1.16bn in 2001.
AFRICA HONES PLANS TO ATTRACT
African leaders have agreed on an ambitious set of
yardsticks by which the continent can gauge its own performance on
good governance and economic reform.
The aim is to underpin the promises which
constitute Africa's side of the deal on the proposed "Marshall
Plan for Africa" — the New Partnership for Africa's Development
If the plan gets off the ground, the hope is to
generate $64bn in inward investment a year, boosting continent-wide
annual economic growth to 7%.
GERMAN BUSINESS CONFIDENCE GROWS
A key indicator of German business confidence has
raised hopes that Europe's largest economy has seen the worst of the
The business climate index prepared by Germany's
Ifo economics institute rose to a level of 91.8 this month, from 86.4
"Under normal conditions, the upswing should
set in now," said Ifo economist Gernot Nerb, although he
cautioned that more evidence was needed before making a firm
The index figure hit an eight-year low of 84.7 after the 11
September attacks on the US.