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The lost glory of ‘golden-fibre’ can be revived if Bangladesh can enter into the European market with innovative jute products as it has very high quality of jute.
   Swiss experts made this observation to New Age on Wednesday while focusing on the Swiss Import Promotion Programme.
   “In Switzerland as well as European market, it is the quality, not quantity, that matters and Bangladesh should explore market for four to five quality jute products,” said Adrian Brestcher, a SIPPO expert who left Dhaka on Wednesday after a week-long visit here.
   He said that through the SIPPO, Switzerland is interested to join the efforts Bangladesh should put in to explore the market potentials in the European Union for export of jute, silk and leather products.
   ‘A better overview of the products for the market and a support in fashion forecast and design for these products are most important, the Swiss expert added.
   Brestcher said that exportable products should have ‘made in Bangladesh’ brand image with 100 per cent local value addition.
   He has already been assigned to work out a business plan for marketing of these products.
   During his visit here, Brestcher met with different trade bodies, businesspeople and government officials to find out the status of these three items.
   He was of the view that jute-product should be selective on the basis of market fashion and exporters have to concentrate on limited items.
   ‘The demand for environment-friendly products is on the rise worldwide and jute products can fulfil the demand in European market to some extent,’ said Jurg Casserini, head of mission of the Switzerland Embassy in Dhaka.
   ‘Bangladeshi producers can avail of the opportunities on better market approach through the SIPPO,’ he added.
   Elaborating the programme, Jurg said that the Swiss government would provide trade and market information, contracts and training, and participation in EU-fairs and product promotion for a certain period.
   Under the SIPPO, producers and exporters would bear only 20 per cent of the total cost of such promotional drive by themselves, he added.
   As an example of Swiss support to Bangladeshi exportable items, Casserini referred to the memorandum of understanding with the Bangladesh Frozen Foods Exporters Association for supporting training programme for the farmers and processors of organic shrimp in Bangladesh.
   He, however, expressed disappointment on non-responsiveness of the Bangladeshi entrepreneurs to production of jute granulates, a replacement of conventional plastic products.
   Innovative Bio-Fibre AG, a Swiss company specialised in unconventional jute products including granulates, has been working in Bangladesh for a year to promote the products.
   ‘But, no company is wiling to make initiative for respective investment, even we have been offering support for the last one year,’ Casserini said, adding that the Innovative would withdraw from Bangladesh and start the project in India from next year.
   Till Grether, representative of the Innovative, said that revival of jute could be possible by diversification of products like granulates.
   He has identified series of impediments to the jute sector in Bangladesh.
   ‘The prices of raw jute are quite low and so farmers are losing interests in its cultivation,’ Grether said. ‘The trading and marketing system is also very weak.’
   He said that quality of Bangladeshi jute is very good but it is yet to tap the European market potentials for sacks and Hessians, where Bangladesh is still in a better position.
   Total exports of raw jute and jute goods to the global market stood last fiscal at $79.7 million and $246.45 million respectively.
   And during the first four months of the current fiscal, the country fetched $13.7 million from export of raw jute and $78.3 million from jute goods.

Stocks moved up Wednesday by 21 points or 1.1 per cent at Dhaka Stock Exchange on bargain-hunting buying, especially, of banking stocks ahead of the public holiday to be followed by weekend.
   Surging demand of banking stocks, which account for 45 per cent of the total market capitalisation, pushed the index up, dealers said.
   They said most of the banking stocks started recovering from gradual downslide on profit taking sale-off over the past few days.
   The bank-heavy DSE general index, which hovered in a tight range during the last couple of weeks, rose as high as 1956 points before closing at 1950.3 – highest since DSE general index was introduced in November 2001.
   A total of 140 shares gained when 35 lost.
   Supply of quality shares remained the main concern at the capital market.
   Earlier analysts told New Age that most of the stocks were already overpriced and further buying on speculation would make investments riskier as price-earning ratio of the most companies became unreasonably high.
   The blue-chip DSE 20 index closed at 2168.8 points, up by 12.24 or 0.6 per cent over the previous day.
   On an average the Z category stocks gained 15 to 18 per cent on the day.
   Market sources said that turnover of the weak-fundamental shares also rose during the last few days.
   Dhaka Stock Exchange chief executive officer Salahuddin Ahmed Khan told New Age, ‘We have noticed the price-rise of Z category shares and kept our surveillance team mobile.’
   Besides, pharmaceuticals, cement and IT stocks also gained on buying pressure.
   Many investors who mopped up their stocks over profit taking sale-off over the last few days, started buying again on speculation that the market would become buoyant with the beginning of new year, market observers said.
   Based on the healthy corporate outlook for the year 2004, investors are expecting that companies with good fundamentals and listed in category A would declare a good dividend next year.
   Besides, rumor is widespread around the brokerage houses that many of the banking companies will declare stock dividend to raise the paid-up capital to Tk100 crore by June to comply with a 2003 Bangladesh Bank order.
   Market observers said that past years’ experiences show that market turns bearish in December as most of the companies close their account on 31st .
   On Wednesday, turnover recorded at Tk49 crore with total number of trading at 17,811.
   In category A, 74 issues gained and 29 declined while in category B and Z gainers led the losers 20 to 1 and 45 to 5 respectively.

