INTERNATIONAL

 

Feb 07 - 13, 2005

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

 

BROWN IN 100PC DEBT RELIEF PLEDGE

The group of world's seven richest countries should offer poor countries 100% debt relief, UK Chancellor Gordon Brown has said.
Speaking at the World Economic Forum in Davos, Brown said he hoped to persuade his colleagues to commit to the goal by the end of the year.
His pledge has already won support from France's new Finance Minister, Herve Gaymard.
Brown also promised that the current round of trade talks would be the "first that is in the interest of developing countries".

 

 

In the forthcoming meeting of the G7 finance minister would put debt relief and development issues at the top of its agenda, Brown said, adding that this had been agreed with all the ministers from the world's richest countries.

The meeting will also be addressed by former South African President Nelson Mandela, who will argue the case for comprehensive debt relief.

Anti-poverty campaigners like rock star Bono and former president of Ireland Mary Robinson, now president of Oxfam International, praised the UK and French finance ministers, but warned that they would hold them to account at the end of the year.

Global Call to Action Against Poverty is supported by a wide range of organisations, from Action Aid and the All Africa Council of Churches to global trade unions and World Vision International.

The organisation even plans three action days this year to lobby G7 governments with peaceful demonstrations.

ARGENTINA, VENEZUELA IN OIL DEAL

Argentina and Venezuela have extended a food-for-oil deal, which helped the former to overcome a severe energy crisis last year.

Argentine President Nestor Kirchner and Venezuelan President Hugo Chavez signed the deal in Buenos Aires last week.

Last April, Argentina signed a $240m agreement to import Venezuelan fuel in exchange for agricultural goods and this deal has now been extended.

Venezuela will now import cattle, medicines and medical equipment.

Last year, Argentina's severe energy crisis forced President Kirchner to suspend gas exports to Chile. Argentina fears that rising demand could spark another crisis and wants to prevent it by signing this deal.

The two countries also formalised a co-operation deal between Venezuelan energy firm PDVSA and Argentina's Enarsa.

Under this deal, the Argentine market will be opened to Venezuelan investment.

President Chavez added that Brazil's Petrobras could join soon the co-operation deal.

President Chavez is an ardent promoter of the concept of a South American oil company, which could include the state-owned companies of Venezuela, Argentina, Brazil and Bolivia.

The two presidents also agreed to create Television Sur, a Latin American network of state-owned television channels.

RUSSIA GETS INVESTMENT BLESSING

Soaring oil sales and a budget surplus mean Russian debt is no longer a risky investment, one of the world's leading credit rating agencies says.

Standard & Poor's has classed Russian bonds as "investment grade", up from their former "speculative" rating.

Russia's reputation among investors has been hurt in recent months by the heavy tax bills and asset seizures imposed on companies such as oil giant Yukos.

S&P said the solidity of government finances outweighed the risk.

Russia is now a net creditor rather than a debtor. Gold and foreign currency reserves of $119bn beat its foreign public debt of some $113bn.

The other two major ratings agencies Fitch and Moody's have long since upped their rating of Russia's sovereign debt.

EUROPE SET TO EXTEND RATE FREEZE

The cost of borrowing money in Europe looks set to stay on hold when the European Central Bank (ECB) makes its decision on interest rates.

Most economists are expecting the ECB to keep rates at 2% for the 20th month in a row.

The standstill reflects slow European growth and high unemployment, most notably in the giant German economy.

But it contrasts sharply with the US, which increased rates for the sixth month in a row.

The quarter-point rise took US rates to 2.5%, and the Federal Reserve the US's central bank and rate-setting body promised more moves at a "measured pace" through 2005.

The target is expected to be 3.5%-4%, with future decisions trying neither to stifle growth currently running above 4% a year or fuel inflation.

CHINA DAM FIRM TO STOP SOME WORK

China's Three Gorges Project Corp has agreed to obey a state order and stop work on some construction sites amid environmental concerns.

The firm that runs the world's largest hydroelectric project had previously refused to stop construction.

Work will now stop at an underground power station, a supply unit on the Three Gorges Dam and a power station on its sister Xiluodu dam. The company had been threatened with fines if it continued construction.

Last week, China called for work to be suspended on 30 large-scale projects because they had failed to carry out proper environmental impact checks.

China's State Environmental Protection Administration (SEPA) said that all 30 projects "are in the midst of rectification".

MANUFACTURING RECOVERY 'SLOWING'

UK manufacturing grew at its slowest pace in one-and-a-half years in January, according to a survey.

The Chartered Institute of Purchasing and Supply (CIPS) said its purchasing manager index (PMI) fell to 51.8 from a revised 53.3 in December. But, despite missing forecasts of 53.7, the PMI number remained above 50 indicating expansion in the sector.

The CIPS said that the strong pound had dented exports while rising oil and metals prices had kept costs high.

The survey added that rising input prices and cooling demand had deterred factory managers from hiring new workers in an effort to cut costs.

That triggered the second successive monthly fall in the CIPS employment index to 48.3 - its lowest level since June 2003.

The survey is more upbeat than official figures which suggest that manufacturing is in recession but analysts said the survey did suggest that the manufacturing recovery was running out of steam.

AMAZON'S PROFITS FAIL TO IMPRESS

Shares in Amazon fell 13% in after-hours trading after the online retailer's latest profits fell below market expectations.

