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The shrimp sector, the country’s second largest export earner, has landed in a fresh crisis as its major consumer, the European Union, has become increasingly concerned over presence of nitrofuran in some consignments over the last few months.
   The detection of the previously unknown substance has upset the shrimp processors and exporters, who have invested significantly since 1997 to ensure product quality. And the fisheries department, the official agency for quality certification, is also ill-equipped to make sure that shrimps will be free from nitrofuran.
   European Commission officials here are stressing that Bangladesh’s frozen food must comply with strict European health and safety rules to keep its market unharmed.
   ‘It’s not a trade issue. It’s a health issue,’ said Esko Kentrschynskyi, head of EC delegation in Dhaka.
   ‘Consumer policy in Europe is strict and requires high standards for health and safety,’ he told shrimp sector people in Khulna during his two-day trip to the region.
   Visiting a number of shrimp processing plants and hatchery, the EC envoy appreciated the efforts made by the frozen food sector and the government for improving the factory standards, but stressed that a lot more need to be done.
   He said the EC offers Bangladesh a 10 million euro grant for supporting the country’s export sector to improve quality and standards, the EU ambassador said in Khulna on Thursday.
   The quality support programme likely to be signed in next two months, will mainly focus on shrimp sector and help exporters achieve the international standards and comply with EU safety rules, he told the members of the Bangladesh Frozen Food Exporters Association on Wednesday in Khulna.
   Bangladesh’s frozen foods enjoy duty-free access to Europe, which is the single largest buyer of Bangladesh’s shrimps, he said.
   He said that he received ‘alerts’ from the Brussels health department almost every week regarding Bangladesh’s shrimp consignment and routinely forwarded those to the Bangladesh authorities.
   The envoy did not elaborate the ‘alerts,’ but said, ‘It’s possible to resolve those.’
   He reminded the temporary ban clamped by the EU on Bangladesh’s shrimp in 1997 and also praised the way the country overcame the crisis
   by vigorous drives.
   ‘EU is always with you to help you raise trade capacity and improve quality,’ he said.
   Ana Beatrix Martins, the desk officer for Bangladesh at the EC headquarters in Brussels, who also accompanied Esko in the trip, said a delegation of EC will visit here at the end of the current year to see the safety standards in the shrimp sector.
   Shrimp processors claimed that their plants are well equipped to make sure that shrimps processed and packed for exports are free from health hazards. ‘There is no way for shrimps to be contaminated with nitrofuran at factory level,’ said Humyan Kabir, managing director of Amam Seafood Industries Ltd.
   ‘All factories have the same safety and hygiene facilities. Maybe smaller or bigger, but they maintain the same standards,’ said Kazi Belayet Hossain, vice president of the frozen food association.
   Secretary general of the association Towhidur Rahman said the industry needs a centralised landing system, a long term action plan for pond management, hatchery process and farmers’ motivation to ensure quality supply of shrimps to the plants. He said the association needs technical assistance to develop a reference laboratory in its Khulna office.
   SM Amzad Hossain, chairman of Rupsha Fish and Allied Industries Ltd claimed that Bangladesh’s shrimp factory conditions are far better than Indian ones, and better in regional counts also. ‘There is no scope for nitrofuran or any contamination of this sort in the factory,’ he said.
   But there are problems in the production chain, from nursery up to the shrimp market places, which are beyond their control, he said.
   Deputy director for quality control of the fisheries department Ashraf Ali Sheikh said their laboratory is not in a position to check the presence of nitrofuran, but hoped that they would have the device
   ‘soon.’
   He, however, admitted that they can not say for sure that such contamination would not take place at farmers’ level, since they do not have any list of nearly one lakh farmers. Imported shrimp feeds might also contain such ingredients, he said.
   European Commission officials in Dhaka said that they commission would provide sophisticated instruments as soon as the Khulna fisheries department completes its new laboratory building.
   Frozen foods, mainly shrimps, fetched $390 milion in 2003-04 fiscal year.