The BCS computer fair, the largest annual extravaganza in information and communication technology sector of the country, is now shaping into a professional market promotion event from a usual sale performance drive it was in previous years.
   A huge number of visitors throng the fair daily to have an idea of the latest developments in software. The 6-day event will conclude on Friday.
   Most of the product marketers this year are exhibiting the latest products to promote local software, according to the organiser, Bangladesh Computer Samity.
   But, in the customers’ point of view, the fair is quite dull as a lesser number of products were put on display than the last year.
   A total of 77 companies have been showcasing their products at 83 stalls and 36 pavilions.
   Small vendors who are participating in the fair booking stalls said though they experienced rush of visitors this year but sales declined. This downward trend in sale this time, they opined, has resulted from a less passion for a new personal computer among the potential buyers.
   The customers are buying the latest version of accessories, multimedia products and some software, they said. Farid Zaman, an executive of the Computer Source, also admitted decline in sales in the fair.
   ‘Passion for buying new PCs is no more. The market has become saturated’, he said.
   People are buying latest version of multimedia accessories to enrich entertainment facilities in their PCs, he added.
   According to organisers, for a better communication with incoming visitors and potential buyers, the fair compound has been expanded to accommodate local software developers who developed and exported their products.
   E-sophers, a game developer which is renowned for its brand Dhaka Racing attracted huge visitors. So far at least 2000 buyers from abroad have bought Dhaka Racing through internet, said a company official.
   Another software Bangla spell checker allured huge buyers. Available at Tk 200, the CD spell checker has been introduced in the country for the first time.

A greater economic integration among South Asian countries under the framework of SAFTA seemed gaining momentum
   as the region’s main player, India, claimed they gave a
   fresh look to the imperative of settling complaints from the other partners.
   Indian Foreign Secretary Shyam Saran at a regional dialogue in Indian capital Wednesday gave the indication of Indian commitment to seek “greater and greater” economic integration of the region.
   “We (India) will be very beneficial out of this integration,” he told the inaugural session of the dialogue among trade experts from governments, private sectors and civil-society think tanks of the SAARC
   countries.
   Commonwealth Business Council in association with India-based Council for Social Development and Confederation of Indian Industry organized the two-day talk titled “Achieving SAFTA: Public-Private Partnership” to mobilize opinion towards implementation of the SAFTA deal and pressure governments to set up the South Asian Free Trade Area.
   “We’ve started looking ‘nuts and bolts’ towards deeper economic integration,” Shyam Saran said, recognizing limitations of the big economy hindering trade of other partners in the region.
   He apprised the conference of some progress in SAFTA negotiations on four critical issues to put SAFTA in
   place. These are trade facilitation, rules of origin (RoO), technical assistance, and
   revenue compensation for LDCs.
   Few agreements on the trade-facilitation issues, including double taxation-avoidance treaty and SAARC arbitration council, would be inked during the 13th SAARC summit scheduled for January in Dhaka.
   And the committee of experts (COE) negotiating the issues could narrow down
   their differences at their 6th meeting held in India last week, he said.
   He hoped to be able to overcome the problems of revenue compensation—which is yet to make any headway—and find some developments at the next COE meet February 26-28 in Male.
   “We should meet the June 2005 deadline to overcome the problems,” he said, explaining the need for resolving the negotiating issues to make SAFTA effective from January 2006.
   On non-tariff barriers (NTBs) as complained by the participants from disadvantaged countries, he said they had taken huge programme to develop transportation infrastructure towards their border.
   They (India) have already initiated such programme with Nepal and are going soon with Bhutan, he added.
   Indian Communications links with Bangladesh are very poor and they have begun to improve road-rail connectivity.
   Unusually the participants were allowed to ask questions and Bangladesh’s Pran Group Chairman Amjad Khan Chowdhury sought his comment whether India is sincere about improving their cross-border communications and willing to remove NTBs as new regulations are imposing restrictions day by day.
   “It’s time to get away of such discourse,” replied Shyam Saran.
   Replying to another question, he said Tata’s investment proposal in Bangladesh shows that technical limitations cannot stop Indian entrepreneurs from going outside.
   “Political will is very important to remove the bottlenecks… we do have that political will,” he said, assuring that the problems would be solved in the days to come.
   In his keynote address, former Indian foreign secretary Much Kund Dubey called for compressing timeframe to implement the SAFTA in 5-7 years, removing the NTBs with India taking lead role, ensuring free flow of capital and facilitating LDCs on other trade issues (trade facilitation).
   In the following session, former commerce minister of Bangladesh Amir Khosru Mahmood Chowdhury called for ironing out NTBs if the policymakers of the region want fair trade and make the SAFTA a success.
   He pointed out the need for providing LDCs with preferential market access as a core strategy to implement SAFTA. That’s the only way you can help graduate the LDCs,” he said.
   FBCCI president Abdul Awal Mintoo, former commerce secretary Alamgir Farrouk chowdhury, CPD research fellow Dr Ananya Raihan and two officials from the Ministry of Commerce of Bangladesh are among others attending the conference.

