Pressing for a joint world aid plan, he argued
Africa was the only continent to "go backwards" over the
last 30 years.
This is the final phase of talks before the G8
industrialised nations meet at Gleneagles in Scotland. The UK is
currently president of the G8 group and will chair the summit.
Mr Blair will also visit the US, Russia, France and
He will also hold talks via a video link with
Canada and Japan.
The trip comes as environmentalists said an alleged
leaked document showed real action on climate change was being blocked
by the US.
EU development ministers this week agreed to double
aid to poorer nations. Under the deal, the EU's aid will be worth an
extra £14bn annually in five years' time.
Some Italian opposition politicians question
whether the country's financial problems will mean its target will be
But Mr Berlusconi said: "I have assured Mr
Blair of my personal support and my country's support in favour of
what I know is going to be a very reasonable, sound and viable set of
Mr Blair said Africa's plight had been on the G8
agenda for a long time but the new plans combined aid and debt with
governance and conflict.
CHINA UPS STAKES IN TEXTILES ROW
China is to scrap export tariffs on 78 categories
of clothing and textiles in an apparent escalation of a trade dispute
with the US and European Union.
Beijing introduced the tariffs to try to control
burgeoning Chinese clothing exports, but the EU and US still say too
many such goods are being exported.
With the EU now threatening to limit imports of
such Chinese items, it appears that China is now retaliating.
The US has already brought in limits on Chinese
textile and clothing imports.
Washington made the move on 14 May against Chinese
cotton trousers, cotton shirts and underwear. The EU on Friday asked
for formal talks with Beijing over two types of Chinese clothing and
textiles — flax yarn and T-shirts.
Last Monday, the EU's executive commission insisted
that it had grounds to act to stem the flood of Chinese imports and
rejected China's claims that there was no evidence to justify the
Under World Trade Organization rules, the US and EU
can limit annual imports of Chinese clothing and textiles to a maximum
of 7.5% more than the levels seen between March 2004 and February
Both the US and EU can evoke this 7.5%
"safeguard rule" until 2008.
The EU can now bring in the 7.5% level if no
agreement can be reached with China within 90 days of the start of
talks on Monday.
The origins of this trade dispute between China on
the one hand and the US and EU on the other was the end of a 30-year
global agreement on clothing and textile exports on 1 January.
GROUP WINS $3.4BN DUBAI RAIL DEAL
A much-needed rail system for Dubai in the United
Arab Emirates is to be built by a Japanese-led consortium in a 12.45bn
dirhams ($3.4bn; £1.86bn) deal.
Mitsubishi Heavy Industries will lead the contract
to build the hi-tech system in the Gulf emirate.
The project, to build a 69.7km (43.5-mile) link,
should be completed within five years, Dubai municipality director
general Qassem Sultan said.
There is increasing road congestion in the rapidly
The winning consortium — named Dubai Rapid Link
— beat competition from France's Alstom, Canada's Bombardier and
Siemens of Germany.
The deal was announced at a ceremony in Dubai last
Sunday, with work due to start in July.
The metro rail system will have two lines covering
major locations across Dubai, and will feature underground and raised
The first part of the project will be a 52.1km
(32.5 miles) line between Rashidiya and the industrial zone of Jebel
Phase two will be 17.6km (10.94 miles) line from
the airport through the city centre on both sides of Dubai Creek.
As well as the train link, the winning group, which
includes Japan's Obayashi Corporation and Kajima Corporation and
Turkey's Yapi Merkesi, also secured a 1.88bn dirham
deal to maintain the rail system over 15 years.
Gridlocked traffic is a feature of daily life in
Dubai, which has grown hugely over the last three decades, and is in
the middle of a massive construction boom.
EU STRUGGLES TO SAVE CONSTITUTION
European leaders are struggling to keep the EU
constitution alive after it was rejected by French and Dutch voters.
"This is a dangerous position to be in,"
said Prime Minister Jean-Claude Juncker of Luxembourg, the current
president of the European Union.
European Commission head Jose Manuel Barroso will
meet European Parliament leaders for talks.
The Netherlands overwhelmingly rejected the
constitution on Wednesday, three days after French voters said
Latvia's parliament ratified the constitution by a
vote of 71-5 on Thursday, bringing the number of countries backing it
The charter needs to be approved by all 25 of the
EU's member states to become law.
