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Malaysia agreed in principle to give duty-free access of 19 categories of Bangladeshi products and relocate its labour-intensive industries to Bangladesh as part of a package of measures adopted for bolstering bilateral cooperation, officials said.
   At the third Joint Commission Meeting (JCM) that ended here Tuesday, Kuala Lumpur also agreed to recruit manpower from Bangladesh based on requirement in Malaysia.
   Bangladesh and Malaysia, at the end of two-day talks, also decided to enhance cooperation in capacity building, agriculture, education, healthcare, tourism and IT development.
   The foreign minister, Morshed Khan, described his Malaysian counterpart’s visit to Dhaka on the occasion of the commission meeting as a ‘very significant development’ in bilateral ties.
   The Malaysian foreign minister, Syed Hamid bin Syed Zaafar Albar and M Morshed Khan led their respective countries to the JCM, held after 11 years, and signed an agreed minutes of the meeting.
   ‘I find the meeting very productive… we have agreed to cooperate in capacity building to develop human capital, tourism, bio-tech and IT development,’ Zafar Albar told a joint press conference at the Hotel Sonargaon at the end of the meet.
   Malaysia, he said, already has investment in telecommunications sector and is interested to make investment in power and energy sectors also in Bangladesh.
   Asked about reduction of a yawning trade gap, Albar said they agreed to enhance the volume of trade to reduce the trade imbalance. But he noted that although trade balance is in favour of his country, investment is in favour of Bangladesh.
   The Malaysian minister, however, said, ‘We should not only look at the trade imbalance. We should also look at the investment side, which is also equally important for creating job and prosperity.’
   On recruitment of manpower, Albar praised Bangladeshi workforce contributing to its economic growth and development, saying that the recruitment of workforce would depend on the need of the private sector.
   Over 54,000 Bangladeshi workers are employed in different sectors in Malaysia, he said, adding, ‘We’ve agreed that we will continue discussion based on our requirement.’
   The Malaysian foreign minister said, ‘We don’t stop any country from becoming the source country… If there is requirement, of course, Bangladesh can negotiate with relevant authorities—the Labour Ministry, the Home Ministry—to send its workforce.’
   To another question, Albar said the MoU signed by Bangladesh and Malaysia in 2003 on manpower recruitment is still valid, but noted that since Malaysia has gone for hi-tech industries, the requirement of workforce would depend on the need of the private industries.
   Speaking on the occasion, Morshed Khan expressed his satisfaction at the talks. He said, ‘We’ve discussed all issues and how to cooperate in agriculture, education, bio-tech, health, tourism and other areas so we can harness the benefit and have a win-win situation.’
   ERD secretary Ismail Zabihullah said that the Malaysian side agreed in principle to give either duty-free entry or concessional market access of 19 categories of Bangladeshi export products.
   Meeting sources said Bangladesh would prepare a list of 26,000 Bangladeshi workpeople for sending to Malaysia by studying the requirements there.

Trade leaders of Bangladesh and China have stressed that a direct road link via Myanmar would give a boost to the bilateral business and give the smaller partner a wider and easier access to the huge market of the Asian giant.
   The road would also facilitate China’s eastern province to use the Chittagong Port as its gateway to external trade, they felt.
   The suggestions were made at two separate meetings between a high-level Chinese delegation and leaders of FBCCI and DCCI in Dhaka on Tuesday.
   ‘A transport protocol should be signed among the countries immediately for facilitating the construction of the road and smoothening cross-country trades,’ said Abdul Awal Mintoo, president of the Federation of Bangladesh Chambers of Commerce and Industry.
   The proposed 900-km road will connect Chittagong with Kunming of China via Myanmar and would take hardly a couple of years to build if all sides agree and sign a protocol, Mintoo said, while exchanging views with the members of the China delegation.
   ‘Through such a road-link, you can also use the Chittagong seaport and that can make your exports much faster,’ the Dhaka chamber, president Sayeeful Islam, told the delegation at a separate meeting.
   Having proximity with Myanmar and India’s seven sisters, Yunnan can easily expand its market to Bangladesh, he said adding that opening of air-link between Dhaka and Beijing via Kunming would usher in a new era in bilateral cooperation.
   He sought support from China to increase Bangladesh’s trade with Myanmar, China’s next-door neighbour linking South and Southeast Asian countries.
   The Chinese delegation leader, Wang Chao, echoed the views of the local business leaders and said that a direct road link would boost two-way trade and also help Bangladesh reduce trade gap significantly.
   Earlier in May, China approved zero duty on 84 Bangladeshi products and halved duty on 222 other products. Bangladesh and Chinese private sectors also signed memorandum of understanding for cooperation in apparel sector.
   Wang Chao, who is the first vice governor of Dehong prefecture of Yunnan province, advised the Bangladesh’s business community to tap the potentials of the vast Chinese market availing of the relaxed duty.
   Bangladesh’s exports to China declined to $45.52 million in 2003-04 from $48.51 million in 1997-98 while import from China increased to $1197.68 million from $592 million.
   During July-December period of the current fiscal Bangladesh imported $817 million worth of goods against a meager export of $28 million.
   ‘It is necessary to reduce the increasing trade imbalance for a healthy and long-term growth of trade cooperation,’ the Dhaka chamber chief said and underlined the need for duty-free and quota-free market access for all Bangladeshi products to the Chinese market.
   Sayeeful also called for more Chinese cooperation and direct investment in the country’s textile and clothing sectors. Both countries could benefit from their comparative advantages, he suggested.
   The Bangladesh’s business leaders demanded that the Chinese government should ease visa formalities to facilitate more exchanges of trade delegations.