The World Bank is willing to help Bangladesh develop its agriculture sector through crop diversification and increased productivity.
   World Bank Country Director Christine I Wallich said this during a meeting with Agriculture Minister MK Anwar at his office here Wednesday.
   The minister said, FAO in cooperation with UNDP, DANIDA and the World Bank has prepared a report on ‘Agriculture Sector Review.’
   He also said the government is working on the report to prioritise the issues to be addressed to boost overall agriculture production.
   Elaborating the challenges to be addressed, the minister identified quality seeds, soil fertility, pro-active research, mechanisation, yield-gap, knowledge transfer, competitiveness and marketing as the major areas to intervene.
   He sought World Bank’s support in the areas and said the government is taking new policy measures to cope with the challenges of seed certification, quality issues and sanitary measures.
   “We are working to amend the Seed Act to make it time-befitting,” the Agriculture Minister said.

Twenty four directors were elected to the Chittagong Chamber of Commerce and Industry (CCCI).
   The election conducting committee announced the result of the election at midnight on Tuesday night.
   The CCCI biennial election was held Tuesday in which about 3 thousand voters out of 5 thousand cast their votes to elect 24 directors out of 37 candidates.
   Sitting CCCI president Amir Humayun Mahmud could not secure his directorship.
   The elected directors from four categories are Saifuzzan Chowdhury Jabed, former president of CCCI Ershad Ullah, present senior vice president Nurun Newaz Salim, Mohammad Amirul Hoque, Mohammad Mohsin, S M Nuruddin, Hasanuzzam Chowdhury, Kamal Mustafa Chowdhury, Ashik Bhuiyan, Mohammad Anwar Sawkat Afser, Mohammad Abdul Malek and Abu Haider Chowdhury (Amjad) from ordinary group.
   S M Nurul Hoque, former senior vice president of CCCI Zahirul Islam Chowdhury, Mahbub Alam Talukder, Mahfuzul Hoque Shah

Speakers at a roundtable here Wednesday stressed that the government, donors and the private sector should work together to enhance the country’s export competitiveness in the post-multi-fibre arrangement era.
   Taking into account the looming challenges after the end of textile quota on December 31, they suggested that the government should ensure enhanced private sector’s participation, develop infrastructure, focus on e-governance, strengthe monitoring and establish conductive force to enable environment through reform of regulatory interference so that the country can effectively fovecome the quota phase-out threats and take the opportunities of globalisation.
   With Prime Minister’s principal secretary Dr Kamal Uddin Siddiqui in the chair, the session was also addressed by country representative of the World Bank to Bangladesh Christine I Wallich and enterprise development advisor of the Department for International Development (DFID) Frank Matsaert.
   The two-day roundtable which began Tuesday was jointly organised by the Foreign Investment Advisory Service (FIAS) and the Bangladesh Enterprise Institute (BEI) in cooperation with the Bangladesh government, International Finance Company (IFC), DFID, World Bank, Japanese International Cooperation Agency (JICA), Canadian International Development Agency (CIDA) and European Commission (EC).
   Christine Wallich said donors are very keen to work together in ensuring an enabling environment, promoting investment and export of the country.
   Detailing the activities of the World Bank in Bangladesh in this regard, she said there are challenges of globalization and at the same time opportunities have also been explored.
   She also praised various measures undertaken by the government in this regard.
   Describing the private sector as the key sector in promoting the country’s business and trade, Frank Matsaert said the actor is the private sector, but they have to be provided infrastructure and logistic support. In this connection, the government has to play a vital role, he added.
   Terming the coming post-FMA world highly competitive for Bangladesh, He underscored the need for a comprehensive strategy for taking forward the country’s trade and business.
   ‘We will learn from the experiences of others and we have to develop a Bangladeshi solution to utilise the new opportunities as well as to face the challenges of globalisation,’ he said.

