May 06 -12, 2002
US ECONOMY RECOVERS FROM LAST YEAR DOWNTURN
Treasury Secretary Paul O'Neill said on Wednesday
the US economy has fully recovered from last year's downturn and fears
that the US trade gap threatened global stability were overblown.
As he began testifying before the Senate Banking
Committee, O'Neill flatly warned he wasn't about to give currency
speculators any "ammunition" by implying any change was
forthcoming in the strong-dollar policy of the U.S.
His prepared testimony made no reference at all to
currency policy and also struck a generally upbeat tone about world
O'Neill said only speculators benefit from swings
in foreign-exchange values and "I don't want to give them any
ammunition to say that there's a basis for roiling the world currency
markets out of our conversation here this morning."
The US Treasury chief played down charges a huge
gap on the US current account — the broadest measure of trade —
left the country vulnerable to a sudden reversal in fortune and said
it reflected a productivity-driven US investment boom over the past
"I am convinced that the United States has
regained its economic footing," O'Neill told the hearing,
convened ostensibly to discuss a semiannual report from Treasury but
that pitted opponents of a strong US dollar against O'Neill.
Manufacturers charge that the strength of the
currency is costing Americans jobs because foreign producers are able
to sell their goods more cheaply into US markets.
Jerry Jasinowski, president of the National
Association of Manufacturers, told the committee there was no question
the dollar was "overvalued" in relation to other leading
world currencies. "This overvaluation is having a devastating
effect on US manufacturing and on jobs," he said.
IMF CALLS FOR SMALL BUSINESS LOANS
The International Monetary Fund boss says he wants
the World Bank to focus more on credit for small businesses.
The IMF Managing Director Horst Koehler was
speaking during a visit to the Ivory Coast capital Abidjan, the third
stop in a five country tour of Africa.
He says he will be raising the issue of what is
called micro-finance with the World Bank President James Wolfensohn
when he gets back to Washington.
Mr Koehler says he would like the International
Finance Corporation, the World Bank's arm for lending to the private
sector, to make more small loans.
Mr Koehler has been banging the drum for small
scale credit on a number of occasions during his African tour. It is a
bit of a departure from the IMF's traditional focus on encouraging
countries to achieve economic stability achieving low inflation and
strong government finances as a foundation for sustainable economic
Mr Koehler says that growth alone is not enough to
reduce poverty. He says policies need to be focused on poverty and
Much of Africa's poverty is concentrated in rural
areas. It can be hard for new businesses to get started in such an
environment. It is particularly difficult to raise loans for
investment, but Mr Koehler sees opportunities for small enterprises as
key to tackling poverty in Africa.
Much of Mr Koehler's tour has been about poverty
In 1999, the IMF and the World Bank adopted a new
approach to the developing world that explicitly emphasises poverty
reduction and participation in shaping the policy.
EUROZONE CONFIDENCE EDGES LOWER
Economic confidence in the eurozone weakened in
April from the previous month, surveys of both businesses and
consumers have shown.
Separately, statistics showed that the prices
charged by manufacturers in the eurozone fell in March from a year
But in the European Union (EU) as a whole, there
was more optimism to be found, according to the European Commission
The economic sentiment indicator for the 12
countries in the eurozone fell to 99.4 in April from 99.5 in March.
The fall was the first since November 2001.
Analysts had expected a rise to 99.7.
The same indicator for the 15 EU member countries
rose to 100 in April from 99.7 in March.
Other Commission surveys confirmed the weak outlook
in the eurozone countries.
Its business climate indicator fell to minus 0.64
in April from a revised March figure of minus 0.59.
US, CHINA DISCUSS SITUATION IN S. ASIA
The South Asian situation was among subjects
covered in talks between Chinese Vice-President Hu Jintao and United
Mr Hu, who is tipped to become China's next leader
and has been given unusual attention since he arrived earlier this
week, has had meetings with President George W. Bush, Vice-President
Richard Cheney and the foreign and defence secretaries.
State Department spokesman Richard Boucher told his
regular briefing on Wednesday that Mr Hu and Secretary Colin Powell
had met for a working dinner on Tuesday night and agreed to continue
"to advance in our cooperation against terrorism. There was a
very good discussion of the Middle East, South Asia...of how to
promote stability on the Korean Peninsula, including stressing the
importance of North-South dialogue".
Asked whether Kashmir was discussed, Mr Boucher
said the two sides talked about the "tensions between India and
Pakistan over Kashmir and the need and the desire of both our
countries to play a positive role in helping the parties defuse those
EUROZONE RATES LEFT UNCHANGED
Interest rates in the 12-nation eurozone have been
kept on hold, as expected.
In a statement, the European Central Bank said it
was holding its key rate at 3.25%.
Speaking at a news conference after the decision
was announced, bank president Wim Duisenberg said the eurozone's
economic outlook remained "subject to uncertainties" while
prospects for price stability were less favourable than at the end of
He said the uncertainties included the future
direction of oil prices and the US current account deficit, which he
said was a risk to the world economy and "over time...