The Bangladesh Bank governor, Salehuddin Ahmed, has said that any increase in government borrowing will not crowd out the private sector from the credit market.
   ‘The private sector and the banks will not be under pressure if credit flow to government increases,’ he told the monthly luncheon meeting of the American Chamber of Commerce in Bangladesh at the Sheraton Hotel on Tuesday.
   The managing director of the National Bank, M Aminuzzaman, expressed his apprehension that the private sector would be under pressure as the public borrowing is expected to jump at the end of fiscal year.
   ‘The banking sector doesn’t have enough liquidity to cater to the government demand for cash,’ he said.
   The banker feared that there would be inflationary pressure and so the central bank should take the issue seriously.
   The governor, however, ruled out the apprehension saying, ‘Our present challenge is to stabilise inflation rate and we are closely monitoring the government borrowing.’
   Salehuddin pointed out the credit growth also contributed significantly to the inflationary pressure, apart from the post-flood rehabilitation programme and rises in oil and commodity prices.
   He said it is too early to comment on the ‘impact’ of the ongoing reform process in the central bank.
   On recovery of bad loans, he said, ‘There are several organs of the government involved in the bad debt recovery and the Bangladesh Bank alone can do little.’
   Defending the policy shift towards higher rate regime, the central bank governor said rising interest rate is a global phenomenon now.
   ‘Rise in inflation has cut the banks’ real interest rate and they (banks) are now compelled to go for higher interest rates,’ he added.
   AmCham president Aftab Ul Islam said a large portion of the NCBs’ bad debt can never be recovered.
   ‘Recent analysis indicates that low rate of repayment of the loans extended during the last five years has led to growth of bad debts,’ he said.Among others, Amcham executive director A Gafur was also present in the programme.

General Motors Corp plans to eliminate 25,000 jobs in the United States by 2008 and to close plants as part of a strategy to revive its struggling North American operations.
   Speaking to shareholders at GM’s 96th annual shareholder meeting in Delaware Tuesday morning, Chairman and Chief Executive Rick Wagoner said the capacity and job cuts will generate annual savings of roughly $2.5 billion.
   Wagoner revealed the cutbacks as he laid out a four-step strategy to revive GM’s North American business, the biggest and most troubling part of the world’s largest automaker.
   Wagoner focused on priorities for clarifying the role of each of GM’s eight brands, intensifying efforts to reduce cost and improve quality and continuing to search for ways to reduce skyrocketing health care costs.
   He noted that the company’s current $1,500 per worker health-care expense puts GM at a ‘significant disadvantage versus foreign-based competitors,’ and said GM has conducted ‘intense discussions’ with the unions about how to reduce health-care costs.
   General Motors shares rose 47 cents, or 1.6 per cent, to $30.89 in early trading on the New York Stock Exchange.
   Billionaire investor Kirk Kerkorian’s offer to purchase 28 million GM shares at $31 apiece, boosting his stake to about 9 per cent from 4 per cent, expires later today.
   In the cost-reduction area, Wagoner said it was vital for the company to improve efficiency at its manufacturing plants. He said that plant closings and idlings in recent months have reduced assembly capacity in North America from 6 million in 2002 to 5 million by the end of this year.
   It was not immediately known which GM plants would be closed.
   ‘Let me say up front that our absolute top priority is to get our largest business unit back to profitability as soon as possible,’ Wagoner said.

Banking giants HSBC and Citibank are interested in buying South Korea’s top credit card firm, which is valued at $4.2 billion, but have yet to make a formal approach, a senior official at LG Card’s main creditor said.
   State-run Korea Development Bank (KDB) planned to talk to potential bidders for LG Card Co. Ltd. from the middle of the second half of this year, KDB Executive Director Laah Chong Gyu told Reuters by telephone on Tuesday.
   ‘Citibank has been showing interest for a while,’ he said. ‘HSBC is interested too. They have both told people in the market about their interest in LG Card but have not yet contacted us with details.’
   A spokesman for HSBC declined to comment, while a Citibank spokesman in Seoul said no information was available on the issue.
   LG Card is majority-owned by local creditors led by KDB after two joint rescue packages by creditors and former parent LG Group. Creditors plan to sell their stakes once LG Card’s operations are fully normalised.
   The sale of LG Card is expected to draw keen interest from local and foreign bidders, with media and analysts also tipping foreign players such as Citigroup and HSBC Holdings Plc. as potential bidders.

Timber traders demanded zero import duty to ensure smooth supply of wood used in commercial and housing purposes.
   The Bangladesh Timber Importers and Exporters Association claimed that imposition of 7.5 per cent duty has reduced the import of timber by 75 per cent in the outgoing fiscal year alone.
   The drastic fall in timber import pushed most of the country’s around three lakh saw mills to the verge of closure, association president Shamsul Alam told a press conference in Dhaka on Tuesday.
   The total duty and tax incidence on timber goes up to 30-35 per cent including local level VAT and other taxes, it said.
   Timber merchants have to pay a three per cent advance income tax, four per cent development surcharge and one per cent pre-shipment inspection charge in addition to VAT and import duty.
   Ninety per cent of the country’s timber demand is met by import, they said.
   The imported timbers are used for making fishing boats, trawlers, body of truck, doors and windows of housing projects in urban areas.
   About one crore people are directly or indirectly involved with the timber industry.
   Association leaders Jahirul Islam and Nesaruddin also spoke at the news briefing.