Stocks remained cool past week ending Friday and are unlikely to see any major change ahead of the budget, scheduled to be placed on June 9 as investors seem to wait to see what the finance minister has on his plate for capital market, stock brokers said.
   The general index of the Dhaka Stock Exchange slipped very marginally by 0.23 point or 0.01 per cent to 1654.22 on Thursday, the week’s last trading day.
   The All Share Price Index, however, gained 4 points or 0.31 per cent to 1278.28.
   Apart from the wait for the budget, investors prefer to remain in the sideline without taking risk as June is also the month of half-yearly financial adjustments for the banks and financial institutions, stockbrokers said.
   ‘You don’t know what is going to happen in the next budget. Everybody is eagerly waiting to see the upcoming budget,’ said Sharif Ataur Rahman, managing director of Sar Securities Ltd.
   The market has remained invariable for the last couple of weeks after gaining some ground since the index bottomed to 1435 points on May 2.
   Stockbrokers said that any new tax burden on the corporate sector may shake the investors’ confidence in the capital market as it would have a negative impact as far as profitability of the companies is concerned.
   ‘Investors seemed to be a bit cautious ahead of the budget. Everybody remained silent,’ said Kaiser Islam, managing director of the LRK securities.
   ‘Any bad news for the capital market would obviously have a negative impact,’ he cautioned.
   Sources in the National Board of Revenue told New Age recently that the government may impose a provision of tax at source on the commission of the brokers in the upcoming budget.
   At present, brokerage houses have the provision to pay tax on their earnings in line with that of corporate sector.
   ‘We don’t mind if this is the final one,’ said Kaiser demanding that the present system should be scrapped.
   Rahman, who does not see any negative news except the liquidity problem, expects that market would likely to become vibrant in July provided that budget gets even with the capital market.
   Brokers said that there was no major price fluctuation of stocks in the past week, which saw an average daily transaction of Tk 21 crore.
   Drug maker Beximco Pharma announced that it would raise ?27 million or about Tk 315 crore funds from the London Stock Exchange to facilitate its expansion plan.
   The company would raise the fund through an instrument called global depository receipt (GDR) and would join alternative investment market of the London Stock Exchange by July 2005, said Salman F Rahman, vice-chairman of the Beximco Group at the annual general meeting of the company on Thursday.
   Two-hundred and sixteen issues traded in the past week. Of them, 99 issues gained and 94 issues declined while 23 issues remained unchanged.
   Beximco Pharma, Southeast Bank, Exim Bank, Keya Cosmetics, Bangladesh Online, Padma Textile, Square Pharma and AIMS Mutual Fund and Aftab Automobile were most active shares at the bourse.
   In category A, Aftab Automobile, 2nd and 5th ICB Mutual Funds, Beximco Pharma, AIMS Mutual Fund, Eastern Bank and Apex Foods were the major gainers.
   Market capitalisation stood at Tk 21327.23 crore, up by 1.4 per cent from the previous week.
   Weighted average price-earning ratio, which determined the number of years it would take to recover the investment (risky-ness), of the securities became at 15. 61 at the end of the week compared with 15.5 a week back.

After being diagnosed HIV positive two years ago and forced to quit his job due to failing health, Jabulani Ndlovu has relied on charity for daily meals but these days getting food is a problem, like for most Zimbabweans.
   Ndlovu’s wife Zodwa says local charities stopped food supplies to poor patients in their township near Zimbabwe’s second city Bulawayo in January following a crippling food shortage that has hit the southern African nation.
   She says she now struggles to ensure that her husband, who used to work in a bakery, has a balanced diet.
   ‘Sometimes we give him sadza (traditional thick porridge) and matemba (dried fish). Sometimes when we get a few dollars to spare, we try and buy him things like ox liver,’ she said.
   ‘But on most days, all there is to give him is plain corn porridge without salt or sugar,’ she said.
   Zodwa says her has been bedridden ever since his diet changed.
   ‘He was sick all along, but he could get around the house, feed and bathe himself. Now, he just lies in bed, I have to feed him and turn him to avoid bed sores and he cannot go to the toilet on his own,’ she said.
   President Robert Mugabe’s government says some 2.8 million people are in need of emergency food assistance but aid agencies and the opposition estimate that about four million Zimbabweans—close to a third of the total population of 13 million—are going hungry.
   Families like the Ndlovu are struggling either because of the scarcity of food or because of sky-high prices affecting many basics like cooking oil, sugar, milk and wheat flour.
   Nanzeni Dladla, an HIV and AIDS counsellor at a local clinic, said more and more people with HIV were malnourished in Zimbabwe, which has one of the world’s highest AIDS infection rate, affecting one in four adults.
   ‘People are suffering. Some of them are not really sick, it’s just because they are not getting the right food, they are hungry,’ said Dladla.
   Zimbabwe is experiencing a serious grain deficit blamed on a drought and land reforms launched in 2000 in which the government seized white-owned commercial farms to give to landless blacks.
   An estimated four million Zimbabweans out of 11.6 million could face starvation unless they get food aid, according to UN World Food Programme chief James Morris who visited the country last week and held talks with Mugabe.
   Mugabe, who scoffed at food offers last year saying his country produced enough and did not want to ‘choke’ with surplus food, accepted Morris’ offer for food aid on ‘humanitarian’ grounds.
   His government, which is under fire from the West for the alleged suppression of human rights and democracy, has however stressed that it will not accept aid if strings are attached.
   Even charitable organisations are finding it tough to get food for distribution.
   Some churches that feed the sick and victims of Mugabe’s regime say they are now forced to dole out cash.