Provisional results from the Netherlands show
nearly two-thirds of voters were against the draft treaty. Turnout was
The vote deals what could be a decisive blow to the
"We have a serious problem, but we must
continue our work," Mr Barroso said.
Mr Juncker said other EU members should go ahead
with their referendums.
But BBC European affairs correspondent William
Horsley says Mr Juncker seemed so distressed that he could hardly take
in the fact of the second "No" vote.
The mood in Brussels is deep gloom, our
UK Foreign Secretary Jack Straw said the double
rejection "now raises profound questions for all of us about the
future direction of Europe". Britain will take over the rotating
presidency of the European Union next month.
GOLD PRICES AT 15-WEEK LOW
Gold sat near its lowest in almost four months last
Wednesday in Europe as the euro hit its lowest in more than seven
months on worries about stability in the eurozone, dealers said. Spot
gold slipped to $415.60/416.30 per troy ounce by 1045 GMT from
$416.50/417.20 late in New York on Tuesday when the market hit a low
of $413 — last seen in mid February.
In other metals silver paused after hitting a
2-1/2-month peak on Tuesday in New York at $7.45. Speculators had
snapped up the metal on talk of the launch of a silver Exchange-Traded
Fund and on the price differential between gold and silver.
Spot silver eased to $7.36/7.39 from $7.42/7.45
late in New York last Tuesday. The break above the key band of
resistance between $7.30 and $7.35 set up a possible test of the next
band of resistance located between $7.55 and $7.65, Standard Bank said
in a report.
TURKEY'S TRADE GAP WIDENS
Turkey's trade deficit widened by 17.8 percent to
$12.1 billion in the first four months of 2005 from $10.3 billion in
the same period last year, the state statistics institute said.
Imports climbed 21.9pc to $35.2 billion, while
exports increased by 24.1pc to $23.1 billion, it said. In April alone,
imports rose by 19.3 percent to $9.5 billion and exports climbed by
16.4 percent to $5.9 billion.
The embattled Turkish lira has steadily regained
value over the past two years as the economy emerged from a severe
crisis that erupted in 2001. The government, buoyed by improving
macroeconomic indicators under a recovery program backed by the
International Monetary Fund, wiped off six zeroes from the currency on
January 1 in a major money reform.
US RELYING ON 'UNPRECEDENTED BORROWING': IMF
The US economy has "solidified" over the
past year and the outlook is favourable, but is relying on
"unprecedented borrowing" from foreign sources, the
International Monetary Fund said last Friday. The IMF staff's latest
report card on the US economy said it remains "the main
locomotive of global growth," outperforming the other Group of
The US economy should grow at a pace of around 3.5
percent in the next two years as the expansion matures, the IMF report
"Over the past year, the expansion has
solidified as robust productivity growth and high corporate profits
have contributed to a strong rebound in business investment and an
acceleration in employment," the report said. But it added that
there is no sign that the large current account deficit will be
EURO SINKS AFTER DUTCH 'NO' VOTE
The euro has hit eight month lows after Dutch
voters gave a resounding "No" to the European Union
The euro fell to $1.2158, its lowest since
September, but rebounded slightly to $1.2265 later.
The second "No" vote in a week has
prompted fears that economic reform and integration across Europe will
Analysts added the outlook for the euro remained
Commentators have said that while the
"No" votes from France and the Netherlands have not helped,
the main reason for the currency's current lows was the recent string
of interest rate rises in the US.
Meanwhile, Dutch central bank chief Nout Wellink
dismissed claims that European Monetary Union could break apart as a
result of the vote.
AUSTRALIA LIBERALIZES SERVICES SECTOR
The Australian government has further liberalized
services sector for developing countries, including Pakistan, by
allowing the temporary entry and stay to business people for providing
services in that market. The 148-WTO member countries under the July
2004 package had fixed May 31, 2005 as a deadline for submission of
improved offers required under the general agreement on trade in
Only two countries Australia and Canada had
submitted the revised offer in services within the scheduled time
period. And 78 countries including Pakistan have submitted their
initial offers. Excluding the least developed countries (LDCs), around
38 member countries are yet to submit even an initial offer, overdue
since March 2003
CHINA READY FOR FLEXIBLE YUAN: IMF
China is technically ready to move to a flexible
exchange rate, IMF chief Rodrigo Rato said at a news conference in
Chile last Monday, reiterating the multilateral agency's stance on the
yuan currency. "A more efficient Chinese economy is better for
the world economy," the International Monetary Fund's managing
director also told the news conference.