Last week's sale of IBM's personal computer business to a Chinese upstart capped a year of dramatic transactions in Asia, and bankers see more deals popping up in 2005.
   The value of regional mergers and acquisitions, excluding Japan, has hit $240.3 billion so far this year, compared with $167.3 billion for the whole of 2003, according to market data firm Dealogic. Bankers raked in total fees of $728 million, compared with $684 million last year.
   Asia made up nearly 13 per cent of this year's $1.91 trillion in global deal volume, roughly the same share as in 2003.
   Bankers see further growth in 2005 in a more stable environment, after a slew of Asian elections and the US presidential race hung over the market this year.
   UBS, JP Morgan, Morgan Stanley and Citigroup are the top four M&A advisers in Asia Pacific this year by volume, Dealogic said.
   Topping the fees table are JP Morgan ($61.2 million), Credit Suisse ($60.4 million) and Deutsche Bank ($58.6 million).
   The steep drop in the US dollar has not dimmed US interest in Asian assets, particularly in China, bankers said.

Prime Bank Limited opened its 33rd branch at Shimrail in Manikganj Monday, says a press release.
   Azam J Chowdhury, chairman, board of directors of Prime Bank, inaugurated the branch at a function chaired by M Shahjahan Bhuiyan, managing director of the bank.
   Ferdousi Islam, director of the bank attended the function as special guest. Nasiruddin Ahmed, Mahbubul Alam, Kazi Masihur Rahman, deputy managing directors, among others, were also present on the occasion.
   In his inaugural speech, the board chairman said that Prime Bank is extending collateral free credit facilities to small and medium entrepreneurs under its SME project for generating employment opportunities. He urged the entrepreneurs take opportunity of the project.

Iberchem, SA of Spain and Famous Flavour and Fragrance Limited signed a joint venture agreement in Dhaka on Monday, says a press release..
   Under the agreement, Iberchem, an internationally reputed flavour and fragrance company, jointly produce flavour and fragrance items in Bangladesh.
   Fagrance items which are mainly used in biscuits, cake, ice-cream, soft drinks and medicine will be produced.

China did a better job of meeting its international trade obligations in 2004, but still fell seriously short in many areas of importance to the United States, the Bush administration said in a new report.
   Saturday was the third anniversary of Beijing’s entry into the World Trade Organisation after 15 years of negotiation.
   The US Trade Representative’s office, in a report released without fanfare late on Monday, said US firms and other “stakeholders were significantly more satisfied with China’s WTO performance in 2004 than in the previous two years.”
   “Nevertheless, serious problems remain, and new problems emerge regularly. Most seriously, China’s implementation of its WTO commitments has lagged in many areas of US competitive advantage, particularly where innovation or technology play a key role,” the trade office said.
   The Commerce Department released trade figures on Tuesday showing the US trade deficit with China at $131.1 billion in the first 10 months of 2004, surpassing the record $124 billion for all of 2003.
   Rep. Sander Levin, a Michigan Democrat, accused the Bush administration of contributing to that trade gap by too often turning a blind eye when China shirks WTO rules.
   The United States became the first country this year to file a WTO case against China in a dispute over tax policies Washington said discriminated against imported semiconductors. The case was resolved without the WTO having to rule on the matter when China agreed to change the policy.
   Washington “will not hesitate” to file additional cases to ensure China lives up to its WTO obligations, and will strictly enforce trade laws to ensure US firms and workers are not harmed by unfair Chinese practices, the trade office said.
   The administration report singled out China’s lax enforcement of copyright and patent protections as an area of particular concern.
   US trade officials also criticized China for pursuing policies they said promote domestic companies at the expense of imports and said Beijing must do more on commitments to allow foreign firms to import and export freely without middlemen.
   China’s “opaque regulatory regime” remains a serious problem for agricultural exporters, even though the country has become one of the fastest growing overseas markets for US farm goods, the report said.

Oil prices climbed above $42 a barrel on Wednesday, rising for the third day in a row as the heavy consuming US Northeast feels the first chills of winter.
   But dealers said the market would be taking its cues from US inventory data due later in the day, with analysts expecting a small decline in hefty crude stocks but another increase in low distillate tanks, which include the primary winter fuel.
   US light crude rose 22 cents to $42.04 a barrel extending the recovery from Monday’s $40.25 trough, the lowest since end-July and more than $15 below the October record peak.
   “Part of the reason for the move up is that people are feeling the cold. The East Coast is getting its first snap of winter weather,” said John Brady, a broker at ABN AMRO in New York.
   Forecaster Meteorlogix said temperatures were set to drop below normal this week in northeastern United States, the world’s biggest regional heating oil market. Warmer weather was set to return heading into the weekend.
   Heating oil prices have led this week’s rally, surging 3.8 per cent on Tuesday and adding another 0.35 cents to $1.3080 a gallon on Wednesday.
   “The weather in the US Northeast will dictate prices over the coming month or so,” David Thurtell, commodities strategist at the Commonwealth Bank of Australia, said in a report. “So far, it has been pretty warm, but this can change fairly quickly.”
   The blast of cold has refocused the market on US distillate stockpiles, which include heating oil and diesel.
   Despite rising for several weeks in a row, they remain more than 12 per cent below year-ago levels, leaving a thin cushion of supply to protect against weather-induced demand spikes.
   Inventories are expected to rise for the fourth time running in the week to Dec. 10, building by 900,000 barrels, a Reuters survey of 13 analysts showed. Data are due for release at 10:30 a.m. EST.
   Crude stocks, already in surplus versus last year, are seen easing for the first time in month, slipping 600,000 barrels.
   Prices have also been bolstered by OPEC’s decision to rein in this year’s pumping spree, taking 1 million barrels per day (bpd) off the market in an attempt to stop the tailspin that has wiped more than 27 per cent off prices in seven weeks.
   Saudi Arabia, which is shouldering half the cuts, has told customers that it will be trimming back contractual supplies in January, but other members such as Kuwait have shown no sign of restraining near full-throttle output, industry sources say.

