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Tomorrow 11 27 38 Sunny
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KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1

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  DEPARTMENTS
 

IN THE NEWS
. INTERNATIONAL
. PAKISTAN
 

 

 

 

 
  INTERNATIONAL

Dec 26 - Jan 01, 2006

'REMARKABLE' UK ECONOMY PRAISED

The International Monetary Fund (IMF) has praised the "remarkable" stability of the UK economy, despite a housing market slowdown and rising fuel prices.

The IMF also forecast economic growth would pick up in 2006 and 2007 - to 2.25% and 2.75% respectively - as the UK shook off the current "soft patch".

"Macroeconomic stability in the UK remains remarkable," its report said.

But, it did warn that the Chancellor needs to rein in spending to stop budget deficits widening further.

The Article IV report also questioned Gordon Brown's decision to restate the current economic cycle.

"Fiscal rules are playing an important role in disciplining fiscal policy, although at times this role is overshadowed by peripheral controversies," the report said.

It added that Mr Brown's success in sticking to his golden rule - of borrowing only to invest during the economic cycle - depended on "a precise dating" of the cycle.

"The adjustments in the definition of the cycle have proved an unhelpful distraction from the more important considerations of what a sustainable fiscal policy is," the IMF said.

In July, Mr Brown declared the current economic cycle began in 1997 rather than 1999 - a move some experts said was effectively moving the goalposts for his own rules.

They swooped on the change, accusing Mr Brown of "cheating" to avoid breaching another strand of the golden rule, namely on balancing the budget over the economic cycle.

US SENATE BLOCKS ALASKA OIL DRILLING

The US Senate has narrowly blocked a Republican-led attempt to allow drilling for oil in Alaska's Arctic National Wildlife Refuge (ANWR).

Supporters of the plan fell four votes short of the number needed to prevent opponents using a filibuster - or delaying tactic - to derail the vote.

The Republicans had hoped to win Senate support by tacking the Alaska measure on to a major defence spending bill.

Both sets of legislation are likely to be presented again separately.

Supporters of drilling in Alaska say it offers an alternative source of energy to the Middle East and so would improve national security.

Opponents warn oil exploration would harm a pristine wilderness and endanger a key habitat for migratory birds, polar bears, caribou and other animals.

The Republicans fell short of the 60 votes needed to avoid the Democrat-led filibuster, with the tally standing at 56-44.

Alaska's Arctic National Wildlife Refuge covers 19 million acres

Senate leaders are expected to withdraw the defence spending bill to redraw it without the Alaska drilling provision.

Senate Majority Leader Bill Frist was among those to vote 'No' because, under Senate rules, as a member of the majority he would be allowed to bring up the drilling issue for another vote.

Alaska Republican Ted Stevens had attached the measure to the defence spending bill - an essential piece of legislation - in the hope it would be passed.

EUROZONE GROWTH GAINS MOMENTUM

Eurozone growth is gaining momentum as business investment booms, although private consumption remains hesitant, the European Commission(EU) said.

The eurozone economy grew 0.6 per cent in the third quarter of this year after growth of 0.4 per cent in the second quarter, the EU's executive arm predicted in its quarterly report on the bloc, without offering a forecast for the fourth quarter.

In the third quarter, the commission saw the eurozone economy expanding on an annual basis at a rate above the bloc's estimated potential growth rate of about two per cent.

Looking ahead, the commission stuck to previous estimates for growth this year of 1.3 per cent and 1.9 per cent next year. "The gross domestic product (GDP) growth in the euro area accelerated to rates above potential in the third quarter of 2005, and leading indicators suggest that economic activity remained sustained during the last months of 2005," the commission said.

GULF STATES RATIFY FOREX UNION CRITERIA

Gulf Arab leaders endorsed criteria for European-style monetary union in the world's biggest oil exporting region and agreed to forge a common policy on negotiating trade agreements.

But they did not announce any decision on how and when the six Gulf Cooperation Council (GCC) states would start moving toward a single currency.

The leaders endorsed the monetary and financial criteria (that will lead to) the success of monetary union, a summit statement said.

Bureaucrats of the United Arab Emirates, Saudi Arabia, Oman Qatar, Bahrain, and Kuwait have agreed five macro-economic and budgetary criteria for monetary union by 2010.

The criteria cap budget deficits at 3 per cent of gross domestic product, public debt at 60 per cent of GDP, inflation at the GCC average plus 2 per cent and interest rates at the average of the lowest three states plus 2 per cent and require foreign exchange reserves to cover 4-6 months of imports.

FDI RISES BY 328PC IN 6 MONTHS IN BD

The inflow of foreign direct investment into Bangladesh in the first six months of the current calendar year has increased by 328 per cent, compared to the corresponding period of the previous year, statistics released by the Bangladesh Bank ? the central bank of the country- revealed.

Bangladesh attracted foreign investment of $453.7 million till June 30, this year, compared to $138.3 million in the first six months of 2004, bringing the total amount of foreign direct investment to $460.4 million during the year.

The data compiled in the latest survey conducted by the Bangladesh Bank showed that the inflow of foreign investment included equity capital of $247.3 million, reinvestment earnings of $140.8 million and intra-company loans of $65.6 million.

The Board of Investment intends to increase the inflow of foreign direct investment to about $800 million in 2005.

The country received foreign direct investment amounting to $79 million in 2001, $52 million in 2002, $268 million in 2003 and $460 million in 2004, showing a higher growth in foreign investment in recent years.

EU QUOTAS BRING MODEST FISH CUTS

The European Union has agreed new fishing quotas for 2006, after three days of negotiations in Brussels.