Prices of most essentials marked a fresh rise on the city’s kitchen market last week ending Friday while vegetables prices dropped slightly or remained static on adequate supply.
    ‘Supply of vegetables is satisfactory now as the farmers opted for early harvest in fear of rains,’ said a greengrocer.
   Prices of some vegetables including potato, ladies finger, aubergine, papaya, tomato, patal and kakrol marked a decline.
   Soybean oil and pulses saw a fresh rise last week, while rice prices remained unchanged.
   Canned soybean oil price rose by Tk 2 per litre in the week after a Tk 3 jump two weeks ago. On Friday, a 5-litre can of Teer brand soybean oil was sold at Tk 265, Rupchanda at Tk 267 and Mostafa at Tk 263. Price of loose soybean oil rose to Tk 47 from the previous week’s Tk 43 per litre.
   The price of per kg potato was Tk 8, while most of the vegetables priced between Tk 6 and Tk 10, except off-season tomato that sold at Tk 20 per kilogram. Summer fruits have flooded city markets and were having good sales as prices of mango, the king of fruits, seemed lower compared with that of previous year. Fine varieties of mango are selling at Tk 40 per kilogram at an average, while delicious Rajshahi litchi sold at Tk 150 per hundred on Friday.
   Local variety onion sold at Tk 12-13 per kg, down by Tk 1 compared to the previous week’s price.
   Prices of all varieties of fish remained high in the city market. ‘The supply of fish in the market is low as there is no rain for long,’ said Mohammad Ruhul, a fish trader. He forecast that fish prices would remain high until the onset of monsoon, when there will be good catch of hilsha and other varieties.
   Prices of broiler chicken, beef and mutton marked a fall in the week. Beef sold at Tk 100-110, mutton Tk 150-Tk 160 and broiler averaged Tk 60.

The Commerce Minister, Altaf Hossain Chowdhury, Friday said Bangladesh is the emerging tiger of South East Asia despite facing lots of obstacles. Rapid industrialisation is leading the country to such feat following excellent growth in the private sector. The minister was speaking at the business award distribution ceremony of the ‘Arthakantha Business Award-2004’.
   The magazine awarded 27 people and company in the economic field for their outstanding achievement..
   Most respected company award went to TM International (service provider of AKTel mobile), most competitive multinational company award went to Reckit- Benkiser. Entrepreneur of the year award went to Abdul Matlub Ahmed, Chairman of the NITOL group where businessperson of the year went to Golam Dastagir of Gazi tyres and Syed Eskandor of Dandy Dying.
   Faridur Reza Sagar of private television network Channel-I received the entertainment personality award where lifetime achievement award went to Mohammad Majibur Rahman, chairman of the BRB group.

India hopes to sign a deal next week to double liquefied natural gas imports and begin negotiations for a $4 billion gas pipeline from Iran, as the energy-hungry nation seeks to secure new supplies.
   When Mani Shankar Aiyar lands in Islamabad on Sunday, the first visit by an Indian oil minister to Pakistan in decades, his priority will be to thrash out security concerns about the pipeline that will run through Pakistan.
   ‘I will discuss transit issues like the route of the pipeline, transit fee et cetera with Pakistan as all this has important bearing on the cost of gas,’ Aiyar said. India, which imports 70 per cent of the oil it consumes and produces barely half the gas it needs, started importing LNG last year and is expected to buy 7.5 million tonnes in the current fiscal year to end-March.
   Imports are expected to top 100 million cubic metres of gas a day in the next five years and double the volume within a decade to feed India’s rapidly expanding economy, which is expected to grow 7-8 per cent a year.
   India has been competing with China in the race to buy stakes in foreign oil and gas projects to secure energy supplies.
   The government expects the share of gas in India’s energy basket to rise to more than 20 per cent in the next two decades from about 7 per cent now. To meet the growing demand, India is also negotiating piped gas imports from Myanmar and Turkmenistan. Aiyar, who is expected to meet President Pervez Musharraf and oil sector officials, will also urge Pakistan to lift a ban on importing Indian diesel.

The cellphone operator AKTEL signed a corporate agreement with Shah Fatullah Textile Mills Ltd in Dhaka on Thursday, says a press release.
   Md Nasir Bin Baharom, managing director of AKTEL and Mohammad Shajahan, managing director of the textile mills, signed the agreement on behalf of their respective organizations.
   Under the agreement, the textile mills will get reduced call rate and one-point customer service from AKTEL.
   Jose Ravee, general manager (marketing), Mashuk Rahman, head (corporate affairs), Tofazzul Hossain, head (corporate sales) of AKTEL and Ashraful Alam, director of Fatullah Textile Mills, among others, were present in the signing ceremony.

The annual branch managers' conference of Peoples Insurance Company Ltd. was held in Dhaka recently, says a press release.
   The chairman, board of directors of the company, Md Abul Bashar, presided over the conference arranged at the company's head office.
   The founder chairman of the company, Giasuddin Ahmed and former chairmen Nazmul Ahsan Khaled, managing director Syed Zahrul Huq and directors Engr. M. Abu Taher, AKM Aminul Mannan and ex-director Hasan Ahmed spoke at the conference.
   Business performance of difference branches of the company for the year 2004 was discussed in the conference.
   The conference was told that the company's premium income increased in 2004 compared to the previous year's income.

