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  DEPARTMENTS
 

IN THE NEWS
. INTERNATIONAL
. PAKISTAN
 

 

 

 

 
  INTERNATIONAL

Nov 28 - Dec 04, 2005

GERMANY HAS FIRST WOMAN CHANCELLOR

Angela Merkel became Germany's first woman and youngest post-war chancellor last week, ending months of political uncertainty and ushering in a fragile new coalition of left and right that must prove it can revive Europe's biggest economy.

The 51-year-old Angela Merkel, a pastor's daughter who started her political career after the Berlin Wall fell in 1989, was confirmed in Germany's top post by a parliamentary vote in which 397 of the Bundestag's 614 members backed her - easily enough for the majority she needed in the lower house.

She becomes Germany's eighth post-war chancellor and the first one to have grown up in the former communist east.

"Dear Dr Merkel, you are now the first-ever elected female head of government in Germany. That is a strong signal for many women, and certainly for some men too," joked parliamentary speaker Norbert Lammert, who swore Ms Merkel into office.

Her predecessor Gerhard Schroeder, who initially refused to cede his post when her conservatives narrowly beat his Social Democrats in a Sept 18 election, was the first to congratulate Ms Merkel after the result was read out to a hushed chamber.

Mr Schroeder later handed over the Chancellery keys to Ms Merkel in an emotional ceremony in which he wished her luck and she thanked him for modernizing Germany.

Ms Merkel has vowed to cut unemployment and repair ties with Washington, strained by Mr Schroeder's vocal opposition to the Iraq invasion. But she enters office weaker than she had hoped and with a majority of Germans convinced her unwieldy alliance, the first 'grand coalition' since the 1960s, will not last a full four-year term.

S. ARABIA SEES GDP UP 4.6PC BY 2009

Saudi Arabia projects an average 4.6 per cent annual economic growth over the 2005-2009 period backed by an expected 1.56 per cent rise each year in the value of oil exports, the backbone of its economy.

The world's top oil supplier expects the value of its crude exports to rise to 398.5 billion riyals ($106.3 billion) by 2009, up 8 per cent from 368.8 billion riyals in 2004, details of the 2005-2009 five-year economic plan showed.

Economic growth over the 2000-2004 plan was 3.44 per cent a year.

The projected total value of oil exports (in 2009) represents 34.9 per cent of Gross Domestic Product (GDP) against 39.7 per cent in 2004," the economy and planning ministry said on its Web site.

The figures suggest Saudi Arabia, which plans to raise oil output capacity by 14 per cent to 12.5 million barrels per day by 200, is using conservative estimates to guard against any fall in crude oil prices.

Officials at the planning and economy ministry could not be reached for comment. The ministry published no projection for the price of oil over the five-year period covered by the plan.

Despite price fluctuations, oil receipts rose at an average annual pace of 17.5 per cent over the 2000-2004 period.

The average 4.6 per cent growth in the economy should hike GDP to 895.2 billion riyals by 2009, up 25 per cent from 715 billion riyals in 2004, the ministry said. The GDP figures were based on constant 1999 prices.

Plans for the longer term provide for a GDP of 1.189 trillion riyals in 2014 and 2.542 trillion riyals in 2024, also at 1999 prices.

The 2005-09 plan is based on inflation at an annual 0.6 per cent, against annual deflation of 0.6 per cent over the previous five years.

INDIA HOPES TO EXPORT COTTON TO CHINA

Made-in-China apparel sold in some of the biggest retail chains in the US, in the summer of 2007, may have their thread running to Gujarat. Cotton farmers from the state are preparing themselves to enter the dragon land. Both the US and China haven't had a very good cotton crop this season creating a demand pull from China. Local traders feel that exports will fetch handsome returns - nothing less than 100 per cent.

As China prepares itself to become the leading textile exporter to US and Europe, it is expected to face a shortage of an estimated 15 million bales of cotton. Gujarat seems to be ideally placed to partially fulfil this shortage, thanks to an extremely good monsoon and extensive use of Bt-cotton seeds this year.