Rankstel, a private land phone operator, has so far provided over 2,000 connections to subscribers in Sylhet and Chittagong since the start of its journey in April this year.
   The RanksTel subscribers could make calls to other land phones and mobile phone operators ensuring interconnectivity, and enjoy better and quality service than that of the BTTB, an official claimed.
   The operator charges Tk 9,999 for its wireless type pre-paid connection along with phone-set, he said adding that it would launch post-paid service within a couple of days.
   RanksTel charges its post-paid subscribers Tk 1.50 per three minutes pulse for outgoing local call during peak hour and Tk 1 per three minutes during off-peak hour.
   The charge is applicable for both RanksTel to RanksTel and RanksTel to BTTB calls. The company charges Tk 3 per minute and Tk 1.50 per minute for peak hour and off peak hour respectively for outgoing calls within zone in case of RanksTel to RanksTel calls. In case of RanksTel to BTTB calls the charge is Tk 4 and Tk 3 respectively.
   In case of Inter-zone outgoing calls, the charge is Tk 4 and Tk 2.50 during peak hour and off-peak hour respectively for RanksTel to RanksTel. For RanksTel to BTTB the charge is Tk 5 and Tk 4 respectively.
   In case of International calls, the charge is Tk 2+BTTB charge and Tk 1+BTTB charges for RanksTel to any country. For RanksTel to any mobile the charge is Tk 3 per minute during peak hour and Tk 2 per minute during off-peak hour.
   All incoming calls (RanksTel to RanksTel, RanksTel to BTTB, RanksTel to any mobile) are free.
   The main features of the RanksTel are that it ensures confirmation of connection (ISD, NWD, local) within 72 hours after submission of application and prompt customer service.
   With the ISD, NWD and local connection facilities, RanksTel covers different facilities-- caller ID, voice mail, short message service (SMS) through a wireless terminal setting up in houses.
   A Rouf Chowdhury, chief executive officer of RanksTel, told BDNEWS that the company would extend additional facilities considering the client requirements, and users would carry handset from room to room, even can shift from office to home keeping the number same.
   The system also offers high-speed, digital and dedicated connections to its subscribers, he added.
   ‘We have to invest from $100 to $150 for a subscriber,’ Rouf said adding that they have a plan to bring one lakh subscribers under the network in the first phase in 60 upazilas of Sylhet and Chittagong this year.

A rights forum has urged the government to take all necessary measures to ensure rights of garments workers.
   Leaders of the forum Bangladesh National Council of Textile Garments and Leather Workers made the demand at a consultation meeting organised by the council on Monday.
   The meeting was arranged to call for building a national consensus on the future of the RMG industry, workers rights, ILS and corporate social responsibility.
   Referring to the biggest ever Specturm factory collapse in Savar, the BNC leaders urged the government to form a national probe body to investigate the incident that killed over 60 workers.
   They also stressed the need for forming a national committee on occupational health and safety for RMG workers incorporating in it government, trade unions, BGMEA , civil society and ILO represenattives.
   To successfully face the post-MFA challenge, they also demanded that the government should build competitive industrial base backward linkage and sought adequate financial support for the protection of the RMG sector.
   Chaired by trade union leader Abut Basher, president of the council, the meeting was attended, among others, the Brussels based ITGLWF general secretary, Neil Kearney, BGMEA president, Anisul Hque, Head of CSR at Inditex (Spain) J. Chercoles, head of Social Affairs Karstadt-quetle (Germany) Maren Boehm, manager, Global Partnerships GAP, Inc, Lakshmi Bhatia.

Jamuna Bank Ltd. signed a memorandum of understanding with the cellphone operator Banglalink in Dhaka recently, says a press release.
   Under the MoU, subscribers of Banglalink would be able to pay their bills in any of the 19 online branches of Jamuna Bank.
   The managing director of the Jamuna Bank, M Nazrul Islam and the chief executive officer of Banglalink, Lars P Reichelt, signed the MoU on behalf of their respective organisations.
   Arifur Rahman, chairman of the bank and Ezzeldin M.Heikal, chief financial officer, of Banglalink along with senior executives from both the organizations were also present in the signing ceremony.

Nazma Binte Alamgir, manager (public relations) of the Bangladesh Export Processing Zones Authority, has been named best public relations officer, says a press release.
   Nattyo Shova, a soclo-cultural organisation, gave the honour to Nazma for her innovative publicity work towards investment promotion of the EPZs.
   The law, justice an parliamentary affairs minister, Barrister Moudud Ahmed, gave away the Nattaya Shova award to Nazma at a function recently.
   Mentionably, Nazma was named 'Women of the Year 2000' by the American Biographical Institute of the USA.