The Federal Reserve’s widely expected move to raise interest rates could help support the dollar on the margins, but the currency’s long-term trend is still likely to be dictated by the record US trade deficit, analysts said Tuesday.
   The dollar has fallen roughly 5 per cent against the euro this year and some 4 per cent against a basket of major currencies as investors fret about the funding of the huge US current account gap, 95 per cent of which comes from trade.
   Trade data released on Tuesday showed the US merchandise trade account in October came in at a record deficit of $55.46 billion. Government figures on the current account deficit, which currently totals 5.7 per cent of the country’s gross domestic product, will be released on Thursday.
   Until recently, relatively low US interest rates meant that investors were not giving up much by not holding US dollars. But with the Fed expected to keep up its tightening cycle and the central banks of other developed countries showing signs of being on hold, the yields on US assets are starting to become more attractive.
   The dollar rallied strongly last week following weeks of heavy losses after a string of central banks, starting with the Bank of Canada, opted to hold rates steady rather than raise them. Some of the banks, commenting on keeping their interest rates steady, cited worries about the strength of their currencies and the negative effect higher rates might have on their economies.
   As widely expected, the Fed on Tuesday raised its benchmark federal funds rate by a quarter-per centage point to 2.25 per cent. The funds rate is now higher than the comparable euro zone rate for the first time in more than three years.
   Many economists expect the European Central Bank will keep its rate on hold at 2 per cent until the second half of 2005.

A weakening dollar is a red flag warning policy-makers to address the widening US current account deficit, the International Monetary Fund’s chief economist said Tuesday.
   In remarks prepared for a banking conference in Sydney, Australia, Raghuram Rajan said the United States needs to cut its current account shortfall—now running at $600 billion—by somewhere between one half and two thirds.
   “The United States with its higher productivity growth and younger population can sustain a deficit in the medium term of between 2 and 3 per cent of (gross domestic product) without it exploding,” Rajan told the Australasian Finance and Banking Conference.
   Despite the cautionary tone of his remarks, Rajan said the dollar’s fall was not yet disorderly and added there was nothing yet to suggest private investors had lost their appetite for US assets—an appetite that has been sustaining the US trade shortfall.
   “However, there is a small but growing risk that they will,” he warned.
   Should the currency market turn rocky, monetary policy was the first line of defense, Rajan said.
   He said a further sharp rise in the euro would create conditions for the European Central Bank to lower rates, while a significant fall in the dollar should impel the US Federal Reserve to raise rates sooner.
   Coordinated foreign exchange intervention could also reduce volatility if markets turn disorderly, Rajan said.
   The shortfall in the US current account, the broadest measure of trade since it includes investment flows, now stands at nearly 6 per cent of US GDP.