Eastern Bank Ltd. recently signed memorandums of understanding with 11 restaurants of Dhaka city, says a press release.
   The restaurants are Villa Vista, EFES, Thumri, Topkapi, Sukhothai, Mondira, Santoor, La Vinci Hotel, Spitfire, Le Saigon and Moven Pick Ice Cream Parlor.
   Under the MoUs, EBL customers will get 10 per cent -20 per cent discount on their food bills at these restaurants by showing their Visa Electron Debit Card.
   Mashrur Arefin, head (consumer banking) of Eastern Bank Ltd. and the owners of the restaurants signed MoUs on behalf of their respective companies.
   Kazi Mahmood Sattar, managing director, Ali Reza Iftekhar, deputy managing director, Sohail RK Hussain, head
   (corporate banking) and other high officials of the EBL were also present in the signing
   ceremony.

Oil prices eased further today after an increase in U.S. crude stockpiles pushed prices down almost $1 a day earlier, the first drop in over a week, but tight heating oil supplies could limit the fall.
   US light sweet crude for July delivery fell 9 cents to $53.54 a barrel in early Asian
   trade, weighed down by a surprising 1.4 million-barrel build in crude oil stocks, which jumped to their highest level since 1999.
   London Brent crude shed a cent to $52.39 a barrel after falling nearly $1 on Thursday.
   But a 700,000-barrel fall in heating oil stocks sparked an initial surge in US oil prices on Thursday above $55 on early worries of insufficient stocks ahead of winter.
   Overall distillate stocks rose 700,000 barrels. But the Energy Information Administration (EIA) report showed that US demand for distillates such as diesel and jet fuel was growing at more than 5 per cent over last year, nearly three times faster than demand for gasoline.
   Gasoline stocks in the United States rose 1.3 million barrels to 216.7 million barrels, leaving them in the high end of the average range, the EIA said.
   Oil speculators and funds have shrugged off a stronger dollar and boosted crude oil prices to five-week highs earlier this week, as the market turned its focus to surging diesel demand worldwide.

The European Union will ask OPEC to raise production when the bloc and the oil producing cartel meet on June 9, a spokesman for energy commissioner Andris Piebalgs said on Friday.
   “The security of supply will be the main issue and the commission will ask OPEC as well to raise production,” said the spokesman, Rupert Krietemeyer.
   OPEC’s president Sheikh Ahmed Fahd al-Sabah said on Wednesday that the cartel would most likely maintain current output levels, when it meets in Vienna on June 15.
   He also said it would not increase its official output quota to account for over-production.
   The 11 members of Organization of Petroleum Exporting Countries 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.

Pacific islands fisheries officials are close to reaching basic agreement on a major change in the management of tuna stocks to ensure fishing remains sustainable and to increase income for the island nations, officials said.
   Regulation of fishing has in the past focused on limiting the number of fishing vessels working the region.
   But as a new generation of high-tech fishing vessels using huge nets—known as ‘super’ purse-seiners—become more efficient at catching fish, the Pacific countries are moving towards limiting the number of fishing days within their 200-mile (350-kilometer) economic zones.
   Although stocks of skipjack tuna, the main fish targeted by purse seiners, are still seen as healthy, the body policing Pacific fishing, the Forum Fishing Agency (FFA), wants to ensure stocks remain sustainable.
   ‘The emphasis of the new scheme is to deal with the vessel size and capacity,’ said FFA director Feleti Teo in the Marshall Islands capital of Majuro.
   The new plan, called the ‘vessel day scheme’, will also boost the amount of money Pacific nations earn from foreign fishing companies by giving the islands greater control of their primary resource.
   An estimated two billion US dollars worth of tuna is fished out of the Pacific annually, but only a small fraction of that money is netted by local islands.
   The FFA member countries are developing a formula to allocate a per centage of the total agreed-to fishing days to each island nation. Foreign fishing companies will have to negotiate with fishing nations to buy fishing days in each of the islands.
   The competition among fishing countries for the limited days will increase the economic benefits to each island.
   This week the eight Pacific islands—Papua New Guinea, Solomon Islands, Kiribati, Federated States of Micronesia, Palau, Nauru, Marshall Islands and Tuvalu—that control the majority of the tuna stocks in the region, are meeting in Majuro to discuss current agreements, strategies and options.