China's yuan currency is pegged in a narrow band at
around 8.28 per dollar. The United States, which has a $162 billion
trade deficit with China, has made increasingly urgent demands on
rapidly-growing China to let its currency trade more freely.
CHINA TO LAUNCH STEEL FUTURES
The Shanghai Futures Exchange and China's futures
regulator are considering the launch of steel futures, which to date
have eluded efforts to identify a product standard enough to provide
trading liquidity. "We have already completed studies for futures
in rebar and in wire rod, and proposed them to the regulators,"
exchange chairwoman Wang Lihua told reporters on the sidelines of a
conference on derivatives organized by the exchange.
OPEC MAY NOT INCREASE CEILING
Opec's president Sheikh Ahmed Fahd al-Sabah said
last Wednesday that the oil producing cartel will most likely maintain
current output levels at its next meeting set for June 15 in Vienna.
"I started consulting with some of my colleagues. I think the
situation is that we will continue to maintain our production (levels)
now," Sheikh Ahmed, who is also Kuwait's energy minister, told
reporters in parliament.
The 11 members of Opec are producing in excess of
30 million barrels per day compared with an official fixed ceiling of
27.5 million bpd for the Opec-10 (excluding Iraq), agreed in March in
the Iranian city of Isfahan. Sheikh Ahmed said the organization will
not cut output for the third quarter of 2005.
EU WIDENS SERVICES MARKET
The European Union offered improved access for
foreign companies to its service industries such as banking, energy
and tourism, a key step in negotiations for a global free trade pact.
The EU's revised offer comes amid intense debate over how far to open
up the service sector across the 25-nation bloc itself, with western
European countries anxious about the prospect of low-cost competition
from new members to the east.
Sent by the European Commission to the Geneva-based
WTO, the offer exempts from international competition sensitive
sectors that provide public services.
FRENCH PM ANNOUNCES NEW CABINET
New French Prime Minister Dominique de Villepin has
named a cabinet designed to boost confidence in a government shaken by
the "No" to the constitution. Mr de Villepin confirmed that
his rival Nicolas Sarkozy will serve as his deputy in the new centre-right
line-up, and succeed him as interior minister.
The new foreign minister is Philippe Douste-Blazy,
formerly health minister.
The French "No" to the EU treaty and its
rejection by the Dutch this week has sent shockwaves across the bloc.
France's flagging economy is believed to have
fuelled the "No" vote in Sunday's referendum.
Both President Jacques Chirac and Mr de Villepin
have promised to make tackling the country's 10% unemployment level a
GM TO OPEN TWO NEW CHINESE PLANTS
General Motors' Chinese joint venture is taking
over a disused car factory in the city of Qingdao to help meet rising
demand for small-sized vehicles.
GM said SAIC-GM-Wuling Automobile would be able to
make up to 70,000 cars and trucks a year at the plant on the eastern
coast north of Shanghai.
It intends to begin production at the facility by
the second half of 2005.
GM also announced that it is to spend $387m
(£213m) building a new engine plant in China.
ISRAEL RELEASES 398 PALESTINIANS
Israel has released almost 400 Palestinian
prisoners, as part of a ceasefire deal agreed in February.
Israeli Prime Minister Ariel Sharon pledged to free
900 inmates in a deal with Palestinian leader Mahmoud Abbas.
Some 500 were let out soon after, but the second
release was delayed while Israel said the Palestinians should do more
to stop militant attacks.
Two men chose not to be released — one so he
could finish exams and the other to stay with his brother — Israel
The 398 detainees who were freed last Thursday were
taken by bus from Israel to the West Bank and the Gaza Strip. They
waved and many made the V for victory sign as they stepped off into
INDIA EXTENDS IT OUTSOURCING BOOM
Exports of Indian software and services have grown
by more than a third in the past year, with further rapid expansion
predicted for the coming year.
The National Association of Software Companies (Nasscom)
said technology and IT services exports were worth $17.2bn (£9.5bn)
in the year to March 2005.