The World Fish Center signed a memorandum of understanding with the Bangladesh Shrimp Foundation in Dhaka on Sunday, says a press release.
   Under the agreement, the WFC provide support to the national plans and programmes for the country’s aquaculture development.
   Rokeya Sultana, joint secretary, Ministry of Fisheries and Livestock, Abdul Karim, secretary of the ministry, Syed Mahmudul Huq, chairman of the shrimp foundation, Dr MA Mazid, director general of the Bangladesh Fisheries Research Institute, Dr Mahfuz Ahmed, regional portfolio director of the WFC and Nasiruddin Ahmed, director general of the Department of Fisheries were present in the signing ceremony.

Ranks Telecom Ltd., a member of Rangs Group, signed a distributorship agreement with MK Communication in Dhaka recently, says a press release.
   Under this agreement, MK Communication has been authorised to distribute RanksTel products.
   A Rouf Chowdhury, president and chief executive officer of RanksTel and Motiur Rahman, chief executive officer of MK Communication, signed the deal on behalf of their respective sides.
   Zakaria Swapan, chief operating officer, Asrafuddin Ahmed, finance director, Anwar Hossain, director, Mutasim Billah general manager (engineering), AKM Mahiuddin, manager (core marketing) and Karim lqbal Bhuiyan, manager (sales and dealers’ management) of RanksTel and Arif A Khan general manager, Syed Mustafa Zamal, financial adviser and Sharif Md Rayhan Babu, assistant manager of MK Communication, were present in the signing ceremony.

Stubborn inventory gluts, dormant capital spending and uncertainty over currency reform in China are casting a shadow over prospects for a recovery in Japan's slowing exports to China, and thus its economic growth prospects.
   Although Japan's surprisingly strong growth in the first quarter was led primarily by robust domestic demand, analysts say the strength at home owes much to earnings from an explosive rise in China-bound exports over the last several years.
   Exports to China account for 13 per cent of Japan's global exports, second only to 22 per cent for the United States, and analysts say a recovery in them is crucial to sustaining gains in corporate earnings, jobs and domestic spending.
   China's economy is growing steadily at a brisk pace, with gross domestic product for the first quarter up 9.4 per cent from a year earlier. Fixed asset investment in April was up 26.5 per cent, accelerating again after a brief slowdown. But Japanese exports to China are stagnating. After growing more than 20 per cent last year, they rose only 5.8 per cent in March and 4.2 per cent in April-well below growth for shipments to the rest of Asia, Europe or the United States.
   Analysts cite three main reasons: inventory adjustment in certain sectors resulting from Beijing's economic tightening steps; slowing capital spending among manufacturers; and uncertainty stemming from a widely expected revaluation of the yuan currency.

The state minister for power, Iqbal Hassan Mahmood, Tuesday said the power situation would never be improved unless unless the mindset of the people changed.
   Power is a commodity and the culture concept of the people that 'anything of the government is for free' has to be changed, he said.
   'Power situation cannot be improved without change in the mindset of the people and creating of mass awareness… No government can improve the situation, if everybody does not participate.'
   The state minister was speaking at a seminar on 'energy efficient city', jointly organised by the Sustainable Rural Energy project of the LGED and the power cell of the Power Division.
   The Sustainable Environment Management Programme (SEMP) and UNDP provided support for the seminar held on the occasion of the three-day programme of the 'World Environment Day' at the Bangladesh China Friendship Conference Centre.
   Professor M Rezwan Khan presented the keynote paper at the seminar, chaired by LGED chief engineer Mohammad Shahidul Hassan.
   President of the Bangladesh Solar Energy Society Muhtashan Hussain, director of BUET's Institute of Appropriate Technology Nurul Islam, power cell director general BD Rahmatullah, SEMP programme coordinator Babar Kabir and director of Rahimafrooz Battery Limited Munawar M Momin were the main discussants.
   The state minister in his deliberation emphasised on raising awareness regarding the use of electricity for having an 'energy efficient city' and suggested the multinationals to come forward in this regard.
   Using energy-saving CFL bulbs in the shops of the capital can save nearly 160 megawatt of electricity in peak hours everyday, he said.

Federal Reserve Chairman Alan Greenspan said Monday he does not have a good explanation for why long-term interest rates have been falling at a time when he and his Fed colleagues have been raising short-term rates.
   Greenspan called the pronounced decline in long-term interest rates over the past year at the same time the Fed was boosting short-term rates ‘clearly without recent precedent.’
   Speaking by satellite to a monetary conference in China, Greenspan rejected the suggestion that US rates have been held down by a massive flow of foreign investment from such countries as China. He said a recent Fed study found that foreign purchases of US Treasury notes have had only a ‘modest’ impact on US interest rates.
   Greenspan participated on a panel with key central bank officials from China, Japan and Europe.
   He repeated comments he has made in the past that it would be good for China to stop pegging its currency, the yuan, tightly to the US dollar, a practice critics say has undervalued the Chinese currency and given the country a tremendous trade advantage over US companies.
   Greenspan, however, said he doubted the change would have much impact on America’s record $162 billion trade deficit with China. But he said the change would boost the Chinese economy by making it more flexible.
   ‘In enhancing global growth, it is important that the structure of the Chinese economy be as flexible and integrated into the world economy as much as possible,’ Greenspan said.