"The cotton price in the exports market today is lucrative, owing to higher demand from buyers especially in China. What's more, Gujarat has the most consistent quality of the crop which is required for exports," a cotton trader in Saurashtra told ET.

The international price of good quality cotton is averaging at about Rs50 a kg against the domestic rates of about Rs20 a kg or even less.

FRAUD CHARGE FOR IRAQI CONTRACTOR

A US businessman has been charged with bribing officials involved in the reconstruction of post-war Iraq, the New York Times has reported.

The paper said Philip Bloom had been accused of paying $600,000 (349,000) to staff in the Coalition Provisional Authority which ran Iraq until 2004.

Citing legal documents, the paper said Mr Bloom is alleged to have secured up to $3.5m in fraudulent contracts.

Anti-corruption groups have warned that fraud has become widespread in Iraq.

Soon after the invasion of Iraq, the US and other partners had pledged $20bn to rebuild the country, but many questions have been raised about how the money has been spent.

US INDUSTRY FACES SKILLS GAP

US manufacturers are facing a growing shortage of skilled workers that will hurt their ability to compete in the global economy, a study showed. The report by the National Association of Manufacturers, the Manufacturing Institute and Deloitte Consulting LLP found 81pc of companies surveyed reported difficulties finding workers with adequate skills.

The gap affected all sectors, but was notable in the fields of science and engineering.

EU BUDGET DEAL

British Foreign Secretary Jack Straw restated London's commitment to trying to strike an EU budget deal next month, but stressed it would be difficult and require concessions on all sides. Straw, whose country currently holds the European Union's presidency, confirmed that London will make new proposals at a ministerial "conclave" on December 7 to try to break the deadlock over the bloc's 2007-2013 budget plans.

EU ROW LOOMS OVER MERKEL UK VISIT

German Chancellor Angela Merkel is visiting the UK for talks with Prime Minister Tony Blair that are expected to focus on the EU budget dispute.

Mrs Merkel was sworn in as Germany's first woman chancellor last week.

On a brief visit to Paris and Brussels, she stressed the need for a more constructive approach to solving Europe's common problems.

Her London trip is set to focus on a row over the EU budget that has pitted the UK against France and Germany.

The UK, which currently holds the rotating EU presidency, is eager to reach a deal over the budget by the end of the year.

BANK OF ITALY INVESTIGATED BY EU

The European Commission is to begin legal action against the Italian central bank, the Bank of Italy, over its handling of recent bank mergers.

The move was announced by the Internal Market Commissioner, Charlie McCreevy, who said action was likely to start next month.

It comes after Dutch bank ABN Amro said the Bank of Italy tried to block its bid for Italian lender Antonveneta.

The Bank of Italy was said to have wanted an all Italian merger instead.

The bank's governor, Antonio Fazio, has been accused of abusing his position over the matter and has faced calls in Italy to resign.

SAUDI WTO MEMBERSHIP APPROVED

The World Trade Organization (WTO) has approved Saudi Arabia's application for membership after 12 years of talks.

The world's largest oil exporter will become the 149th member of the WTO in 30 days' time.

The country will need to adopt the entire body of WTO legislation, a process that involves liberalisation of currently restricted sectors.

Saudi Arabia must open its long protected economy to the outside world, including fellow WTO member Israel.

WEAK SALES HIT NINTENDO PROFITS

Japanese gaming firm Nintendo, creator of iconic characters Donkey Kong and Mario Brothers, has seen profits drop amid weak sales of its latest console.

Net profit dropped 21% to 36.6bn yen (179m; $308m) in the six months to 30 September from 46.5bn yen a year ago. Sales dropped 6.2% to 176.4bn yen as demand for the firm's GameCube waned.

RADIO GROUP'S PROFITS DISAPPOINT

The owner of the Capital and Classic FM radio stations, GCap Media, is to revamp its stations and advertising policy after seeing its profits fall.

Underlying half-year profits dropped to 12.4m ($21.3m) from 17.3m a year ago, with revenue down 11% to 11.6m.

