INTERNATIONAL

 

Jan 26 - Feb 01 , 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF


BRITAIN GOES DEEPER INTO THE RED

UK government borrowing has hit its highest monthly level since records began, according to official figures. The public sector net cash requirement (PSNCR) rocketed to 13bn in December, up from 11.6bn in the previous year. This shows the biggest monthly PSNCR since records started in 1984, the Office for National Statistics said.
Accelerating public spending and lower than hoped for tax receipts are proving a headache for Chancellor Gordon Brown as he battles to balance the budget. Recently,

 

 

 

 

Gordon Brown was forced to raise his public sector deficit forecast for the fiscal year to 37bn, up from 27bn figure predicted in his Budget speech in April. And the government has already accumulated a public debt of 36.1bn so far during the current financial year, the ONS revealed.

However, January and February are traditionally months when some public debts are repaid, so the 37bn forecast could still be met. The chancellor has been forced to borrow more money to back Labour's pledge to pour billions of pounds into ailing public services, particularly schools and hospitals.

Publicly, the Mr Brown has remained upbeat about his ability to meet his "golden rule" of balancing the budget over the economic cycle, but some economists may opt to doubt the certainty of the "prudent" chancellor. Michael Hume, economist at Lehman Brothers, described the PSNB figures as "pretty grim". "Although the December figures look OK, the November revisions are pretty drastic and not good news for the chancellor at all.

"We're getting to that point now where the chancellor is going to come under pressure from outside opinion that his fiscal rules are not going to be met."

WHO WARNS OF MORE LETHAL BIRD FLU

The World Health Organization fears that the bird flu which has broken out in several Asian countries could mutate and become more dangerous.

WHO spokesman Bob Dietz said in Vietnam that it could become more of a threat to humans as it spreads. Bird flu has killed five people in Vietnam and infected millions of chickens across Asia. Thai Prime Minister Thaksin Shinawatra said it was "highly likely" that people had caught the disease in his country.

He said test results from five suspected cases would be announced soon.

Japan has suspended imports of chicken from Thailand.

Cases of the disease have been detected in Japan, Taiwan, South Korea and Vietnam.

Humans who have caught bird flu are thought to have been directly infected by live chickens. Only a small number of people have so far been infected.

But scientists worry about the possibility of human-to-human transmission, the BBC's Kylie Morris reports from Bangkok.

Japan suspended imports of Thai chickens following news that three people in Thailand were being tested for bird flu.

Critics accused the Thai Government of a cover-up when it suggested that an illness which sparked the recent cull of a million chickens was not bird flu, but chicken cholera or bronchitis.The public health ministry acknowledged it was investigating whether a number of people including a seven-year-old boy and a chicken farmer could be suffering the human form of the disease, virus subtype H5N1.

BIRD FLU FEARS STALK THAI ECONOMY

Thailand's poultry industry stands to lose at least $2.6bn if the country's chickens have caught avian flu, the deputy agriculture minister has said.

Japan has suspended imports of Thai chickens as a precaution while the Thai authorities investigate. Stocks in chicken exporters fell steeply on the Bangkok stock market after news of the ban. About 60% of Thailand's chicken exports go to Japan but this accounts for only one third of Japan's imports. Thailand is one of the world's top five poultry exporters.

"If we find this disease in Thailand, the chicken industry in Thailand will collapse immediately," Deputy Agriculture Minister Newin Chidchob said.

Stocks in poultry exporters were among the heaviest fallers on the Bangkok stock market.

DAVOS HEARS ANTI-CORRUPTION PLEA

Rebuilding Iraq, improving relations between Muslim nations and the West and fighting corporate corruption topped the Davos agenda Jan 22.

US Attorney General John Ashcroft said his country was "winning the war on terrorism" but that corruption remained a threat to democracy.

Pakistan's President Pervez Musharraf. called for "enlightened moderation" between Islam and the West.

His call echoed the Iranian president's opening plea for "genuine dialogue".

The links between fighting corruption, battling poverty and promoting democracy formed the major theme of the US Attorney General's blue-print for a more peaceful world.

EUROZONE RECOVERY 'AT RISK'

The economic recovery in continental Europe is "distinctly weak" and could easily be wrecked should the euro continue to rise, the Organisation for Economic Cooperation and Development (OECD) has warned.

In contrast, growth in the United States should "remain very strong," said the OECD's chief economist, Jean-Philippe Cotis, at the World Economic Forum in Davos.

He called on eurozone countries and the European Central Bank (ECB) to "take every possible action to boost the recovery" appreciate if the dollar got ever weaker.

And he chided the West's six largest economies the United States, Japan, France, Germany, Italy and the UK for failing to keep their budgets under control.

Mr Cotis said the global economy found itself in a very unusual situation.

CHINA'S GROWTH HITS SIX-YEAR HIGH

China's economy grew at its fastest pace for six years in 2003, adding 9.1% to gross domestic product, official statistics have shown.

The growth rate in the final three months of last year was even more rapid, up 9.9%.

China's strong performance was due to growth in trade, foreign investment, and consumer spending. Chinese officials are predicting a cautious 7% growth in 2004, a figure most economists expect to be beaten. China's performance makes it the fastest growing among the world's major economies, outpacing the United States and far ahead of sluggish Japan.

 

 

KODAK CUTS 15,000 JOBS WORLDWIDE

Photography giant Eastman Kodak is to slash up to 15,000 jobs worldwide over the next three years.