Pakistan's new budget will add to the misery of a country already hit by poverty and inflation, with only the military and big businesses standing to gain, analysts and opposition parties said Tuesday.
   Critics hit out at a one-sixth increase in defence spending by the government of military ruler President Pervez Musharraf and dismissed a boost of more than a third in funds for urgent development work as 'peanuts'.
   Minister of state for finance Omar Ayub said while unveiling the 1.09-trillion-rupee (18.2-billion-dollar) budget in parliament late on Monday that Pakistan had 'achieved an economic miracle'.
   He pointed to an 8.4 per cent rise in Pakistan's GDP in 2004-5, the highest in 20 years, while growth for the coming year was expected to continue.
   Meanwhile public sector development spending will expand by 34.7 per cent to 272 billion rupees, which the government vowed to use on a web of dams, roads and other infrastructure.
   But others were less enthusiastic, particularly at the rise in the defence budget from from 194 billion rupees in 2004-5 to 223 billion in the coming year.
   'It amounts to robbing the poor of Pakistan to enrich the generals rather than strengthening the defense of the country,' said Farhatullah Babar, spokesman for the Pakistan People's Party of former premier Benazir Bhutto.
   'I can simply define the budget as good for the rich and bad for the poor,' analyst Qaiser Bengali, former head of Pakistan's Social Development and Policy Institute, told AFP.
   Chief of the country's Research Institute of Islamic Banking and Finance, Shahid Hasan Siddiqui, added: 'It is more business-friendly but not pro-people at all.'
   Former army general and military analyst Talat Masood saw no reason to increase the defence budget when tensions with rival India had receded.
   The peace process between the nuclear armed South Asian neighbours, described recently by their leaders as 'irreversible', began in January 2004 after the two countries came to the brink of a fourth war in 2002.
   India, however, increased its military budget by 7.8 per cent to 19 billion dollars in February.
   'We can create jobs only by investing more on industrialisation and infrastructure and we need to revisit our expenditures on defence, especially when tension is melting with India,' he said.
   Meanwhile critics also dismissed the poverty reduction plans as ineffective because of institutional weakness, corruption and other factors.
   Analyst Siddiqui conceded that the government's earmarked development funds were substantial but said previous efforts to create vital jobs had flopped.
   Pakistan's unemployment rate runs at between 8.5 and 9 per cent.
   'The government has allocated a considerable sum for development and poverty elevation but its utilisation always carries a big question mark as 60 to 80 per cent of the allocation remains unutilised,' he said.
   He also rejected the government's announcement that it would raise the wages of civil servants by up to 30 per cent, saying any benefit would be wiped out by an increase in sales tax.
   However Pakistan's stock market welcomed the budget, particularly as it did not impose a feared rise in share trading tax.
   'The overall budget would cast neutral to positive impacts on the capital market,' said Mohammad Sohail, director of Janhangir Siddiqui Capital Markets.

US business groups and a top Republican senator have written to new World Bank president Paul Wolfowitz asking him to suspend a proposal they say would alter the bidding system on projects funded by the lender.
   World Bank projects in developing countries generate billions of dollars a year in business for private companies, which bid on contracts under bank rules.
   But according to 11 business organisations that wrote to Wolfowitz, a draft paper now open for public comment proposes changes that would let countries that receive World Bank loans use their own bidding systems to award contracts.
   The proposal should be put on hold for further discussion, the groups said.
   The May 25 letter, which also went to senior Bush administration officials, was signed by the heads of the National Foreign Trade Council, US Council for International Business, Computing Technology Industry Association, US Chamber of Commerce, the National Electrical Manufacturers Association and the American Council of Engineering Companies.
   Eliminating an overarching bidding structure would sow confusion, reduce competition, raise costs and undermine the bank's anti-corruption efforts, the letter argues.
   'The proposal would decentralise the procurement process for World Bank-funded contracts and would be inconsistent with World Bank goals of promoting fair and transparent procurement systems in the developing world,' the groups wrote.
   For its part, the bank argues that allowing countries to set their bidding systems would encourage them to set high standards for all contracts, not just for bank projects.
   Diane Willkens, president and chief executive of the Development Finance group of corporate and government consultants, said the changes would deal a setback to World Bank efforts to promote best bidding practices.
   She also argued it could lead to misuse of bank money.
   Republican Sen Richard Lugar of Indiana, chairman of the Committee on Foreign Relations, raised similar issues in a separate letter to Wolfowitz, the former Pentagon No. 2 who is now in his second week as World Bank chief.
   'A number of businesses and nongovernmental organisations have contacted Senate Foreign Relations Committee staff, arguing that the proposal fails the important measures of fiduciary responsibility, transparency and capacity building,' Lugar wrote.
   Lugar recently introduced a bill to encourage multilateral banks to do more to fight corruption.
   In his letter, he warned a shift to country-dictated bidding rules could lead to uneven procurement systems and a lack of 'meaningful central oversight'.
   The bank said it would not support corrupt or high-risk government bidding systems and any procurement rules would have to meet World Bank standards.
   'The amount we finance is very small compared with the procurement that these countries carry out during the year,' said Armando Araujo, director the bank's procurement policy and services group.
   'If we keep only insisting on good procurement on what we are financing, we are not increasing a country's capacity and not creating really a good system that would create opportunities for the business communities around the world.'
   Araujo said the proposal set out a methodology for quality and performance of national bidding systems.
   'We are not changing the guidelines and not downgrading our standards,' Araujo said.
   'What we want is to have a clear transparent methodology to assess the quality and performance of a procurement system and if it is equivalent to that of the World Bank, then we will accept them to use the system. If not, we will say so.'