UK HOUSEBUILDERS ANNOUNCE TIE-UP

The UK's largest housebuilder, Persimmon, has agreed a 643m ($1.1bn) takeover bid for rival firm Westbury.

The 560 pence-a-share cash offer has been recommended by Westbury's board of directors, although it must be approved by the shareholders of both companies.

Persimmon said there was a "compelling logic" to the deal, which would boost its land assets and increase its presence in certain areas of the UK. Persimmon currently builds more than 12,000 houses a year.

EU 'HAS ROOM TO MOVE ON TARIFFS'

Europe's trade chief has said he has room to manoeuvre on how many goods he will protect from tariff cuts at World Trade Organisation talks next month.

But Peter Mandelson did add that he had no plans to give in to demands for more cuts in farming tariffs.

"There are plenty of aspects and areas of our offer where we can elaborate, elucidate and specify," he told a European Parliament trade committee. He added that there was room to move on "sensitive products" like beef.

CHRISTMAS RETAIL SPENDING TO DROP

Festive cheer may be far from retailers' minds next month after a survey predicts the first drop in UK Christmas spending in a decade.

The amount the UK spends on Christmas presents will fall by 400m this year, the study by accountants Deloitte says.

It estimates that the average amount spent per head on gifts will fall 2.8% to 310, cutting the total UK spend to 14.7bn from 15.1bn last year.

The survey also says most people hope not to have to use their credit cards.

Deloitte said three out of four shoppers aim to use cash or debit cards alone, and suggested that this meant people were becoming more concerned about personal debt.

BIG GROWTH IN MOBILE PHONE SALES

Handset sales hit 205 million, said research firm Gartner, which forecast total sales of 810 million for 2005.

Nokia continues to lead the market with a 32% share, but Motorola saw a big boost in sales as it sold 12 million of its Razr phones.

Sales grew more slowly than the 26% seen in the same period of 2004 - but surged over 40% in Eastern Europe, Africa and Latin America.

SCOTTISH ECONOMY 'OUTPACING' UK

The Scottish economy is set to grow faster than the UK average this year, thanks largely to more resilient consumer spending, a report has said.

Scotland's gross domestic product (GDP) will rise by 1.7% in 2005, compared with 1.6% in the UK as a whole, the Scottish Item Club research group said.

However, the report said Scotland's economy will grow at a slower rate than the UK average next year. Scotland's 2006 growth figure is expected to be 1.9% and the UK's 2.2%.

FED HINTS AT END TO US RATE RISES

The US Federal Reserve could soon consider an end to its current cycle of "measured" interest rate rises, minutes of its latest meeting have suggested.

The central bank raised rates for the 12th time in a row at the start of the month from 3.75% to 4%.

Policy setters voted unanimously for a rise in November amid fears that high fuel prices were a risk to inflation.

But, the minutes showed some members had voiced fears that "risks of going too far" could eventually emerge.

For a number of months the Federal Open Market Committee (FOMC) has said it would continue to raise rates at a "measured pace", which analysts have taken to mean monthly rises of 25 basis points.

S KOREA APPROVES RICE IMPORT DEAL

Parliament in South Korea has ratified a plan to liberalise the domestic rice market, despite strong opposition from the country's farmers.

The measure was approved in a 139-61 vote, with 23 abstentions.

Under last year's deal with nine rice exporting nations, Seoul will gradually increase its rice import quotas from 4% to 8% of total consumption by 2014.

VENEZUELA GIVES US CHEAP OIL DEAL

Officials from Venezuela and Massachusetts have signed a deal to provide cheap heating oil to low-income homes in the US state.

The fuel will be sold at about 40% below market prices to thousands of homes over the winter months.

Local congressman William Delahunt described the deal as "an expression of humanitarianism at its very best".

Venezuela's President Hugo Chavez is one of the Bush administration's biggest adversaries in Latin America.

He first announced his plan to provide cheap heating oil directly to lower-income Americans while visiting Cuba in August.

 
 

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