BLACK SETS ASIDE $60M IN TAKEOVER

Press magnate Lord Black has agreed to set aside $60m (32.7m) to meet possible liabilities as part of his agreement to sell Hollinger Inc.

It is part of conditions of the $466.5m takeover bid by the Barclay brothers. Hollinger Inc. owns 30.3% of the equity and 72.6% of the voting control of Hollinger International, which owns the Daily Telegraph and other newspapers.

FORD SEES BIG INCREASE IN LOSSES

Ford has reported a $793m (430m) loss for the fourth quarter of 2003, after it was hit by the cost of job cuts in Europe and a new supply deal. For 2003 as a whole, Ford said earnings totalled $495m (268m).

OBESITY COST US $75BN: STUDY

A new study says that obesity cost the United States $75bn (40bn) last year.

The study by the Centre for Disease Control and Prevention found that more than half that amount nearly $40bn (21bn) came out of public taxes.

The researchers say these figures show that urgent action needs to be taken to reduce the number of dangerously overweight people.

NEW EVIDENCE HALTS 9/11 VERDICT

A German court has agreed to allow a new prosecution witness in the trial of an 11 September suspect which appeared to have all but crumbled last month. The dramatic move has delayed the verdict in the case of Abdelghani Mzoudi which was expected this week.

Mr Mzoudi, 31, is accused of being an accessory to the murder of more than 3,000 in the 2001 attacks on America and membership of a terrorist group.

The Moroccan national was freed after new evidence cast doubt over the case.

US PONDERS PLASTIC BAG TRADE WAR

The US government has warned that it is considering imposing anti-dumping tariffs on Asian plastic bag makers. The US Commerce Department has said it may impose tariffs of up to 123% on Chinese, Malaysian, and Thai plastic shopping bag producers.

The Commerce Department said it would continue its investigation and reach a final decision in June. The US imported about 100 billion plastic bags in 2002, worth more than $127m, and China supplied about 30%.

MCDONALD'S WIDOW'S WHOPPER GIFT

The widow of the man who founded fast-food restaurant chain McDonald's has left $1.5bn (820m) in her will to the Salvation Army. Joan Kroc's gift is thought to be the biggest ever given to a single charitable organisation.

Mrs Kroc left the money on condition that the Salvation Army uses her burger bar fortune to build community sports centres for working class children. She has asked the Salvation Army to build more than 25 centres in the US.

ONLINE AUCTION SITE CLICKS AGAIN

Online auctioneer eBay has reported a quarterly net profit rise of almost 64% in a strong period of sales listings.

The San Jose, California-based firm posted fourth-quarter net profit of $142.5($77m), up from $87m a year ago. Chief finance officer Rajiv Dutta said eBay planned to continue investing internationally in countries like China, and developing new products.

 

 

MASS PANIC GRIPS ZIMBABWE BANKS

Hundreds of Zimbabweans have besieged several new banks to withdraw their money amid rumours they are going bust. The panic follows a crackdown on alleged corruption in financial institutions, which has left at least six banks in serious trouble.

TOURIST SURGE CUTS HK JOBLESS

Unemployment in Hong Kong has dropped to its lowest level for almost a year as wave of tourism repairs the economic damage done by the deadly Sars virus. Joblessness fell to 7.3% between October and December, down from 7.5% in the previous three months, official figures showed. Unemployment hit a record 8.7% in the May-to-July period, after Sars kept visitors away from hotels and shops.

STRIKE HITS FRENCH RAIL COMMUTERS

A strike by railway workers in France has brought disruption to commuter train services around Paris last week. High speed train services and the Eurostar link between London and Paris have been less severely affected.

GM PREDICTS STRONGER CAR MARKET

Detroit legend General Motors (GM) has unveiled a slump in profits at its core car production arm.

The company said its car division earned $396m (218m) in the final three months of 2003, down by 24% on the same period one year earlier. Overall earnings came in little changed at $1bn, thanks mainly to record profits from GM's GMAC finance unit, which specialises in mortgage lending.

BANK VOTED 8-1 FOR RATE FREEZE

The Bank of England voted decisively against a rise in interest rates during this month's Monetary Policy Committee (MPC) meeting, it has been revealed. Released minutes show the decision to keep rates on hold at 3.75% was reached by a majority of eight to one.

OECD WARNS ON UK BUDGET DEFICIT

The rising UK budget deficit may force the government to raise taxes or slow the rise in public spending.

The warning comes from the influential Organisation for Economic Cooperation and Development (OECD), the think tank for the world's richest countries. The OECD says that its projections suggest "the need for further fiscal action" to avoid "diminishing the credibility of the fiscal framework". The chancellor hopes faster economic growth will reduce the deficit. But the OECD says that the UK budget deficit will exceed the limit set by countries in the eurozone of 3% of GDP by 2005.

UK INFLATION REMAINS UNCHANGED

Britain's annual inflation rate remained steady in December, defying expectations of a fall.

The government's preferred consumer prices index (CPI) measure remained unchanged from November's figure of 1.3%, official figures showed.

FINANCE MINISTERS FRET OVER EURO

European finance ministers have banded together with the European Central Bank to voice their fears that the euro is getting too strong, too fast. A joint statement released at a meeting of the 12 eurozone finance chiefs last week warned of the risk to economic growth by the euro's volatility. "We particularly stress stability and we are concerned about excessive exchange rate moves," they said.