INTERNATIONAL

 

Apr 05 - 11 , 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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SARKOZY PLEDGES 'GROWTH AND JOBS'

New French Finance Minister Nicolas Sarkozy has vowed to boost growth and create jobs, in defiance of claims that reform may be allowed to slacken.
Mr Sarkozy was installed in France's finance, economy and industry ministry in last week's cabinet reshuffle, which critics say was not thorough enough. He is under pressure to meet his government's reform pledges to stimulate France's lacklustre economy. At the same time, France is exceeding EU rules on its budget deficit.

 

 

 

 

Mr Sarkozy's performance will be a key component in the government's struggle to rebound from a heavy defeat in regional elections last month. He won considerable popularity at the interior ministry, where he took a tough stance on law and order. He says he will bring the same toughness to economic policy.

"There are a couple of key words," he told his inauguration press conference.

"Everything will be done for economic growth and jobs," he said, adding that he would demand a "culture of results".

Mr Sarkozy's predecessor, Francis Mer, also promised to keep reforms moving quickly.

But his attempts to streamline the economy proved dramatically unpopular with trade unions, and caused widespread labour unrest.

Mr Sarkozy's pledge to support growth and jobs implies that he is likely to favour loosening the government's purse-strings. But France's fiscal freedom is constrained by the eurozone's Stability and Growth Pact, which limits the size of state budget deficits to 3% of gross domestic product.

CHINESE TRADE REFORM 'IS FAILING'

China has ceased to make any progress on free trade and remains unnecessarily bureaucratic, according to a US report.

In its annual report, the US Trade Representative conceded that China had made great strides since joining the World Trade Organisation (WTO) in 2001.

But deregulation has stopped and some Chinese officials are actively seeking ways to block trade, the report says.

Last year, the US had a trade deficit of $124bn (67bn) with to China, an issue of mounting political importance. US politicians say China has been competing unfairly on global markets, and has effectively been destroying American jobs.

China presents obstacles to commerce in many direct and indirect ways, the USTR charged. "In many sectors, import barriers, opaque and inconsistently applied legal provisions and limitations on foreign direct investment often combine to make it difficult for foreign firms to operate in China," the report said.

The problem, the USTR said, was cultural: Chinese bureaucrats cannot rid themselves of the habit of interfering in the economy.

In practical terms, this has often meant sheltering domestic firms from foreign competition, according to the report. US lobbyists are also concerned that the Chinese yuan is pegged against the dollar at a rate highly favourable to China's exporters.

The USTR said China had made serious progress on reducing tariffs, the most obvious barrier to trade. But most of this activity was concentrated in 2001-02, and current barriers are more subtle, the report added.

INDIA RECORDS DOUBLE DIGIT GROWTH

The best monsoon rains in a decade have helped India enjoy double digit economic growth.

The country's economy grew by 10.4% between October and December 2003, aided by a 16.9% rise in agricultural output, thanks to the monsoons.

India, Asia's third largest economy, saw manufacturing increase by 7.4% during the same third quarter period.

India's economy has grown steadily over the past year, a boost to the government in the election next month.

The Central Statistical Organisation's 10.4% Indian growth figure for October to December compared to the same quarter in 2002 is higher than China's 9.9%.

Agriculture accounts for almost a quarter of India's economy and employs more than 600 million people.

 

 

TURKISH ECONOMY BEATS FORECASTS

The Turkish economy grew more strongly than expected in 2003. Beating both official government targets and market forecasts, Turkey's gross domestic product (GDP) increased by 5.8% last year.

The figure for the fourth quarter which included the Istanbul bombings was an even stronger increase of 6.1%.

Analysts believe the Turkish economy will continue to grow and meet the government's 2004 target of 5%. The Turkish government had been hoping for an increase of 5.2% last year, as the economy recovered strongly from its 2001 recession and financial crisis that saw its economy contract by some 10%. Turkey's ongoing economic upturn driven by manufacturing, construction and exports comes as the government is receiving huge loans from the international community in return for a major commitment to restructure the state sector.

US PETROL PRICES HIT RECORD HIGHS

US petrol prices have reached all-time highs following an explosion and fire at a refinery in Texas.

The blaze at the BP plant in Texas saw the price of unleaded gasoline hit a record $1.7768 a gallon on the New York Mercantile Exchange.

US petrol prices were already high because of a lack of stocks and concern that Opec meeting will stick to plans to cut production. The fire is not believed to have been caused by "any outside influence". US unleaded gasoline's previous record high was $1.7750 in May 2001.

DOLLAR FALLS TO FOUR-YEAR YEN LOW

The US dollar has fallen to its lowest level against the yen in four years. After increased optimism in Japan at the turn of the financial year, the yen rose as far as 104.52 per dollar, its highest level since June 2000. The yen then fell back slightly on speculation that the Bank of Japan had intervened and sold off some of its stocks. But not before a number of exporters fell on Japan's Nikkei index. Last week in Tokyo it was down 64.38 points or 0.55% to 11,629.3. The Nikkei did however eventually recover to end up 0.19% or 21.71 points to 11.715.39.