It predicted that the rise, of 34.5%, was set to
repeat in the coming year.
Nasscom president Kiran Karnik also said that
companies were focusing more on sales at home as well as abroad.
Predicting a 30% expansion of exports in the next
12 months to $22.5bn, Mr Karnik said the organisation was aiming to
encourage more collaboration between Indian firms.
BOTSWANA DEVALUES THE PULA
Botswana has surprised the currency markets by
devaluing the pula by 12%.
Its central bank said the move against a number of
other currencies was in line with its aim of seeing a "stable and
competitive real exchange rate".
The change is intended to deliver a boost to both
Botswana's exporters and domestic producers, in the face of flagging
growth and high unemployment.
It surpasses a 7.5% devaluation back in February
2004, and comes after interest rates dropped to 14% in April.
STRIKES CRIPPLE FRENCH RAILWAYS
Rail travel across France has been severely
disrupted by a strike in protest against the centre-right government's
The strikes are the first since French voters
firmly rejected the proposed EU constitution in a referendum on
The "No" vote triggered a change of prime
minister. Dominique de Villepin is to announce his new team soon.
Trade unions, who had campaigned for a
"No" vote, are protesting against job cuts in France's
BUSH NAMES COX AS NEW SEC CHIEF
The new chairman of the main US stock markets
watchdog will be Republican congressman Christopher Cox, said
President George W. Bush.
Mr Cox, a former chair of the Homeland Security
committee, will take over at the Securities and Exchange Commission
(SEC) if he gets US Senate backing.
He will oversee corporate disclosure, stock market
regulation and investigate allegations of corporate wrongdoing. Mr Cox
will replace William Donaldson, who will step down on June 30.
SERIES OF CAR BOMBS STRIKES IRAQ
At least 16 people including a local official have
died and 42 have been hurt in a series of car bombs in Iraq.
An attack on a convoy in Baquba killed at least
four, including the deputy head of a local council, police said.
Ten died in Tuz Khurmatu, 90km (55 miles) from
Kirkuk, in a restaurant where the bodyguards of Deputy Prime Minister
Ruz Nuri Shawis were eating.
At least one child was killed and several other
people were injured in a suicide attack in Kirkuk.
The bomber is thought to have been targeting two US
consulate vehicles, one of which was slightly damaged.
UK IS 'TOP SPOT FOR EU MIGRATION'
The UK has been the top destination for immigrants
from the 10 new European Union member states since the trade bloc
expanded last year, a report says.
Germany's DIW Institute estimates that up to
150,000 people have migrated to the older members since May 2004.
Economic research group DIW found that more than
50,000 people had made their way to the UK over the past 12 months.
KUWAIT HOLDS LAST ALL-MALE POLL
Kuwaiti men have been casting ballots in the last
elections in the Gulf state before women get the right to vote.
The 130,000 voters are electing 10 municipal
councillors, responsible for planning and public services.
Last month, the Kuwaiti parliament passed a law
allowing women to vote and stand for election, but it came too late
for Thursday's polls.
Women will be able to take part in parliamentary
elections in 2007 and the next local elections in 2009.
NOKIA TO UPGRADE KUWAITI NETWORK
Phone and telecoms firm Nokia has agreed a 100m
euro ($125.7m; £68.9m) deal to upgrade the network of Kuwaiti mobile
phone provider Wataniya Telecom.
According to Wataniya, the deal opens the way to
"beyond 3G", with work due to start now and end by early in
The network will support High Speed Packet Access
technology (HSPA), which opens up broadband internet access at speeds
of up to 2 megabits per second.
The signing ceremony was attended by Finnish Prime
Minister Matti Vanhane.
He is on a state visit to the Gulf state for talks
on economic co-operation between the two nations.
EU DISCUSSES WORKING-TIME OPT-OUT
European Union ministers are meeting in Luxembourg
to discuss changes to Europe's 48-hour working-week laws.
Among the amendments are proposals to eliminate a
clause allowing employees to work longer hours if they agree to do so
with their employer.
The UK is staunchly opposed to such a move,
claiming the opt-out is vital for competitiveness and job creation.
Last month, the European Parliament voted to end
the UK's current working week exemption by 2012.
