people and infected about 8,000 others, brought much of
Asia to a near-standstill in the early months of last year. After a slow
start, a rapid international response brought the epidemic under control.
In a statement, the Asian Development Bank (ADB) held out a helping hand
to the 10 countries affected so far, in the hope of stemming the outbreak.
International technical expertise, equipment such as
protective clothing and surveillance and monitoring of public health are
all on offer.
As long as the risk could be confined to the scattered
rural areas it currently affects, said ADB assistant chief economist
Jean-Pierre Verbiest, the economic consequences may well be moderate.
"But if the flu creates a major travel scare as
was the case with Sars, tourism and other economic losses could reach tens
of billions of dollars," he said.
The role of chicken as a staple in the diet of much of
Asia would be threatened, Mr Verbiest said, pushing prices up and hitting
the budgets of the poor in particular.
The chicken exports industry could also grind to a
halt, freezing industries worth — for example — $1bn a year to
Thailand and up to $7bn a year to Indonesia.
US BUDGET DEFICIT REACHES $500BN
The US Federal budget deficit could reach $2.4 trillion
over the next 10 years, $1 trillion more than previously estimated,
official estimates said.
The non-partisan Congressional Budget Office (CBO) said
that rising spending on health and tax cuts would boost the gap between
tax revenue and spending.
This year the CBO projects a record budget deficit of
$477bn, falling to $365bn by 2005 as the economy improves.
President Bush says he will cut the deficit in half by
In his annual State of the Union address, Mr Bush
called on Congress to exercise spending restraint and promised to freeze
increases in non-defence spending and limit the overall budget increase to
Mr Bush will present his 2005 budget request to
Congress on 2 February.
But so far spending has been rising quickly, fuelled by
"pork-barrel" projects that Congressmen want for their own
districts, and the increased cost of the war on terror and the Iraqi
conflict, which was funded by an additional $87.5bn appropriation.
The new Medicare prescription drug benefit will also
add $400bn to spending over the next ten years.
And meanwhile tax receipts have been falling because of
the US recession and the big tax cuts passed by the Republican-controlled
Congress in 2001 and 2003.
The Bush administration says it is committed to
reducing the budget deficit, and vice-president Dick Cheney recently said
that it was "manageable."
But there is a growing scepticism by conservatives
within Mr Bush's own party about whether the president is committed to
limiting government spending.
GERMAN REFORMER SACKED BY BERLIN
The German government has sacked the head of Germany's
Federal Labour Office after a dispute over mismanagement.
Economy Minister Wolfgang Clement said the government
aimed to find a successor for Florian Gerster within four weeks.
The decision followed a vote of no confidence in Mr
Gerster by the office's supervisory board.
The vote followed accusations that Mr Gerster had
awarded multi-million-euro contracts without the required tender.
Mr Gerster has denied the accusation, concerning three
contracts, but German media reported recently that six more deals were
being called into question.
Mr Clement said: "I regret this vote. Florian
Gerster had, in a difficult economic period, taken on one of the most
challenging reform tasks and had made good progress."
UK'S ECONOMY ENJOYS RAPID GROWTH
Britain's economy expanded at its fastest rate in
almost three years during the final three months of 2003.
Fourth quarter GDP grew by 0.9% from the figure for the
previous quarter, official figures show.
The robust growth — together with strong December UK
retail sales — has raised the prospect of an interest rate rise next
month, analysts said.
Overall, the UK economy grew by 2.1% during 2003,
figures from the Office for National Statistics (ONS) showed.
NEW CHECK ON JAPANESE BAD DEBTS
Japan's banking watchdog is to cast a fresh eye over
the nation's biggest banks to check they can still withstand the burden of
their bad debts.
The check is the third in three years, as the
government tries to sort out the multi-trillion yen bad debt problem.
The concern is that some big borrowers may be in worse
financial health than the banks have admitted.
Earlier this week shares in several banks were hit hard
by rumours of an upcoming investigation.
UFJ, the smallest of Japan's Big Four banks, saw its
shares slide 12% on 26 January after rumours that it was to be singled
Heizo Takenaka, the technocrat Economics and Financial
Services Minister in charge of the clean-up, said a special team would
examine the books of borrowers as well as the banks' own records.
BROWN NEEDS '£10BN TAX INCREASE'
The chancellor will have to raise taxes by £10bn to
meet his fiscal targets, a leading think-tank has predicted.
The Institute for Fiscal Studies says that Mr Brown
would need to raise taxes by 2006 to prevent the budget deficit spiralling
out of control.
It warns that the budget deficit will still be £38bn
in 2006, £11bn more than the Treasury has predicted.
Under the government's "golden rule",
borrowing and current spending must balance out over the economic cycle.
Recently, Gordon Brown was forced to raise his public
sector deficit forecast for this fiscal year to £37bn, up from the £27bn
figure predicted in his Budget speech in April.
But the deficit could be even larger, as last month the
public sector net cash requirement (PSNCR) rocketed to £13bn, a new
record, leading to a total public debt of £36.1bn so far.
YUKOS BIDS TO PUSH MERGER THROUGH
Russian oil firm Yukos is trying to get its merger with
Sibneft back on track by forcing through corporate changes.