BUSINESS SLAMS EU POLLUTION LAW

Business groups have claimed new European Union laws forcing polluting firms to pay clean-up costs will expose them to excessive claims.

The law holds polluters liable for damage caused to wildlife, natural habitats, and water resources.

European employers' lobby UNICE says the difficulty of estimating clean-up costs accurately could lead to offenders being overcharged.

REUTERS REPORTS MARKET SHARE SLIP

Business news and information provider Reuters has revealed it lost further market share last year.

The UK firm said its revenue share of the 6bn ($11bn) global financial information market had fallen two percentage points to 37% in 2003.

However, Reuters said it remained confident of winning back business with new products.

 

 

EAST-WEST MIGRATION 'IS A BOON'

Rich West European countries can only benefit by throwing open their borders to skilled immigrants, new economic research has indicated.

Economists Helena Marques and Hugh Metcalf have calculated the impact of east-west migration after EU expansion.

In a paper presented at Royal Economic Society meeting last week, they argue that Western wages and output will increase, not fall as many fear.

But Europe's poorer South stands to be the main loser, they warn.

EURO INTEREST RATE LEFT UNCHANGED

The interest rate for the 12-state eurozone has been kept on hold at 2% despite calls for reduced rates to help kick-start economic growth.

The European Central Bank (ECB) revealed its decision following a governing council meeting on April 1. Economists had expected the ECB to keep rates frozen this month but are expecting a cut later this year. There had been calls from some in the German business community to lower rates now in order to stimulate growth.

SHAKE-UP IN DOW JONES MEMBERSHIP

The US's premier share index, the Dow Jones Industrial Average, has changed its composition for the first time in five years.

American International, Pfizer and Verizon have been added to the index, replacing AT&T, Eastman Kodak and International Paper.

The Dow Jones which has been running since 1896 tracks the share movements of 30 companies. Changes to the widely-watched index reflect trends within the US economy.

Pfizer is the world's biggest drugs company, American International is the world's largest insurer and Verizon Communications formed by the merger of GTE and Bell Atlantic is one of the world's leading providers of landline and wireless communications.

BRITISH BUSINESS BATTERED BY SPAM

The rising tide of spam messages is starting to seriously inconvenience British businesses, a survey has found. It showed that almost 20% of companies reported that more than half of all the e-mail messages they received were unwanted junk e-mail.

Despite the growing problem, only a fifth of firms were taking active steps to filter the junk, said the report. The UK government survey is conducted every two years to see what UK firms regard as computer security threats.

Most people with an e-mail address are familiar with spam messages that offer all kinds of herbal cures, impotence drugs and other dodgy goods via e-mail.

DONORS FOCUS ON AFGHAN SECURITY

Urgent measures to improve security in Afghanistan are set to dominate the second day of an international donors' conference in Berlin.

Donors have already pledged $8.2bn (4.4bn) in aid over the next three years.

But a BBC correspondent in Berlin says the issue of security is casting a huge shadow over the conference.

The rising power of the drug warlords is a particular concern Afghanistan says it will boost co-operation with neighbours to fight drug trafficking.

President Hamid Karzai told delegates that drugs were undermining the "very existence" of his country.

JAPANESE RUSH TO BUY 3G MOBILES

Japanese mobile telephone company NTT DoCoMo has said more than three million people have signed up for its third-generation (3G) service.

More than one million users switched to the option in the past month.

DoCoMo launched the world's first 3G service in 2001, enabling callers to see each other and send video footage via their phones.

Its success is being watched closely in Europe where there has been huge investment in 3G services.

OPTIMISM AT 7-YEAR HIGH IN JAPAN

Business confidence in Japan is at its highest level for seven years, the Japanese central bank's latest quarterly survey has found. The Tankan survey revealed improved optimism in all major sectors of the Japanese economy. Business confidence among big manufacturers was at its strongest level since June 1997. The turnaround in the service sector was even more dramatic, showing the best mood since May 1992.

Japanese businesses have been nervous about the yen's strength against the weakened dollar, but the Tankan survey suggests such fears are receding.

Japan's service sector has languished in the doldrums for years as consumers have stubbornly ignored government efforts to persuade people to spend more money to boost Japan's listless economy.

UK COMPANIES ON ROAD TO RECOVERY

Further evidence that UK private companies have turned the corner has emerged.

Profitability is steadily increasing, with another period of growth since the turning point in late 2001.

Office of National Statistics figures show the net rate of return of private non-financial corporations was 12.8% in the fourth quarter of 2003.

The average profitability for 2003 was 12.3% compared with 11.4% in the previous year, according to the ONS.

UK'S EXPORT HOPE IN TRADE-BALANCE FALL

Britain's current trade deficit with the rest of the world reached 18.8bn in 2003, up from 17.8bn in 2002. The Office for National Statistics (ONS) said the quarterly deficit narrowed to 5.2bn, down from 6.3bn. And exports of goods rose for the first time in the year, and the yearly gap in manufactures declined slightly.

Separate figures from the ONS showed that the economy had grown by 2.2% in 2003, compared with an earlier figure of 2.3%.