A US commitment to providing $674 million for famine relief in Africa may take some of the sting out of President Bush's opposition to a proposal by British Prime Minister Tony Blair to spend even more money.
   However, the other issue topping Blair foreign policy this year - fighting global warming - may further strain his relationship with Bush. Blair has made the issues the twin focus of Britain's yearlong chairmanship of the G-8 group of wealthy nations, yet Bush has rejected many of his close ally's ideas on Africa and the environment.
   Bush is welcoming Blair to Washington on Tuesday, their first meeting since Blair won a third term in office and his Labour Party suffered heavy losses in Parliament, largely because of voters' unhappiness about his support for the Iraq war.
   The joint initiative for famine relief that they were announcing at the White House comes after Blair proposed doubling aid to Africa. The amount of Britain's contribution to the new program was not disclosed, but it was said to be less than that of the United States.
   Blair is likely to be disappointed by the US commitment. He has been pushing a broad, long-term - and far more costly - effort to help Africa's economy get on its feet, not just emergency food aid. He also wants G8 countries to commit new money for Africa rather than reallocating funds already earmarked for foreign assistance.
   The US money will be drawn from funds already approved for an Agriculture Department food aid account and other funds available in a recent supplemental appropriation.
   Besides focusing on the food needs of people vulnerable to famine in Ethiopia and Eritrea, the joint initiative will address humanitarian needs in other countries in Africa, a senior White House official said.
   Blair, the host of this year's summit of the major eight industrialized democracies, hopes to use the meeting in early July in Gleneagles, Scotland, to raise an extra $50 billion a year by selling bonds on the world's capital markets.
   'It doesn't fit our budgetary process,' Bush said last week. The Bush administration says the mechanism would conflict with US budget laws by binding future governments to providing money.
   Bush and Blair, in a joint news conference Tuesday afternoon, were calling on other countries to increase their commitment to address humanitarian emergencies in Africa, the White House official said, speaking on condition of anonymity because the announcement has not been formally made. In addition to the $674 million, the United States has earmarked $1.4 billion requested by the United Nations to address emergency needs.
   The prime minister's visit is part of a blitz of trips he's taking to lobby foreign leaders on Africa and global warming ahead of the G-8 summit. He recently saw Italian Premier Silvio Berlusconi in Rome, and in the coming weeks he will visit Russian President Vladimir Putin, French President Jacques Chirac and German Chancellor Gerhard Schroeder.
   American support is crucial to Blair, but he may face an uphill fight to win it on global warming. The president opposes the Kyoto Protocol, and his administration questions scientists' views that man-made pollutants are causing temperatures to rise.
   On Monday, Blair's official spokesman said the prime minister wasn't looking for a major breakthrough in Washington.
   'This visit is part of the preparation for Gleneagles, not Gleneagles itself,' the spokesman said. 'So we are not expecting ... to see the final US position tomorrow. That will come at Gleneagles.'

Chinese offshore oil producer CNOOC Ltd said on Tuesday it was still weighing a bid for Unocal , possibly spoiling oil major Chevron's deal to buy the US producer for $16 billion.
   Chevron won a race against several oil firms, including state-run CNOOC, with an April agreement to buy smaller Californian rival Unocal in a cash and stock deal. The transaction is pending regulatory approval and carries a $500 million break-up fee, meaning that any new acquirer would have to pay Chevron $500 million.
   CNOOC said in a statement to the Hong Kong Stock Exchange that it was 'continuing to examine its options with respect to Unocal. These options include a possible offer by the company for Unocal, but no decision has been made in this respect.'
   'No assurances can be made that the company will ultimately make an offer for Unocal,' it added.
   It was the first time CNOOC made public its intention to buy Unocal since Reuters reported in January that it was considering a large overseas buy, possibly Unocal.
   The announcement was in response to a Bloomberg report on Monday that 'CNOOC is not considering an offer for Unocal,' CNOOC said.
   Sources close to the Chinese oil firm and analysts have said CNOOC was unlikely to trump Chevron's offer because of the $500 million break-up fee.
   A person close to CNOOC told Reuters on Tuesday that the Chinese company was monitoring the situation and had hired investment bank Rothschild for independent review on Unocal, but it remained highly unlikely for CNOOC to make a counter-bid.
   'It is still ... very hard for CNOOC or any non-American company to take on Chevron in its own backyard,' the source said. 'The probabilities are still stacked against CNOOC.'
   CNOOC canceled its offer for Unocal earlier this year because the original plan, backed by Chairman Fu Chengyu, had failed to win the support of the Chinese firm's board.
   CNOOC is interested in acquiring Unocal because its oil and natural gas assets in Asia fits CNOOC's aspiration to become a major regional liquefied natural gas (LNG) player. It would have to sell Unocal's unwanted US assets.