Trade ministers from 21 Asia-Pacific nations agreed here on Friday to a formula that would be used to cut tariffs on non-agricultural products, organizers said.
   The ministers attending the Asia-Pacific Economic Cooperation forum adopted the so-called ‘Swiss formula’ to calculate future tariff reductions in the non-agricultural market access field.
   The agreement was a set-back for developing countries who were pushing for a different method that was viewed as more tolerant of their higher protectionist tariff rates.
   ‘This 2005 Jeju APEC meeting continues to follow the successful path of the recent meetings, by bringing to fruition a consensus on supporting (the) Swiss formula as the tariff reduction formula,’ said South Korea’s trade minister Kim Hyun-Chong, who chaired the two-day talks that ended here on Friday.
   ‘This achievement in NAMA will provide the much needed political impetus to the NAMA Doha negotiations.’
   Developing countries in general maintain higher tariff rates and this formula will result in those nations cutting tariffs by greater margins after the favored ‘Girard formula’ was discarded.
   Australian Trade Minister Mark Vaile said the agreement was a significant step that would inject new momentum into the World Trade Organisation negotiations.
   ‘The Swiss formula, as its known, involves steeper cuts to higher tariffs in order to harmonize tariff rates across countries. This greatly reduces the gap between high and low tariff rates and in addition sets a top limit for all tariffs,’ he said in a statement.
   US Trade Representative Rob Portman said the agreement would be ‘very helpful’ in ensuring that the WTO Doha round bears fruit.
   The WTO launched the Doha Round of trade talks in the Qatari capital in 2001, aiming to break down more tariffs and other barriers to commerce and to try to use trade to give developing countries a boost.
   But discussions have stumbled repeatedly in the past four years.
   ‘By adopting the Swiss formula, we have provided an important encouragement to the talks ... ,’ said Portman.
   He said this held the potential for a ‘dramatic improvement’ in global economics by pulling some 500 million people out of poverty around the world and bringing an additional 200 billion dollars into the world economy.
   Differences over how to calculate future tariff cuts in non-agricultural products emerged as a major stumbling block in WTO efforts to come up with a viable plan for the future by July.
   The ‘breakthrough’ is particularly positive for all WTO members as they prepare for the much anticipated WTO Ministerial Conference to take place in Hong Kong in December, APEC said in a statement.
   The head of the WTO on Thursday urged governments to step up efforts to push forward talks to liberalise global commerce, warning that a negotiating deadline is near.
   Supachai Panitchpakdi said on the sidelines of the APEC forum that the international community should make an effort to conclude the long-delayed accord by 2006.
   Member states earlier this year set themselves an intermediate negotiating target of July.
   By the end of next month, they aim to have an idea of the shape of the wide-ranging accord that would be put on the table at the ministerial meeting in Hong Kong at the end of this year.
   A WTO summit in Cancun, Mexico, collapsed in 2003 amid splits between rich and poor countries, plunging the talks into deadlock.

The Japanese government today threw cold water on optimism the Chinese market for imports will keep surging forward, cautioning companies they are taking risks if they expand in hopes of more exports.
   China’s market has been a key driver of Japan’s economic recovery, but a government report said the trend no longer held true in the first half of 2004 when Japan’s economic growth rate rose despite a slowdown in exports to China.
   The government report on manufacturing said that the driving force of the Japanese economy was increasingly shifting from foreign demand to domestic demand.
   The annual report noted year-on-year growth in Japan’s exports to China slowed to 16.4 per cent in value between October and December 2004 from a record 46.3 per cent two years ago.
   ‘China-bound exports are seeing slower growth as production capability there has improved,’ the report said.
   ‘There is a concern that companies would face difficulty in recovering costs or worse earnings on heavier inventory stockpiles if they invest in facilities in Japan by simply assuming exports to China will keep rising,’ it said.
   China last year surpassed the United States as Japan’s biggest trading partner despite rising political friction between the Asian nations.
   But Friday’s report noted that as many Japanese companies now have footholds in China, their exports from Japan now focused on sending materials and parts for production rather than finished products.
   In turn, Japan’s imports from China have been surging with Japanese companies manufacturing products in China for the Japanese market, it said.
   Consumer spending at home accounts for 55 per cent of Japan’s Gross Domestic Product. In hopeful signs for the economy, the government said this week that unemployment had sunk to a six- year low and that wages in April rose for the first time in a year.

Belgium central bank governor Guy Quaden and ECB board member said Friday that the recent rejection of the European Union’s constitution by France and the Netherlands, was not a mandate to drop the euro.
   ‘Some governments have received a mandate from their population to not ratify the (EU) constitution project. No government has received a mandate to leave the European Union or the eurozone’, he told journalists.
   Quaden was speaking after the euro had fallen sharply against the dollar Friday following comments from Italy’s welfare minister Roberto Maroni in a newspaper saying his country should consider temporary readoption of the lira.
   The growing political crisis in the European Union over the rejection of its first-ever constitution by French and Dutch voters has cast a pall over European montary union.
   Earlier this week Germany’s Bundesbank and finance ministry were forced on the defensive to insist they supported the euro following a report that the ministry blamed the currency for the country’s weak growth.
   Quaden said that talk of a break-up of the eurozone was a ‘science-fiction scenario’ that was ‘absurd’, echoing a comment from European Central Bank president Jean-Claude Trichet on Thursday.

Britain threw down a challenge to its Group of Eight partners Friday, proposing a 100-per cent write-off of the hundreds of billions of dollars of debt owed by the world’s poorest countries.
   Speaking ahead of next month’s G8 summit at the Gleneagles resort in Scotland, Chancellor of the Exchequer Gordon Brown proposed a matching of relief on bilateral and multilateral debts.
   The savings for poor countries, most of them in Africa, would be used to pay for free elementary and high school education, the finance minister told reporters in Edinburgh.
   The proposal is the keystone of a package of ideas—described by Brown as a ‘modern Marshall plan for Africa’—that will be put to G8 leaders when they gather on July 6-8.
   Prime Minister Tony Blair, the summit host, wants the talks to focus on Africa and climate change, despite indications that US President George W. Bush will not sign onto any bold initiatives.
   Blair travels to Washington on Monday for talks with Bush that will include the G8 agenda.
   Brown said it was time for rich countries ‘to commit to wiping out debt repayments’
   from poor countries which run to the tune of between one billion and two billion dollars a year.