At 26, Ajit Fernandes has bought a house and a car, something his parents could never have dreamt of doing in their salad days.
   “I have bought both on credit. But I am confident of paying off my loans as the outsourcing industry is booming and salaries are rising,” said the operations manager of a suburban call centre.
   Fernandes is typical of a burgeoning breed of young people reaping the dividends of India’s economic reforms.
   Armed with confidence in the future and hefty wallets, they are splurging on items from branded clothes to plush apartments.
   Indeed, the rise of the urban consumer has been a feature of India’s economic transformation over the past decade.
   And Indians are young, their median age is 24, and they are not nervous about forking out on credit for pricey global brands.
   “Today, kids of 17-18 years earn to augment their allowances. They don’t know the days of slow growth, frugal lifestyles and unbranded products. For them, a $300 mobile phone is no issue,” says Vatsala Misra, a consultant at KSA Technopak.
   In rural areas, business is looking to a massive market of 700 million to sustain the momentum of reforms.
   Urbanisation, growth in foreign direct investment and the service sector, and government plans to develop infrastructure point to rising spending in the world’s second most populous country.
   “India will become the third-largest (consumer) market globally in terms of volume in the next 5-10 years,” following the United States and China, said V. Chandramouli, marketing head at Mirc Electronics.
   India’s rural population is more than twice as big as its urban one but far poorer.
   “India’s income demographics will be unrecognisable by the end of the decade,” said R. K. Shukla, an economist at the independent National Council of Applied Economic Research (NCAER) think-tank.
   The number of middle- and high-income households is growing fast while that of poorer families is shrinking, an NCAER survey of 450,000 households published in May showed.
   Rural purchases made up 56 per cent of all purchases in terms of volume in the financial year through March 2002, climbing from 44 per cent in the mid-1990s, the survey found.
   Companies are betting on these changes in the world’s 12th- largest economy. -
   “There is a very clear boom in terms of consumer spending,” said Ravinder Zutshi, director at Samsung India Electronics Ltd.
   The South Korean giant’s Indian unit expects a 40 per cent jump in sales in 2004 from a year earlier.
   “The attitude is shifting from savings to spending in a very big way in this country, which is needed for its development, as demand fuels growth.”
   As spending rises, economic growth is expected to average more than 7 per cent in the two years through March 2005.
   Yet Indian demand is a far cry from that of China. Indians will buy up to 9 million televisions this year, compared with up to 30 million in China.
   Indian consumers are starting from a low base, with per capita income of $530 in 2003, World Bank figures show. That’s less than half per capita income in China and just 1.4 per cent of that of the United States.
   But there lies its potential. Management consultants AT Kearney’s survey of global executives in October listed India as the third-best destination for foreign direct investment, after China and the United States.
   Much of India’s consumption is driven by its middle class of about 300 million, concentrated in urban areas that have grown rapidly during a decade of liberalisation.
   Thriving activity in the service sector has spawned a myriad of job opportunities in the
   cities.
   Consultant KSA Technopak said each of India’s 25 million more affluent households spent an average of $1,500 in 2003 on discretionary purchases, a jump of 16 per cent from a year earlier. This year’s growth could be comparable.
   Already, India ranks fifth among emerging retail markets, say property consultants Knight Frank.

China has set an 8 per cent growth target for 2005 and aims to peg inflation at around 4 per cent to guide the economy towards a soft landing, government sources and economists said today.
   The government had abandoned its long-standing 7 per cent economic growth target to reflect the real picture of the economy, which is expected to grow more than 9 per cent this year despite official curbs to cool growth, they said.
   The economy grew an annual 9.1 per cent in 2003.
   “The economic growth target has been set at 8 per cent for next year and the target for inflation will be around 4 per cent,” said an official at the State Reform and Development Commission, which oversees the economy.
   “The government’s view is that growth cannot be too fast and cannot be too slow,” said the official who declined to be named.
   China had aimed for an average annual economic growth rate of seven per cent between 2001 and 2005, viewing that as the minimum rate to help create more jobs to soak up laid-off state workers.
   “The 7 per cent target has been exceeded every year in recent years and has lost its meaning as a guide to the economy,” said an economist at government think-tank State Information Centre.
   The government issues annual economic targets as a legacy of a central planned economy, but the goals are no longer mandatory.
   Worried economic boom could turn to bust, China has tightened credit to curb investment in sectors such as steel and property and raised interest rates for the first time in nine years.
   Economic growth has slowed for several quarters in a row but was still a robust 9.1 per cent in the year through the third quarter. Consumer inflation eased sharply to 2.8 per cent in the year to November from 4.3 per cent in the year to October.

China’s economic juggernaut was blamed for inflicting new misery on Canadian blue collar workers yesterday, as a Quebec textile town reeled from factory closures which will cull hundreds of jobs.
   Fierce competition from China and the unusually firm Canadian dollar are turning the small town of Huntingdon on the US-Canada border into a ghost town, with six factories set to close with the loss of more than a quarter of the work force.
   “A tornado would have done less damage,” Stephane Gendron, the town’s mayor was quoted as saying by the Montreal Gazette newspaper.
   At least 800 people, from a community of only 2,600 people will lose their jobs—and there is no hope that their skills can be put to good use in other employment.
   US-based Cleyn and Tinker plans to move operations to its North Carolina plants and close three Huntingdon factories by the end of May, the Gazette reported.
   In another pre-Christmas bombshell, a second firm, Huntingdon Mills, which has 250 workers, will close down on Friday, the paper said.
   “China has become a tremendous force. It was impossible for us to make a profit,” said Jonathan Hurtsfield-Meyer, president of Cleyn and Tinker, who bemoaned how the weakening US dollar had sapped the firm’s competitive advantage.
   “When the US dollar is 1.35 Canadian, we can compete; at 1.30 we can still compete. When it got down to 1.19, it became completly and absolutly non competitive,” Hurtsfield-Meyer told the gazette.
   China’s lead role in the global textile market looks set to become even more predominant when decades-long quotas which have governed the apparel trade will be lifted on January 1.