Citigroup said it lost computer tapes containing personal banking data on 3.9 million customers, the latest in a series of high-profile breaches of personal information.
   The biggest US banking firm said its CitiFinancial unit has begun mailing letters to customers to notify them about the breach, and has notified law enforcement agencies.
   The data was on computer tapes that were lost by UPS while in transit to a credit bureau, the Citigroup statement said.
   'The tapes contained information about CitiFinancial branch network customers in the United States as well as customers with closed accounts from CitiFinancial Retail Services,' the statement said.
   'CitiFinancial said it had no reason to believe that this information has been used inappropriately, nor has it received any reports of unauthorized activity.'
   'We deeply regret this incident, which occurred in spite of the enhanced security procedures we require of our couriers,' said Kevin Kessinger, executive vice president of Citigroup's Global Consumer Group.
   'There is little risk of the accounts being compromised .... We are making every effort to ensure that our customers are aware of what we are doing and what we suggest they do to protect their identity. We are committed to ensuring that our customers have the support they need to monitor their credit and know how to respond should they identify any problems.'
   The loss of customer data has taken on new significance because of the possibility the data can e used for identity theft or other fraud.
   Last month, police said arrests had been made in the theft of data of more than 700,000 account holders held in four major US banks.
   That case involved customer records from Bank of America, the second-largest US bank in terms of assets, Wachovia Corp, Commerce Bancorp and PNC Financial Services Group Inc.

French president Jacques Chirac wants emergency measures to resolve the dispute with China over textiles imports, a spokesman said Monday.
   Chirac discussed textiles in a meeting with China's first vice foreign minister Dai Bingguo as part of a regular series of discussions between the two countries.
   'The president reiterated that the strong increase in Chinese textiles was creating serious social and economic difficulties for France and Europe,' Chirac's spokesman Jerome Bonnafont said after the meeting.
   'And in that regard, he underlined that emergency measures should be taken within the framework of the World Trade 0rganisation (WTO), as part of a negotiated solution,' he added.

International Monetary Fund chief Rodrigo Rato Monday announced a review of the lender's monitoring of global financial sectors and private capital flows.
   The review panel will be led by US Public Company Accounting Oversight Board head William McDonough and will last six months, Rato said in a statement.
   He said the panel of government and private-sector economists would examine how the IMF could improve its scrutiny of regulations and the environment in which financial institutions and private capital markets operate.
   'During the last 15 years, the increasing importance of private capital flows and of a stable and functioning financial sector have led to greater emphasis on these factors in the fund's work,' he said.

Manchester United has announced the appointment of Malcolm Glazer's sons Joel, Avram and Bryan as new non-executive directors of the club.
   The announcement came as chairman Sir Roy Gardner said that he stood down from his post on 6 June.
   Non-executive directors Ian Much and Jim O'Neill have also both resigned.
   Mr Glazer has won almost complete control of the club shares as part of his controversial £790m takeover of the
   club, much to the anger of supporters.
   At the end of the May, the board recommended that shareholders accept the £3 a share being offered by Malcolm Glazer for the remaining stakeholding he does not own.

Pakistan’s stock market is likely to rise on the government’s budget for the coming fiscal year but dealers said the delay in privatising the country’s largest telecom firm PTCL could dampen sentiment.
   The budget announced Monday consisted of a package of higher development spending and tax cuts aimed at boosting investment and growth, particularly in the key textiles sector.
   The government gave incentives to investors including a rebate of 1 per cent on the tax firms must pay when listing. It also set exemptions from tax on capital gains from investments in agriculture-related sectors.
   ‘It’s a positive growth-orientated budget and contained nothing negative for the stock market,’ said Arif Habib, former chairman Karachi Stock Exchange. ‘I think the market will respond positively to these new incentives.’
   The government also announced an increase in the tax-free allowance on profits from stock investment to 150,000 rupees from 100,000 rupees. It raised exemptions on withholding tax on fixed- income Term Finance Certificates of up to 250,000 rupees to attract retail investors.
   There was no reference to any increase in the Capital Value Tax on share transactions which some investors had feared in the past few sessions.
   Faisal Potrik, head of research at First Capital Equities, said the main Karachi stock index could rise ‘a healthy 2 to 3 per cent’ on Tuesday in response to the budget incentives.
   However, some analysts said the budget had veered slightly from the path of the prudent reforms begun after President Pervez Musharraf took power in a bloodless 1999 coup, by targeting a 3.8 per cent fiscal deficit.
   Muhammad Yasin, CEO at Capital One Equities, said the government had addressed a key concern of investors by not increasing the Capital Value Tax.
   ‘It seems that the market will open on a very positive note tomorrow,’ he said. ‘The only hitch is with regards to PTCL.
   However, sill it would be no surprise if we see a very sharp rise in a number of blue-chips.’
   On Monday, Pakistan’s main stock index closed 1.5 per cent lower after the government’s weekend announcement of a delay in the privatisation of Pakistan Telecommunication PTCA.KA .
   Pakistan’s Privatisation Commission said it had postponed the sale of a 26 per cent management stake in PTCL due to have taken place on June 10 after pressure from employees concerned about jobs. But the commission said it would go ahead before the end of the month.
   ‘Had this budget came in under normal circumstances, the market would have seen big buying sprees,’ said Salman Ahmad, head of sales al Al Maal Securities. ‘But because of the PTCL crisis, we could see some pressure.’
   Around 8,000 of PTCL’s 65,000 workers went on strike last month, worried that the privatisation would bring job losses.
   About 20,000 PTCL workers are union members. The partial strike slowed repair and maintenance of some of PTCL’s more than 5 million fixed lines.