EURO REPORT WHIPS UP GERMAN STORM
A political storm has broken out in Germany over
reports that the government may be distancing itself from the European
Stern magazine said that Finance Minister Hans
Eichel had been present at a meeting where the "collapse" of
monetary union was discussed.
The government is planning to blame the euro for
Germany's economic weakness, the magazine added. The report was
dismissed by both the ministry and Germany's central bank.
HOUSE-PRICE GROWTH SLOWS IN MAY
UK house prices rose 0.3% during May, down from a
0.9% increase in the previous month, according to the Nationwide
On a three-monthly basis house prices rose by 0.5%,
compared to 0.6% for the previous period.
Year-on-year property prices rose by 5.5%, the
lowest annual growth rate since August 1996.
Nationwide said the figures strengthened its view
that the housing market was heading for a soft landing.
PORTUGAL WARNS OF SPENDING CUTS
Portugal is planning to shrink its budget deficit
back in line with European Union rules by 2008, its government has
Prime Minister Jose Socrates said he would raise
value-added tax to 21% from 19% now, and cut public spending.
The result, he said, would be to get the deficit
down to 6.2% of gross domestic product this year and 2.8% of GDP by
Some projections see this year's figure at 6.8%,
more than twice the EU limit.
The EU's EU's Growth and Stability Pact says
countries need to keep deficits below 3% of GDP, a broad measure of
the size of the economy.
Portugal became the first of the 12 countries in
the eurozone to breach the pact's limit in 2001.
WOLFOWITZ TAKES UP WORLD BANK JOB
Paul Wolfowitz has marked his first day as the new
head of the World Bank by reaffirming his plan to focus primarily on
reducing poverty in Africa.
In addition, he intends to tackle corruption and
make poor countries feel more involved in the decision making process
at the global lender.
Mr Wolfowitz added that although Africa would be
his main focus, he would not forget other developing regions. Some
have attacked his appointment because of his role in the Iraq War.
US CONSUMER CONFIDENCE REBOUNDS
US consumer confidence fell during May from April,
but has picked up towards the end of the month as gasoline prices
eased and the job market got stronger.
The University of Michigan said its measure of
confidence fell to 86.9 in May from 87.7 in April.
"Consumers are not euphoric over the economy,
but confidence is slowly improving," said Lynn Reaser, an
economist at Bank of America.
She said there had also been better stock market
news in the past weeks.
Consumer spending accounts for 66% of US economic
activity and is viewed as a gauge of the health of the economy.
The figures came as separate data from the US
government's Commerce Department showed that personal income rose at
its fastest pace this year in April.
JAPAN JOBLESS HITS SIX-YEAR LOW
Japanese unemployment has fallen to its lowest
level in more than six years, boosting hopes that the nation's
economic recovery is gathering speed.
The latest official figures show that Japan's
jobless rate fell to 4.4% in April, down from March's 4.5%. It is the
lowest figure since October 1998.
A separate official survey showed that Japanese
industrial production was increasing, driven by domestic demand.
Yet the jobless figures were mixed, as unemployment
rose amongst the young.
The jobless rate increased by 5.6% for people
between 25 and 34 compared with 5.2% in April 2004.
MORE SALES WOES FOR GM AND FORD
General Motors and Ford are both planning to lower
prices and cut more production in the US as they continue to lose
sales to their Asian rivals.
GM saw US sales in May fall by 5.5% on the same
month a year earlier, while Ford's dropped by 3%.
By contrast, Nissan saw its US sales rise by 15.5%
in May, while Toyota gained 7.8% and Hyundai/Kia almost 9%.
The US firms' focus on sports utility vehicles (SUVs)
has caused them trouble in the face of sky-high fuel prices.
Analysts have said that in contrast to GM and
Ford's SUV-heavy line-up, their Asian rivals have a wider range of
fuel-efficient saloon cars too.
BUSINESS SEEKS PENSION SHAKE-UP
The second state pension should be reformed in
order to give lower-paid workers more money in retirement, the CBI
employers organisation has said.
The body said reform could raise the retirement
income of someone earning £20,000 a year by up to £2,000 a year.
Returns would be boosted by savings the state could
make on administration costs, the CBI said.
The proposal will be put to the Pensions
Commission, which is seeking a solution to the UK's pension problem.