Who would want to be the Chinese finance minister? Jin Renqing is about to fly halfway round the world for an English breakfast and a polite but firm lecture on the need to scrap the yuan’s decade-old peg against the dollar.
   China’s national pride alone guarantees that public arm- twisting at a June 11 meeting in London of finance ministers from the Group of Seven rich democracies would backfire.
   Beijing has declared its currency regime to be a matter of sovereignty and pointedly did not send Jin to the last G7 talks.
   Yet even while officials from Premier Wen Jiabao down assert they will not bow to pressure, economists say the diplomatic calendar and more benign financial markets are opening a new window of opportunity to abandon the peg—if Beijing chooses.
   Bill Belchere, chief Asia economist at Macquarie Securities in Hong Kong, said Chinese policy makers recognised that a more market-driven exchange rate would make a lot of sense.
   ‘But this one is going to be more about political concessions that need to be made,’ Belchere said. ‘The US has showed its hand and turned this into a very big political issue. So there must be a negotiated agreement on various issues—a grand political bargain.’
   US Treasury Secretary John Snow has given China an ultimatum to reform its currency regime or face trade penalties within six months. US law-makers are preparing sanctions of their own if Beijing does not revalue soon.
   Speaking during a recent visit to Beijing, Roach urged China to take action to defuse the threat. The magnitude of any yuan move was less important than the act of changing.
   But Roach admitted to worries that China’s leaders had backed themselves into a corner. ‘For a country with an open development model, China has a hard time coping with global feedback,’ Roach said. ‘How do you negotiate if you’ve defined it as a question of national sovereignty?’
   The rising political temperature has certainly muddied market thinking. Frank Gong, JP Morgan Chase’s chief economist for Asia, says the risks have increased of both a bigger initial revaluation and of no move before the end of June.
   Gong says rising US pressure and the imposition of textile curbs last month, just as China seemed to be gearing up for change, had been counterproductive. By the same token, further delay by China would increase the danger of a trade war.
   On balance, Gong still sees a significant chance of a shift before President Hu Jintao attends the annual G7/G8 summit in Scotland in early July, while a delay beyond August could sour Hu’s planned visit to the United States in September.
   The economics are also getting more complicated. China’s trade surplus is soaring, reinforcing the case for a stronger yuan. Call it a coincidence, but there has been a flurry of comments by influential economists in official media this week reflecting unease that China is relying too much on exports.

Peru and China vowed to boost already booming trade and signed a host of bilateral agreements during a visit here by Peruvian President Alejandro Toledo, state media said Friday.
   ‘Peru warmly welcomes Chinese investment and is ready to serve as a platform for Chinese products to integrate into the South American market,’ Toledo said on a six-day trade-focused visit.
   It is his second since assuming power in July 2001.
   Following meetings with his Chinese counterpart Hu Jintao Thursday, the two sides signed seven cooperation accords, including a treaty on highway and waterway construction, the Xinhua news agency reported.
   Agreements were also inked on economic and technological cooperation, health and tourism.
   Hu said China wants to expand bilateral trade cooperation, highlighting areas such as energy, mining, agriculture, transportation and infrastructure construction.
   ‘I believe that, with our joint efforts, the China-Peru comprehensive cooperative partnership will definitely produce fruitful results and bring benefits to the two countries and the two peoples,’ Hu said.
   Peru is China’s sixth largest trade partner in Latin America, with bilateral trade of 1.9 billion dollars in 2004. Peru’s exports to China, mostly raw materials and foods, grew almost 82 per cent last year over 2003.

French hotel giant Accor on Friday announced its largest-ever expansion in Thailand and Vietnam with six new hotels, shrugging off a post-tsunami slump that has badly deflated Thai tourism.
   Accor is expanding its network of 19 hotels in Thailand by adding four newly announced properties, in addition to a resort already set to open in November on Phi Phi island, which was devastated by the December disaster.
   The new properties include two other Sofitel-branded resort hotels along the kingdom’s southern coast, a 250-room Sofitel in Krabi, on the mainland, and the Sofitel Nang Yuan Island with 79 rooms, both scheduled for a 2007 opening.
   Additionally, a Novotel is to open this November in Cha Am a few hours south of Bangkok, while a 400-room Novotel in the Thai capital opens in late 2007.
   ‘We believe this sends an important message to the travelling public that southern Thai beach resorts are back and open for business less than one year after the tsunami,’ said Accor’s managing director for Asia Pacific, Michael Issenberg.
   ‘I don’t want to underestimate the devastation of the area, the difficulty that the area is facing,’ he said. ‘But we do believe that the whole area will come back.’
   Thailand’s Andaman coast was badly battered by the huge waves of December 26, which killed an estimated 217,000 people in countries around the Indian Ocean. In Thailand nearly 5,400 died and 2,822 remain missing.