Argentina’s economy minister yesterday threatened to break a South American free trade accord unless Brazil agreed to concessions, dealing a blow to the beleaguered trade bloc on the eve of a regional ministerial summit.
   Argentine Economy Minister Roberto Lavagna said Argentina would break an accord signed with Brazil four years ago that would free up regulated trade in automobiles starting in 2006.
   Economists and academics say the outlook is bleak as the four Mercosur nations—Argentina, Brazil, Uruguay and Paraguay—prepare to meet along with associate members Chile and Bolivia to mark the 10 years since the customs union took effect.

Thailand has complained to the World Trade Organisation (WTO) about US anti-dumping duties on its shrimp exports, arguing that the way they have been applied breaks trade rules, a Thai diplomat said Tuesday.
   The complaint stems from the US Commerce Department’s decision last
   July to impose provisional dumping duties of 5.56 per cent to 10.25 per cent on imports of frozen and canned shrimp from Thailand.
   “Thailand has asked for consultations (with the United States),” said the Thai diplomat, who asked not to be identified.
   He was referring to the first phase in any WTO dispute during which the two sides have 60 days to meet and see if they can resolve their differences before a panel of trade judges is set up to investigate the complaint.
   The United States also imposed duties on shrimp imports from Brazil, Ecuador and India, but it was not clear whether they, too, would become co-complainants along with Thailand.
   In applying the duties, the US alleged that the shrimps were being exported at excessively low prices, so hurting local producers. But Thailand disputes the US findings.

Sprint Corp Wednesday agreed to buy mobile telephone company Nextel Communications Inc. in a deal worth $35.17 billion to gain more business customers and more airwaves to transmit calls.
   The deal, which was widely expected, would combine the No 3 and No 5 US wireless carriers and create a new company with about 40 million customers, greatly narrowing the gap with industry leaders Cingular Wireless and Verizon Wireless
   Sprint plans to spin off its local telephone business to shareholders of the new company, to be called Sprint Nextel, as part of the deal.
   The transaction values Nextel at $32.63 per share based on Tuesday's closing prices, representing a premium of almost 9 per cent over Nextel's closing price of $29.99 on Nasdaq on Tuesday.
   Nextel shares rose 2.5 per cent to $30.75 in pre-market trade on the Inet electronic brokerage system, and Sprint shares fell nearly 3 per cent to $24.40.
   The companies, which have a combined market capitalization of about $70 billion and had combined revenue of $40 billion for the 12 months ended Sept. 30, said they expect to derive savings of about $12 billion from the deal, which the boards of both companies have unanimously approved.
   The combined revenue figure includes about $6 billion from Sprint's local telephone business.
   The deal leaves the company's next biggest competitor, T-Mobile USA, owned by Deutsche Telekom AG, a distant fourth among US national carriers with about 16.3 million customers.
   Under the terms of the deal, existing Sprint shares will remain outstanding and Nextel shares will be converted into shares of the new company and a small amount of cash, valuing each Nextel share at about 1.3 shares of Sprint Nextel common stock.
   The stock and cash allocation will be determined at the closing to ensure the local business spinoff is tax free, and the cash portion of the deal will not exceed $2.8 billion. At current figures, Nextel shareholders would receive about 1.28 Sprint Nextel shares and 50 cents in cash for each Nextel share, the companies said.
   Sprint Chairman and Chief Executive Gary Forsee is to become CEO of the new company, and Nextel CEO Timothy Donahue will become chairman.
   Sprint Chief Operating Officer Len Lauer and Nextel Chief Financial Officer Paul Saleh will maintain their roles at the new company.
   The local telecom business will have its own management team and board of directors.
   The spun-off local telecoms business is expected to pay quarterly dividends, but Sprint Nextel plans to stop paying dividends following the spinoff, the companies said.
   The deal, which is subject to shareholder and regulatory approval, is expected to close in the second half of 2005. Analysts widely expect regulators to approve the deal.
   The new company, over time, will move Nextel's network to the same technology that Sprint uses.

Citibank may issue Amex cards in India
The US bank will consider launching a similar product in India after reviewing its experience in US . The Amex credit card issued by Citibank will be accepted on the Amex global merchant network. Citibank’s spokesperson here said the agreement was for the US market and would not be applicable in India, but banking sources said the decision would pave the way for the American bank to issue Amex cards here as well. The Citibank spokesperson added that the bank would review its experience in the US in December 2005. Based on that, it would decide on expanding the business outside. An Amex bank official said this would be a great booster for the card businesses of Amex. Citibank has a great customer base, and this would open up new opportunities for Amex, he said. Citibank is the biggest credit card issuer in the US, with over 100 million cards. Amex has issued over 60 million cards in the US market.
— Internet

Worldwide PC market to double by 2010
A US high tech market research firm predicts that the worldwide personal computer market will double by 2010. Forrester Research said in a new study that the number of PCs will reach almost 1.3 billion by 2010, about 725 million more than today, with 150 million coming from the more mature markets in the US, Europe, and the Asia-Pacific region. But it points out that more significant growth will come from emerging markets, such as China and India, where 566 million new PCs will be in use by 2010. The research firm also found that competition for market share will pit industry leaders like Dell and HP against local emerging market manufacturers and fundamentally change the rules of the game. — Xinhuanet
— BSS