Although posting a 250% rise in net fourth quarter profits, up to $346.7m (184m) on a year earlier, this was boosted by a large one-off tax break.

FED INCREASES US INTEREST RATES

The Federal Reserve has raised US interest rates by a quarter of one percent to 2.5%, its sixth rise in succession since last June.

The increase was widely expected and in a statement following its two-day meeting, the Fed said the decision had been unanimous.

It added that it may continue to raise rates at a "measured pace" into 2005.

With the US economy now growing strongly, the Fed wants this growth to continue without seeing prices rise.

ROSNEFT DENIES CHINA YUGANSK LINK

 

 

Confusion about the role of Chinese banks in the sale of Russia's Yuganskneftegas deepened last week.

Russian state oil company Rosneft has denied that its $6bn (3.2bn) deal to supply oil to China is linked to its takeover of oil giant Yugansk.

Rosneft was responding to government comments that the Rosneft/China oil deal was payback for a $6bn Chinese loan used to pay for Yugansk. Russia's Ministry of Finance is now distancing itself from these comments.

NEWS CORP PROFITS GET MOVIE BOOST

Billionaire Rupert Murdoch's News Corp has reported an 80% jump in quarterly profit, boosted by demand for films on DVD and advertising on its TV channels.

Net income in the three months ending 31 December totalled $386m (205m) from $215m a year earlier. It also predicted that profits would rise in 2005.

FIVE MILLION GERMANS OUT OF WORK

Germany's unemployment figure rose above the psychologically important level of five million last month.

The German Federal Labour Agency said the jobless total had reached 5.037 million in January, which takes the jobless rate to 12.1%.

SUBSCRIBER GROWTH BOOST FOR BSKYB

Satellite TV firm BSkyB has reported a better-than-expected rise in subscriber numbers and strong profits growth.

BSkyB lifted its half-year profits to 250m ($470m) from 204m last year while revenues rose 10% to 1.9bn.

ETHIOPIA'S CROP PRODUCTION UP 24%

Ethiopia produced 14.27 million tonnes of crops in 2004, 24% higher than in 2003 and 21% more than the average of the past five years, a report says.

In 2003, crop production totalled 11.49 million tonnes, the joint report from the Food and Agriculture Organisation and the World Food Programme said.

Good rains, increased use of fertilizers and improved seeds contributed to the rise in production. Nevertheless, 2.2 million Ethiopians will still need emergency assistance.

TOYOTA'S PROFIT DRIVE CONTINUES

Profits at Japanese carmaker Toyota are rising despite pressure from a rising yen and more expensive raw materials.

The firm reported a net profit in the three months to December of 296.5bn yen ($2.85bn; 1.51bn), up 3.5% from 2003.

Toyota, the fourth-biggest car firm in the world, said sales rose 5.9%, with gains in market share worldwide.

RICE WARNS EU OVER CHINA ARMS BAN

US Secretary of State Condoleezza Rice has warned Europe against sending "the wrong signal" to China by ending an arms embargo on the country.

UK Foreign Secretary Jack Straw said last week the European Union could drop the embargo within six months.

It was imposed in 1989 after Chinese troops opened fire on protesters in Beijing's Tiananmen Square.

Washington has warned that if the blockade is lifted, China could embark on an arms-buying spree.

The US fears any weapons it buys could be used to threaten Taiwan, which Beijing considers as a renegade province of China.

The EU decided in December against lifting the embargo immediately, but the proposal is still under discussion. France and Germany, both major arms exporters, back the move to lift sanctions.

ADVERTISING REVENUE BOOSTS GOOGLE

Google has thanked strong advertising revenues over the Christmas period for a seven-fold rise in quarterly profits.

The world's most popular Internet search engine achieved net profits of $204.1m (108m) in the three months to December.

MEXICAN EMIGRANTS SEND $16BN HOME

Mexican labourers living in the US sent a record $16.6bn (8.82bn) home last year.

The Bank of Mexico said that remittances grew 24% last year and now represent the country's second-biggest source of income after oil.

Better records and greater prosperity of Mexican expatriates in the US are the main reasons behind the increase.

About 10 million Mexicans live in the US, where there are 16 million citizens of Mexican origin.

Remittances now represent more than 2% of the country's GDP, according to the Bank of Mexico's figures.

BMW TO RECALL FAULTY DIESEL CARS

BMW is to recall all cars equipped with a faulty diesel fuel-injection pump supplied by parts maker Robert Bosch.

The company said the faulty part does not represent a safety risk and the recall only affects pumps made in December and January.

BMW added that it was too early to say how many cars were affected or how much the recall would cost.

WTO BOSS PUSHES FOR TRADE DEAL

The much-delayed deal to liberalise global trade could be struck by the end of 2006, the director general of the World Trade Organisation (WTO) has said.

Speaking on the sidelines of the World Economic Forum in Davos last week, Supachai Panitchpakdi urged countries to work "as hard as possible" and give clear commitments by the summer.

The so-called Doha round of trade talks has been dead-locked for years, with industrialised and developing countries squabbling mainly over subsidies and tariff barriers for agricultural products.

A summit of the 148 WTO members in Hong Kong in December is supposed to agree a draft deal, but many observers believe that a breakthrough is unlikely before 2007.