The Netherlands is not satisfied with the latest proposals by the European Union’s Luxembourg presidency for the union’s budget running from 2007 to 2013, the Finance Ministry said here.
   ‘This proposal is very far removed from what we want,’ finance ministry spokesman William Lelyveld said.
   The new discussion of the EU’s budget comes two days after Dutch voters massively rejected the EU constitution in a referendum.
   One of the main reasons for the Dutch ‘no’ to the treaty was a feeling among voters that the Netherlands was paying too much for the EU. The Netherlands is one of the largest net contributor’s per capita to the 25-nation bloc.
   ‘The Netherlands have always been clear on the issue of budget. The outcome of the referendum, although it has many causes, underlines the importance of our position,’ Lelyveld said.
   In the face of pressure from the EU’s six biggest net contributors to the budget, Luxembourg submitted a fresh proposal Thursday to limit spending and phase out Britain’s rebate on contributions to EU funding.
   Under the proposal, spending over the seven-year period would be capped at 875 billion euros (1.074 trillion dollars), the equivalent of 1.06 per cent of gross national product (GNP).
   Austria, Britain, France, Germany, the Netherlands and Sweden want the budget to be capped at 815 billion euros, the equivalent of 1.0 per cent of GNP.
   But the European Commission, which wants a robust budget to pay for ambitious programmes sought by member states, has called for a budget of one trillion euros.

A previously unknown novel by the author of ‘The Three Musketeers’, Alexandre Dumas—a 1,000-page adventure story about the start of the Napoleonic empire—hit French bookstores on Friday.
   ‘Le Chevalier de Sainte-Hermine’ (The Knight of Sainte-Hermine) first appeared in serial form in a French newspaper and lacked just a few chapters when Dumas died in 1870.
   Claude Schopp, the Dumas expert who found the book at France’s National Library, has added a short section to bring the tale to its conclusion.
   The novel completes a trilogy of works set in the aftermath of the French revolution, which begins with ‘Les Compagnons de Jehu’—written in 1857 — and continues with ‘Les Blancs et Les Bleus,’ completed in 1867.
   The chevalier is an aristocrat—the brother of two men who are killed in the previous books—who is caught between his royalist past and his fascination with the emerging Napoleonic empire.
   The book includes a swashbuckling account of the battle of Trafalgar, and explains who killed British naval commander Admiral Horatio Nelson, according to Jean-Pierre Sicre of Phebus press, which published the book.
   ‘The description of Trafalgar is indescribably brilliant. And in it we learn that it is the hero of the book—the chevalier himself—who shoots Nelson,’ Sicre said.
   Nelson led the English fleet in its victory over the French and Spanish off the cape of Gibraltar in 1805, but died on board his flagship when he was hit by a bullet from an unknown French sniper.

The euro rallied against the dollar on Friday, having slipped in response to remarks by Italian Social Affairs Minister Robert Maroni that Italy should consider re-introducing temporarily the lira alongside the single European currency.
   The euro rose to 1.2278 dollars in early European trading, from 1.2270 late on Thursday in New York.
   The dollar stood at 107.94 yen, from 108.27 on Thursday.
   The single European currency earlier dropped to as low as 1.2220 dollars after Maroni’s comments in the Italian newspaper La Repubblica.
   Against a background of strains in the eurozone, all eyes were on the latest non-farm payrolls in the United States, with economists expecting the data to confirm a softening in the world’s biggest economy.
   Analysts have pencilled in 193,000 new jobs created in May compared with 274,000 in April.
   The US payroll report could however come in worse than expected, following a slide in the employment component of the ISM manufacturing survey released earlier this week and a surge in initial weekly jobless claims Thursday.
   “The sharp drop in the employment component of the ISM manufacturing survey has justifiably fuelled fears that the rise in May US non-farm payrolls today could fall short of expectations,” Calyon analyst Kristjan Kasikov said.
   The euro had earlier fallen strongly against the dollar after Maroni, who is a member of the Northern League party, told La Repubblica:
   “Would it not be better to return temporarily to a system of double circulation.”
   Calling for a referendum to be held on this question, he said: “In Europe there is a virtuous example in Britain which is growing and developing by holding on to its own currency.”
   The Northern League is anti-European, and Maroni said that the euro had been a setback for economic growth.
   The euro has fallen sharply since France and The Netherlands rejected the European Constitution this week.
   Italy is meanwhile in the midst of a mild recession. It entered the euro zone at an exchange rate widely considered to have been low, following devaluations in the preceding years.

Sharp Electronics of Japan said Friday it will begin the summer to sell the world’s biggest liquid crystal display (LCD) television measuring 65 inches (165 centimeters) diagonally.
   The Aquos high-definition television will cost 1.68 million (15,500 dollars) with only 300 units to be initially produced each month, Sharp said.
   The giant TV enters a market for large high-definition televisions in which LCD models have been absent.
   Japan’s Matsushita Electric Industrial, the maker of the Panasonic brand, in October began selling its own 65-inch high-definition television using plasma rather than LCD display.
   Sharp’s South Korean rival Samsung Electronics in March unveiled the world’s largest LCD panel at 82 inches (208 centimeters), but the Sharp television would be the largest LCD television on the market.
   Previously, few in the industry imagined an LCD television of more than 37 inches, as pixels can be of poor quality if the screen is stretched too far, but Sharp said it had developed technology to prevent such distortion.
   Sharp said in a statement the giant TV will provide “life-like, high-definition imagines on an impressively large screen.”
   The Aquos goes on sale in Japan from August and elsewhere by the end of the year.