Google to scan books from big libraries
Stacks of hard-to-find books are being scanned into Google Inc.’s widely used Internet search engine in its attempt to establish a massive online reading room for five major libraries. Material from the New York public library as well as libraries at four universities — Harvard, Stanford, Michigan and Oxford — will be indexed on Mountain View, Calif.-based Google under the ambitious initiative announced late Tuesday. The Michigan and Stanford libraries are the only two so far to agree to submit all their material to Google’s scanners. The New York library is allowing Google to include a small portion of its books no longer covered by copyright while Harvard is confining its participation to 40,000 volumes so it can gauge how well the process works. Oxford wants Google to scan all its books originally published before 1901.
— Internet

Jobless level continues to fall
The number of people out of work in the UK fell by 29,000 between August and October to 1.39 million, the latest official figures have shown. The amount of people claiming jobless benefit last month also fell, by 3,400 to 833,200, according to the Office for National Statistics (ONS). However, average earnings rose by 4.1% in the year to October, up by 0.3%. The number of people not looking for work - the so-called economically inactive - rose by 5,000 to 7.9 million This total covers people who have been laid off, students, those on incapacity benefit and those tending to sick or elderly relatives. Manufacturing jobs fell 112,000 to 3.26 million in the three months to October, leaving the number of people working in the industry at the lowest level since records began 26 years ago. Jobs in textiles, leather and clothing firms were the most badly affected. Meanwhile, the number of working days lost due to industrial action fell to 6,000 in October, the lowest monthly figure for five years.
— BBC

70pc Pak cars sold through bank schemes
As many as 70 per cent of locally assembled cars are being sold through leasing and bank financing schemes while the rest of 30 per cent are being delivered on cash basis. Majority of car buyers belong to corporate sector, business professionals, executives of multinational companies etc., while businessmen and feudals prefer to buy on cash basis. Buyers’ passion for new cars could be gauged from car financing and leasing figures that boosted to Rs24.5 billion in 2003-2004 as financing authorities had been charging interest rate of seven per cent. In 2001-2002, the combined net credit by banks and leasing companies was Rs4.47 billion and the interest rate was being charged at 17 per cent. In 1997-1998, there was hardly 20 per cent share of cars being sold through leasing and bank schemes and only Rs737 million were disbursed for leasing and auto financing of cars at the interest rate of 23 per cent. Senior executives of Indus Motor Company (IMC) expect FY05 as another buoyant year for the auto industry in terms of car sales through leasing and bank financing depending on the continuity of the positive economic indicators.
— Dawn

Basilea in talks with J&J over antibiotic
Switzerland’s Basilea is in talks with a subsidiary of healthcare and consumer products maker Johnson & Johnson over a licensing agreement for the Swiss biotech firm’s BAL5788 antibiotic. Basilea said on Wednesday it was currently in negotiations with Ortho-McNeil Pharmaceutical Inc—a Johnson & Johnson subsidiary—over a licensing agreement for the broad-spectrum antibiotic, but that no deal had been completed yet. Shares in Basilea rose almost six per cent on the news, although by 5:57 AM. EST they had given up some gains and were up 3.85 per cent at 81.00 Swiss francs. Basilea made the talks public after the US Federal Trade Commission said it did not oppose a possible licensing agreement between J&J and Basilea for the drug, known generically as ceftobiprole. Analysts at Morgan Stanley said the announcement indicated that negotiations were at a late stage, adding that they expected a confirmation of the deal and details of the financial terms in the next two to three months. The Swiss firm has been looking for a license partner for the drug since Swiss drugmaker Roche AG decided not to opt in and co-develop the antibiotic.
— AFP

Egypt raises Suez transit fees
Egypt has decided to increase transit fees for ships using the Suez Canal by an average of three percent next year, the canal authority said Tuesday. The decision affects all categories of ships using the canal, one of the world’s major waterways which links the Mediterranean with the Red Sea.
— AFP

Fiat talks tough ahead of key GM meeting
Fiat kept up the pressure on General Motors Corp. before a key meeting between the two carmakers on Tuesday, saying the US group would not be able to shut down the Italian carmaker if it ends up having to buy it. Fiat and GM executives are due to meet later on Tuesday in Zurich, little more than a month before the start date of Fiat’s option to sell the rest of Fiat Auto to GM. Fiat Chief Executive Sergio Marchionne told the Financial Times that GM would find it hard to allow loss-making Fiat Auto to dwindle if it ended up in control. “There is a very good argument to say that the Italian car plants could benefit from the relocation of other GM businesses in Europe,” Fiat insists that it still has the right to sell the 90 per cent of Fiat Auto that it owns to GM.
— Reuters