US ALLOWS SHRIMP IMPORTS FROM 41 STATES
The United States said on Wednesday it had barred
shrimp imports from Haiti but authorized sales from 41 countries and
Hong Kong whose fishing practices it said posed no threat to sea
Shrimp from Haiti and other nations that harvest
shrimp in ways harmful to turtles are subject to an embargo,
consistent with the US legislation, the State Department said in a
The law requires that commercial shrimp boats use a
mechanism known as a "turtle excluder device," (TED) which
prevents the accidental deaths of already endangered sea turtles
snared in shrimping operations.
The department said shrimp boats from 17 nations
were found to have met the TED standard: Belize, Colombia, Costa Rica,
Ecuador, El Salvador, Guatemala, Guyana, Honduras, Mexico, Nicaragua,
Nigeria, Pakistan, Panama, Surinam, Thailand, Trinidad and Tobago, and
VODAFONE SHARES SLUMP
Shares in Vodafone, the UK mobile phone giant, slid
to less than £1 in pre-market trade on Friday, before recovering
slightly after the markets opened.
The latest fall came after the company cut its
forecasts for its German and Italian businesses.
Telecoms analysts had been expecting Vodafone's
profits from its German D2 and Italian Omnitel operations to be 6.5bn
euros (£4bn) this financial year.
UK HOUSE PRICES UP AGAIN
UK house prices rose by another 0.7% last month
from March, but the property boom is set to cool later this year,
according to the Halifax bank.
In its closely-watched monthly house price survey,
the country's biggest mortgage lender said UK property prices posted
"further significant gains" in April, with the average house
worth 15.1% more than it was one year earlier.
Volkswagen, has said its profits fell 20% during
the first three months of this year to 997m euros (£615m; $900m).
PLASTIC SPREE ADDS TO RATE RISE PRESSURE
Continued heavy spending on debit and credit cards
is adding to pressure for higher UK interest rates, according to a
report from the Credit Card Research Group (CCRG).
Total spending on plastic in March rose to
£16.8bn, 14.3% higher than the same period a year earlier, the CCRG
said on Friday.
The double-digit increase, which is in line with
growth estimates for January and February, makes it more likely that
the Bank of England will raise rates later this year in order to choke
off an inflationary consumer boom, the group said.
US WARNS JAPAN OVER 'BOXCAR' ECONOMY
The Japanese economy, the world's second largest,
risks becoming a "boxcar" on the global racetrack, US
Treasury Secretary Paul O'Neill has said.
Experts predict that, on current trends, Japan will
fall behind China in the global economic league, and claim an economy
one quarter the size of the US's, Mr O'Neill said.
"In 1991, the Japanese economy was nine time
the size of China's and three-fifths the size of the United
States'," he told a conference in New York.
Japan's fall would reduce its influence on the
"Japan will no longer be a engine for the
world economy, it will be a boxcar," he said.
US TRADE CHIEFS PROPOSE TIMBER TARIFFS
The US International Trade Commission has approved
import tariffs of up to 27.2% on Canadian timber imports, claiming
they threaten the domestic industry.
The unanimous ruling clears the way for the US to
impose punitive duties on softwood imports from Canada.
"The US International Trade Commission has
made affirmative threat determinations in connection with its final
phase countervailing duty and anti-dumping investigations concerning
softwood lumber from Canada," the US ITC said in a statement.
Canada denies it illegally subsidises domestic
forestry operations, and sells timber in the US below market value.
Canada is expected to appeal to North American
trade group Nafta and to the World Trade Organisation over the
Colt Telecom has defied sceptics over the future of
the new generation of telecom carriers by announcing a doubling in
Colt said that underlying profits hit £9.8m in the
first three months of the year, 111% more than the same period last
PACT TO END AFRICAN 'CHOCOLATE SLAVERY'
Chocolate manufacturers, human rights groups and
the Ivory Coast Government have signed pact aimed at ending the abuse
of child labour in the chocolate industry.
The agreement aims to address the use of children
in West Africa's cocoa fields, and measures designed to crack down on
mistreatment are set to be in place before the harvest season in
Imperial Tobacco has reported a 17% rise in
The group, whose British brands include Lambert
& Butler and Embassy, made a profit of £261m in the six months to
SOUTH KOREAN CAR SALES SOAR
South Korea's car industry has experience a
domestic sales boom helped by low interest rates, tax cuts and strong
Figures from Hyundai Motor, Kia, Renault Samsung
and Daewoo Motor showed domestic sales shot up 19.4% in April from a
year ago and up 7.7% from March to 152,040 units.
Only 1% of sales in the domestic market are foreign
"In terms of compact cars, Korean firms are
very strong and foreigners do not provide the products," Richard
Pyo of CSFB in Seoul told the BBC's World Business Report.
The figures are the best since August 1997, just
before the Asian financial crisis.
"There's a lot of pent up demand from the
financial crisis and a lot of new products coming onto the
market," he said.
Exports have also shown a strong rise, up 7.2% from April last