INTERNATIONAL

 

 Apr 04 - 10, 2005

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

 

WOLFOWITZ SETS AFRICA POVERTY AIM

Paul Wolfowitz, the new head of the World Bank, has said his main goal will be to achieve "real success" in cutting poverty, particularly in Africa.
Mr Wolfowitz was confirmed as the new head of the World Bank last Thursday after winning crucial European support.
He told the BBC that poverty reduction would be the "primary mission" of the Bank under his leadership.
His nomination had proved controversial given his role in the Iraq war and lack of development experience.

 

 

The US deputy defence secretary said he wanted his legacy to be "real success in reducing poverty especially in Africa, the continent which most desperately needs it".

"I am prepared to listen and prepared to be an international civil servant," he said.

Mr Wolfowitz, 61, who will take over at the World Bank from June 1, 2005, denied that he would use his position to push broader US foreign policy objectives such as spreading democracy and free markets.

"The fact is that when it comes to poverty reduction, it is not a question of British foreign policy, or US foreign policy or South African foreign policy. It [poverty reduction] is a unifying goal and it is one that I believe in deeply."

"Each organisation has to focus on its main mission and its core competence and the World Bank's is poverty reduction."

Despite early opposition to his nomination, the directors of the Bank, representing 184 countries, unanimously approved Mr Wolfowitz as the organisation's 10th president.

JAPANESE BUSINESS LESS CONFIDENT

Business confidence among Japanese companies has fallen sharply over the past quarter as the economy's recovery stuttered, according to new data.

The Bank of Japan's influential tankan report showed a decline in optimism among firms in March on concerns about weaker exports and high oil prices.

Analysts said the figures were worrying but pointed to the fact that firms think capital investment will rise.

Japan suffered a mild recession in the middle of last year.

Despite seeing two successive quarters of negative growth in 2004, the Japanese government insists that its economy which stagnated for much of the 1990s is gradually recovering.

The quarterly tankan report adds up the number of firms seeing favourable compared to unfavourable trading conditions.

In March, the headline index for large manufacturers slipped to plus 14 from plus 22 in December.

Experts had been forecasting a rise in the index to plus 23.

"It's very bad," said Azusa Kato, an economist with BNP Paribas.

"We had thought that the inventory adjustment in the electronics sector was nearly finished but perhaps conditions are worse than we expected."

A slew of poor data in recent weeks has raised questions about the sustainability of the Japanese economic recovery.

Unemployment rose unexpectedly in March while retail sales and household spending fell.

Despite the latest figures, ministers said there was no reason to panic.

"The economy on the whole is in consolidation," said economic minister Heizo Takenaka. "The figures generally underscore a recovery trend."

ECONOMY FOCUS FOR UK ELECTION BATTLE

Britain's economic future will be at the heart of Labour's poll campaign, Chancellor Gordon Brown has said.

He was speaking after Cabinet members held their last meeting at No 10 before the expected election announcement.

He said voters would recognise that Labour had brought stability and growth, and would continue to do so.

Meanwhile, the Tories outlined their plans to tackle "yob culture" and the Lib Dems gave more details about their proposals to replace council tax.

Earlier the Archbishop of Canterbury wrote to all three parties urging them not to fight the election by exploiting people's fears.

In an open letter, he called on them not to turn the election into a competition about who can most effectively frighten voters about terrorism, asylum, and crime.

BRAZIL QUITS LOAN ACCORD WITH IMF

Brazil has announced it will not renew a $41.75bn (22bn) loan accord with the International Monetary Fund (IMF).

Brazil's improved fiscal performance had reduced its vulnerability to shocks on global markets, reducing its need for IMF support, the government said.

The IMF backed the move, and called on Brazil to use high interest rates and spending cuts to stabilize its economy.

Brazil approached the IMF in 1998, shortly before a currency devaluation caused the country's debt load to soar.

Brazil's current loan accord with the IMF expires at the end of March.

The decision not to renew the loan accord was the result of

Brazil's commitment to spending cuts and orthodox fiscal policies, President Luiz Inacio Lula da Silva said.

SMALL SHOPS BRACED FOR RATE RISES

Small retailers in England could face an uphill struggle to cope with dramatic increases in business rates, a business organisation has said.

More than 1.5 million companies are set to receive their business rate bills in the next few days.

But the Federation of Small Businesses (FSB) is warning that all companies will face sharp rises this year, with an average increase of 15.7%.

It says shop owners in the south-east of England will be hardest hit.

Business rates are the second or third highest item of expenditure for most small firms. Rateable valuations take place every five or six years.

Currently rates are five times more expensive as a proportion of turnover than they are for large companies, according to the FSB.

EU PROPOSES 15% DUTY ON US GOODS

The European Commission has proposed sanctions on a range of US goods as punishment for the US failure to repeal the Byrd Amendment anti-dumping law.

The Byrd Amendment permits US firms to benefit from anti-dumping fees gained from foreign companies considered to be selling items too cheaply.

The World Trade Organisation ruled it illegal more than a year ago.

The Commission said US paper, farm goods, textiles and machinery would face an extra 15% duty from May 1.

The Commission has acted in concert with seven other countries which have also protested to the WTO about the Byrd Amendment. It said it was expecting Japan, South Korea and Brazil to impose similar penalties soon.

WORLD BANK BACKS LAOS DAM PROJECT

The World Bank has agreed to back a controversial hydroelectric dam project in Laos, one of the poorest countries in South East Asia.

At its board meeting in Washington, the bank said it would provide loans and guarantees for the $1.2bn project.

The decision comes after nearly 10 years of discussions with the Laos government.

But critics say the environmental and social costs of the dam, called Nam Theun 2, are far too high.

 

 

Laos is a poor, landlocked country which has few viable industries. But it does have plenty of mountains and rivers, and that is why it is pinning its hopes for the future on hydroelectric power.