Apple to settle iPod battery claims
Apple Computer Inc. has agreed to extend warranties and issue credits to consumers who had battery problems with older versions of the iPod digital music player under a proposed class-action settlement, a plaintiff’s lawyer said on Thursday. The settlement potentially covers an estimated 2 million consumers who bought a first, second, or third generation iPod on or before May 31, 2004, said Eric Gibbs, the lead lawyer in the lawsuit. Consumers entitled to make a claim include anyone whose iPod played 50 percent or less than advertised or whose batteries failed over time, Gibbs said. The majority of the class are consumers who bought third generation iPods sold from April 2003 through July 2004 that came with a one-year warranty and were represented to play for 8 hours on a single charge, he said.
— Reuters

Bay Phones offers connections
in Ctg next week
Bay Phones, a private land phone operator, is going to offer its subscribers in Chittagong commercial connections at lesser price than that of Bangladesh Telegraph and Telephone Board other operators from next week. The Bay phones subscribers could make calls to other land phones and mobile phone operators ensuring interconnectivity. MA Hashem, chairman and chief executive officer of Bay Phone, Thursday told BDNEWS that submission of applications has already been commenced and in this phase they would distribute some 100,000 connections in Chittagong city and its adjacent upazilas. Of its two types of connections, wireless types connection fee is Tk 12,000 and cable type Tk 9,000, the chief executive officer said adding that the call rates would also be less than that of BTTB and other operators. The main features of the Bay Phone would confirmation of connection within 24 hours after submitting application and round the clock customer service at free of cost. The customers will enjoy ISD, NWD and local connection facilities through dealerships at every ward in
Chittagong.
— BDNEWS

Japan to allow new comers in cellphone mkt
Japanese regulators said Friday they would allow new comers in the mobile phone market for the first time in 12 years to prompt more competition in the market which are dominated by three top providers. The Ministry of Internal Affairs and Communications issued a draft regulation that said the government would give priority to new entrants when allocating frequency spectrum for third-generation services later this year. “The decision was made after considering the balance between the efficient use of frequencies, which are a limited resource, and the promotion of market competition,” Kohei Yoshida, an official at the ministry, told AFP. Softbank Corp, which runs Japan’s Yahoo broadband Internet service, has demanded that the government opens up the mobile phone market. In October the company filed a lawsuit to stop the government from allocating existing carriers access to the high-speed 800 mhz band, but dropped the suit in March.
— AFP

EBRD invests $ 7.25m in Lithuania bank
The European Bank for Reconstruction and Development (EBRD) is to acquire a 16.1-percent stake in Lithuania’s sixth-biggest bank, Siauliu Bankas, the Lithuanian bank said Friday. Under the terms of an agreement signed Friday, the EBRD will pay 20.4 million litas (5.9 million euros, 7.25 million dollars) to obtain 12 million shares of Siauliu Bankas. With assests of 204 million euros, Siauliu Bankas is the sixth-biggest bank in the Baltic state. It has 43 branches in 25 Lithuanian cities and has a 15-percent market share in servicing small and medium-size enterprises in the Baltic country. Net profit of the bank in 2004 surged by 56.8 percent compared to the previous year, to 6.5 million litas.
— AFP

Novartis in licensing deal on Hep C drug
Novartis has signed an exclusive licensing agreement with Anadys Pharmaceuticals for a hepatitis drug and may pay Anadys up to $570 million, the firms said on Thursday. Novartis obtains the right to develop, manufacture and commercialise the drug called ANA975 — currently in Phase I trials — to treat chronic hepatitis C, as well as to develop it for other indications, including hepatitis B infection. Anadys said it would receive initial license payment of $20 million from Novartis. The San Diego-based biotechnology company said it was also eligible to receive up to $550 million in milestone payments.
— Reuters

Baltic retailer VP Market enters Bulgaria
Lithuanian-based VP Market, the operator of the largest retail chain in the Baltic countries and which recently opened its first stores in Romania, announced on Friday the start of operations in Bulgaria. “We have opened our first store in Sofia and plan to open a few more this year,” Viktorija Jakubauskaite, spokesperson for VP Market, told AFP. VP Market opened its first store in Romania in March and according to Jakubauskaite currently operates eight outlets there. Founded in Lithuania in 1992, VP Market reported sales, including VAT, of 1.142 billion litas (330 million euros, 405 million dollars) in the first quarter of 2005, an increase of 21 percent from the equivalent figure last year. The company’s sales last year grew by 15.9 percent to 4.16 million litas. VP Market currently operates more than 300 stores in Lithuania, Latvia, Estonia and Romania and plans to open about 100 new outlets this year with total investments of about 345.3 million litas.
— AFP