After a board meeting in London, Yukos said the merger
was "still fully in place", despite Sibneft shareholders trying
to torpedo the $11bn deal.
The group added its estranged merger partner had not
provided an acceptable divorce proposal.
SNOW HINDERS EUROPEAN TRANSPORT
Snowfall across large parts of western and northern
Europe has caused chaos on the roads and at airports.
The wintry weather forced the cancellation of hundreds
of flights in Germany, Denmark and Britain.
Belgium and Luxembourg faced road and rail delays,
though the snow also led to the opening of several downhill ski runs in
Belgium's southern hills.
The Franco-Belgian border was closed to lorries
overnight due to the bad weather but re-opened later.
MIXED RESULTS FOR US TECH NAMES
US personal computer maker Gateway saw its losses widen
in the last three months of 2003.
The group said losses had widened to $114.1m from $72m
in the same period last year.
Meanwhile, fellow technology firm, Canadian-owned
Nortel Networks posted its second consecutive rise in quarterly profits,
as its sales approached the $3bn mark.
The group reported net income of $499m, reversing a
loss of $168m a year earlier.
FUJITSU AND NEC BACK IN PROFIT
Three of Japan's big league consumer electronics firms
have posted financial results that appear to confirm the sector's toughest
times are over.
Chips-to-laptop makers NEC and Fujitsu both climbed
back to quarterly profit, while at Canon digital camera sales boosted
full-year profits by 45%.
NEC reported October to December net profits of 11.1bn
yen ($104m; £57m) against a loss of 4.5bn yen a year ago.
Fujitsu's quarterly profit was 7.6bn yen against a 24bn
yen loss in 2002.
THINK-TANK WARNING ON PUBLIC DEBT
Think-tank the National Institute of Economic and
Social Research has warned that the UK's public finances will stay in the
red for at least five years.
In its latest report it also says that Gordon Brown is
close to breaking his "golden rule" by running up substantial
deficits over the economic cycle.
TAX CUTS AHEAD OF SRI LANKA ELECTIONS
Sri Lanka's Finance Minister has announced populist tax
cuts to try to ease the cost of living ahead of provincial council
elections and possible general elections.
KN Choksy said a number of factors — including the
president's decision to take over three ministries in November — had had
disastrous effects on the economy.
Defending his performance in office, the minister said
he had inherited a shrinking economy.
INDIA RELAXES GOLD IMPORT RULES
India is to lift all restrictions on the import of gold
and silver as part of a wide range of economic reforms.
Gems and jewellery constitute almost 20% of India's
exports, and until now precious metals importers have had to use state
agencies for supplies.
The government said it was introducing the new rules
because they "could not wait" until after the election due in
the coming weeks.
BROWN PLEDGE ON EU RED TAPE
Chancellor Gordon Brown has unveiled plans to tackle
European red tape which he says is stifling business.
He has also pledged more cash for scientific research
and new awards for entrepreneurs.
The chancellor was speaking at the start of an
international enterprise conference in London, where guests include
Microsoft founder Bill Gates.
Mr Gates told delegates that the UK should innovate
more and not rely on shipping jobs overseas and cost cuts.
FED KEEPS INTEREST RATES ON HOLD
The Federal Reserve has voted to keep US interest rates
on hold for another month — the seventh in succession.
Analysts said the expected decision to maintain the
basic rate at 1% was further strengthened by flat monthly factory order
figures released recently.
The data showed that US manufacturing output remained
static during December, rather than the predicted rise.
Despite the recent weakening of the dollar, the Fed has
decided to keep its eye on aiding the economic recovery.
ASK JEEVES MAKES ITS FIRST PROFIT
Internet search engine Ask Jeeves has announced its
first ever annual profit.
The US firm made a global operating profit of $22m
(£12m) in 2003, compared to a loss of $5.4m in 2002.
Ask Jeeves' total revenue for the year came in at
$107.3m, a $42m increase on 2002's $65m figure, with monies coming from
placements and sponsorships.
SLUGGISH PS2 DENTS SONY PROFITS
Slow sales of games consoles and a poor performance at
the cinema box office have battered profits at Japan's Sony.
The electronics and entertainment group has unveiled a
20% fall in operating profit, to 159bn yen (£824m; $1.5bn) for the last
quarter of 2003.
Online retailer Amazon has announced its first ever
full-year profit. The American giant of Internet trading made a net profit
of $35.3m in 2003, compared to a loss of $149.1m in 2002.
CHINA AND INDIA SET TO OUTPERFORM
China and India will be among the three biggest
economies in the world by the middle of this century, researchers have
Helped by "robust" long-term growth, China
and India will hit the top three by 2050, according to New Delhi-based
RIS said China is currently the fastest-growing region
in the world, followed by South Asia.
But it added that reforms were needed to keep growth on
The think-tank said the South Asia region should forge
deeper trade alliances and upgrade its skills base in order to meet the
SUGAR SOURS AUSTRALIA TRADE TALKS
A row over sugar looks set to scupper plans for a
US-Australia trade deal.
The two nations — allies in the US-led war on Iraq
— have been working towards a comprehensive deal for months.
But Australia is determined that sugar, a vital
industry in the north of the state of Queensland, should be included.
And with elections at the end of this year, the Bush
administration wants to keep its own powerful sugar cane and sugar beet