Nam Theun 2 is the country's largest dam project, on a tributary of the mighty Mekong.

MERCEDES RECALLS 1.3 MILLION CARS

German luxury carmaker Mercedes has recalled 1.3m vehicles as part of what it says is a bid to improve quality.

Analysts said the move is likely to cost many millions of euros, and the firm already has warned that efforts to improve its product would hit profits.

The company will look to fix problems with batteries, alternators and brakes on a number of models made since 2001.

A slump in profitability at Mercedes has been acting as a drag on earnings at US-German parent DaimlerChrysler.

GERMAN UNEMPLOYMENT KEEPS RISING

German unemployment hit a post-war high in March after cold weather deterred many firms from hiring workers.

The number of people out of work increased by 92,000 to 4.97 million, according to seasonally adjusted figures from the Federal Labour Office.

That pushed Germany's jobless rate to 12%, compared with about 5% in the UK and the US.

The non-seasonally adjusted figure stayed above the 5 million level, falling by 41,000 to 5.176 million.

CHINA BANKS TOLD TO ACT ON FRAUD

Regulators have told Chinese banks to improve their management and tighten internal controls to combat the growing cases of fraud and mismanagement.

A former Bank of China employee was arrested recently in connection with the alleged embezzlement of $6m, one in a series of recent incidents.

Zhai Changping, who worked as a bank clerk in the city of Dalian, was seized in the north-east of the country.

China's banking sector has been beset by cases of fraud in recent times. Regulators have told firms to tighten their lending procedures.

INTERNET LINKS LIFT CHINA TELECOM

China's largest fixed line phone operator has reported forecast-beating full year profits after almost doubling its broadband subscriber numbers.

China Telecom posted 2004 net profits of 28.02bn yuan ($3.39bn; 1.80bn), compared with a restated 13.88bn yuan in the previous year.

Revenues were 161.21bn yuan, up from 151.55bn yuan in 2003.

Internet services contributed 14.11bn yuan to revenues, and the firm expects broadband to add to profits in 2005.

POOR RAINFALL HURTS INDIAN GROWTH

India has reported its slowest economic growth for six quarters after poor monsoon rains hurt agriculture, one of its largest sectors.

The country's economy grew 6.2% in the three months to the end of December 2004, compared with a rise of 6.6% in the previous quarter.

Farming accounts for 22% of India's economy and the second lowest rainfall for 17 years damaged harvests.

LATAMS RALLY WTO IN EU TARIFF ROW

Latin American banana producers are calling on the World Trade Organisation (WTO) to intervene in a long-running row over banana tariffs.

The producers are vehemently against plans by the European Union (EU) to replace the current quota system.

At the moment, Latin American exports to the EU are limited but the duty per tonne never exceeds 75 euros.

TELEFONICA WINS CZECH TENDER BID

Spanish telecommunications company Telefonica has outbid its rivals to win a tender for a controlling 51% stake in Czech phone firm Cesky Telecom.

Telefonica successfully offered 82.62bn koruna ($3.57bn; 1.9bn) for Cesky, which is being privatised by the Czech government.

HOUSE PRICE DIP 'WORST IN DECADE'

House prices have experienced their biggest monthly fall in almost 10 years, the Nationwide has said.

Prices fell 0.6% in March, the biggest drop since June 1995.

As a result annual house price growth dipped to 7.9% the first time the yearly growth rate has fallen below 10% since 2001.

The building society said that, despite the drop, the figures confirmed its view that the UK housing market "is experiencing a soft landing".

It forecast mortgage approvals would "bounce back" to about 84,000, indicating a pick-up in activity, after slipping to 798,000 in January from 82,000 in December.

INDIA TRADERS PROTEST AT VAT PLAN

Shops and businesses across India have shut down last week as traders begin a protest against a new value-added tax.

The VAT system begins on 1 April and aims to widen the tax net to help to cover India's spending shortfall.

The goal is to simplify the present system for manufacturers, traders and consumers, getting rid of a wide variety of add on tariffs. But traders say it will increased their paperwork while forcing them to pay more taxes.

EUROTUNNEL

Channel Tunnel operator Eurotunnel plans to spend eight months talking to creditors about its 6.2bn ($11.6bn) debt, following a Paris board meeting.

ABN AMRO UNVEILS ITALIAN BANK BID

Dutch bank ABN Amro is to launch a 6.3bn euro ($8.1bn; 4.3bn) bid for Italian counterpart Banca Antonveneta.

The takeover offer comes hot on the heels of Spanish bank BBVA's 6.4bn euro bid for Italian firm Banca Nazionale del Lavoro, announced last Tuesday.

Both takeover approaches will challenge Italy's longstanding desire to keep control of banks in domestic hands.

If approved by regulators and shareholders, the Antonveneta deal will create Europe's ninth largest bank.

US CONSUMER CONFIDENCE DOWN AGAIN

Consumer confidence in the US has fallen for the second month in a row, the latest figures show.

The consumer confidence index for March dropped two points to 102.4, down from a revised 104.4 in February, said the New York-based Conference Board.

The decline in confidence was blamed on increases to gasoline (petrol) prices.

Analysts had been expecting a reading of 103, but Lynn Franco, director of the organisation's consumer research centre, said consumers remained upbeat.

UK SPENDING SLOWDOWN HITS RETAILERS

UK retail sales fell at their fastest pace for six months in March as bad weather and jitters ahead of the recent Budget hit trading, the CBI says.

In its latest distributive trades survey 31% of retailers said sales volumes were up in March, while 40% said they were down on the year.

The balance of -9% is a sharp reversal from the +2% balance seen last month.

Despite forecasts for a modest rebound, the CBI said sales for the time of year were their worst since November 1992.