Customer course begins in city
A three-day long customer service course for airline personnel began at the Bangladesh Airline Training Centre Tuesday. Twenty-five participants from Biman Bangladesh Airlines and Malaysian Airlines are taking part in the course being conducted by John O’Connell, an IATA resource person from London. The managing director of Biman Bangladesh, M Mahmoodur Rahman inaugurated the programme, says a press release.

Sanofi-Aventis executive due in
city today
Hanspeter Spek, executive vice-president of pharmaceutical operations of Sanofi-Aventis, the third largest pharmaceutical company in the world and the number one in Europe, is expected to arrive in Dhaka on a two-day visit. He is accompanied by Gilles Lhernould, president, management board of industrial affairs, Antoine Ortoli, senior vice-president of intercontinental, Robert Sebbag, vice-president, solidarity mission on access to medicine, Jean-Mark Georges, vice-president, pharmaceutical manufacturing intercontinental, Michel Lienard, vice-president, industrial affairs, Asia-Pacific and India, and Jean-Louis Grunwald, vice-president, Asia. The Sanofi-Aventis Group in Bangladesh is comprised of Aventis Limited, Fisons (Bangladesh) Limited and Hoechst Marion Roussel Limited, says a press release.

DSE finishes down
All shares price indices on Dhaka Stock Exchange closed lower marginally Tuesday with gainers outnumbering the losers. The DSE all share price index shed by 0.40 points or 0.03 per cent to close at 1262.18 points from 1262.58 points on Monday, the previous trading day. DSE General Index declined 0.01 points or 0.01 per cent to close at 1635.10 points from 1635.11 points on Monday. The DSE-20 index is decreased by 3.99 points or 0.22 per cent to close at 1791.05 points from 1795.05 points on the previous trading day. A total of 164 issues traded Tuesday. Of them, 81 gained, 63 declined and 20 remained unchanged. Some 3.44 million shares and debentures worth Tk 169.06 million changed hands Tuesday against 4.77 million shares valued at Tk 249.61 million on the previous trading day. Market capitalisation stood at Tk 210.75 billion against Tk 210.81 billion on Monday.
— UNB

CSE closed lower today
Trading at Chittagong Stock Exchange closed lower Tuesday with losers outnumbering the gainers. The CSE all share price index decreased by 10.69 points or 0.33 per cent to close at 3210.66 points from 3221.35 points on Monday. The CSE-30 Index also shed 0.07 per cent to close at 3022.05 points. A total of 55 issues traded Tuesday, 15 gained, 32 declined and eight remained unchanged. Some 796,069 shares and debentures worth Tk 4.20 crore changed hands against 944,547 shares valued at Tk 4.28 crore on the previous trading day.
— UNB

IMF says ECB rate cut needed
The International Monetary Fund said Tuesday the European Central Bank might have to cut key interest rates if the eurozone economy does not recover in the third quarter, but no rate cut is needed yet. Michael Deppler, director of the IMF’s European Department, said eurozone growth was expected to slow from a rate of 2.0 per cent in the first quarter on a 12-month basis to around 1.0 per cent in the second, but this was likely simply to mark a temporary hiatus in the economic recovery. Speaking in a teleconference with journalists, Deppler said the euro’s decline from above 1.30 dollars to around 1.23 dollars currently was ‘helpful’ for eurozone growth but did not fundamentally change the situation of the eurozone economy.
— AFP

Tata raises offer for Egypt fertiliser firm
India’s Tata Chemicals Ltd. has raised its offer for Egyptian Fertilisers Company SAE to $352 a share, valuing SAE at $519 million, the Egyptian stock exchange said in a statement on Monday. The new offer outbids the $350 offer made last week by a consortium including Egypt Kuwait Holding Co. Tata had previously offered $305 a share for the Egyptian company. The stock exchange said Tata subsidiary Homefield International was offering $352 a share for all or at least 88.25 per cent of the Egyptian company, provided the public-sector stake is included. Saudi petrochemical firm SABIC had said last month it would bid for the company, but has given no further details.
— Reuters

Jet Airways hits hurdle over US
flights
Jet Airways Ltd’s plans to fly to the United States have run into hurdles after a US company accused the Indian firm of having links with al Qaeda, officials at the Indian airline said on Monday. Jet said it was contemplating legal action against Jet Airways Inc., a Maryland-based company, for claiming the Indian company had links with the militant network through a Dubai-based, India-born underworld don, Dawood Ibrahim. ‘We are consulting our lawyers in the US and in India to find out what legal actions need to be taken. The allegations are baseless and an attempt to besmirch the reputation of a renowned airline,’ Saroj Datta, Jet’s executive director, told a news conference.
— Reuters

Resale of Ukraine steel giant unlikely
The head of Ukraine’s federal property fund said Tuesday that a renewed auction of the nation’s steel giant, Krivorozhstal, was unlikely to take place within a month, as announced the previous day by the government. ‘Before we can start talking about a repeat auction of the firm, its shares must first be returned to the state property fund,’ Valentina Semenyuk was quoted as saying by the Interfax news agency. Semenyuk said that the shares were unlikely to be returned until Krivorozhstal’s present owners had exhausted all avenues of judicial appeal, following an April court ruling that said last year’s privatization of the steelworks was unlawful.
— AFP