The number of days cod trawlers can spend at sea will be cut by 5% - instead of the 15% recommended by the European Commission.

Scientists had called for a blanket ban on cod fishing due to low stocks, but this was opposed by fishing fleets.

France won the right to fish anchovies in the Bay of Biscay after the lifting of an outright ban.

The deal, reached after what was described by the French as a "difficult meeting", appeared to have general backing among the 25 EU states. There were no votes against, with just Sweden abstaining.

OPEC AND CHINA FORGE CLOSER TIES

Opec officials have arrived in Beijing for the first formal talks between the oil producing cartel and China.

Chinese leaders are keen to secure supplies of oil to fuel the country's rapidly expanding economy.

Opec, meanwhile, wants to develop closer ties with the world's second-largest oil consumer.

With world oil supplies currently stretched, Opec says it wants to gain a better understanding of China's appetite for oil.

Oil producing nations are facing an investment bill for billions of dollars to ramp-up production at oilfields in a bid to meet soaring demand.

HILTON CONFIRMS LADBROKES SUITORS

UK leisure firm Hilton Group has confirmed it has been approached about selling its Ladbrokes business.

According to media reports, a number of private equity groups have expressed an interest, valuing the gambling company at 3-4bn ($5.2-7bn).

Hilton Group said it remained focused on concluding the sale of its international hotels chain to US namesake Hilton Hotels Corporation.

EUROFIGHTER SOLD TO SAUDI ARABIA

Shares in BAE Systems have risen over 6% in value after the UK government agreed to supply Saudi Arabia with the new Eurofighter.

This is the first contract for the jet outside Europe and will safeguard thousands of UK jobs.

The Eurofighter has been developed by a consortium of firms in the UK, Germany, Spain and Italy.

IMF BACKS POVERTY DEBT WRITE-OFF

The International Monetary Fund (IMF) has agreed to write off the $3.3bn (1.89bn) owed to it by all but one of the 20 poorest countries in the world.

It has delayed granting debt relief to Mauritania until it makes "satisfactory progress in a few policy areas".

The write-off follows the Group of Eight debt forgiveness deal which was struck in July.

RAPID US ECONOMIC GROWTH PERSISTS

The US economy has continued to grow quickly despite the impact of hurricanes and record high oil prices.

The Department of Commerce said that gross domestic product (GDP) increased by an annual rate of 4.1% in the three months to the end of September.

That was the fastest rate of growth since the first quarter of 2004, and up from 3.3% in the previous three months.

Consumer demand - which has been helped by discounting - was the key driver, along with business investment.

Consumer spending, which accounts for nigh on two-thirds of economic activity, increased by more than 4% during the third quarter, up from 3.4% in the previous three month period.

On the negative side, growth in the third quarter was less than had been initially predicted and corporate earnings slid as companies had to meet the cost of hurricanes Rita and Katrina.

GOOGLE CONFIRMS $1BN STAKE IN AOL

Online search engine Google has confirmed it will invest $1bn to take a 5% stake in Time Warner's AOL unit as part of a major strategic alliance.

The deal, which follows intense negotiations between the two US internet giants, values the troubled AOL unit at $20bn.

NIKE PROFIT RISES

US sportswear group Nike has announced a 15% rise in profits, a record for its second quarter, beating Wall Street analysts' estimates.

The firm, which also owns the Nike Golf and Converse brands, said profits rose to $301m (171m) on strong sales in the US of its upmarket athletic footwear.

UK CUTS UGANDA AID IN POLL FEARS

Britain is to cut the amount of direct aid it gives to Uganda by 15m ($26m) because of concerns about the country's slow progress to democracy.

The money will be diverted to aid agencies in the conflict zone of north Uganda, International Development Secretary, Hilary Benn said.

A further 4m is being held back pending the conduct of presidential elections due in February next year.

The announcement follows a similar move by Sweden, which diverted 4.6m.

European governments have expressed concern about the prospects for a fair election following the arrest on treason charges of the main opposition leader, Kizza Besigye.

COSTLIEST YEAR YET FOR INSURERS

Insurers had their costliest year yet in 2005 as a deluge of natural disasters saw total insured losses of about $80bn (45bn), says Swiss Re.

August's Hurricane Katrina in the US alone is expected to cost $45bn in claims, the world's second-biggest reinsurance company said.

This will make it the most expensive ever insured single event.

Total economic losses caused by hurricanes, earthquakes and floods in 2005 reached $225bn in 2005, it said.

Hurricane Andrew in 1992 was previously the most expensive single catastrophe, causing losses of $22bn, Swiss Re said.

This was followed by the 11 September 2001 attacks on the US, costing nearly $21bn.

Two other expensive storms in the US came in the wake of Katrina. Hurricane Rita cost $10bn in insured losses and Wilma claimed $8bn.

UKRAINE REJECTS RUSSIA GAS THREAT

Ukraine's president Viktor Yushchenko has dismissed threats by Russia's gas monopoly Gazprom to cut off its gas supplies unless new prices are agreed.

Mr Yushchenko was speaking a day after talks between the Russian and Ukrainian premiers failed to resolve the stand-off over gas prices.

Moscow wants to raise the price of gas for Ukraine to bring it in line with world market rates.

But Mr Yushchenko said the threats to end supplies amounted to "blackmail".

Currently Ukraine receives heavily discounted gas from Russia, offsetting the price against fees levied for transporting Russian gas through its pipelines.

Gazprom says it will not compromise over its demand that Ukraine pays what it says are appropriate rates.

Moscow wants to more than quadruple the price of supplies to the Ukrainian market, to between $220 and $230 per 1,000 cubic metres.

 
 

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