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The equity and entrepreneurship fund (EEF), an open-handed initiative of the government launched four years back to promote agro-based and IT sectors, remained largely underutilised despite huge response from entrepreneurs.
   Fund disbursement has been slow compared to the rate of project approval, though adequate budgetary allocation has been lying with the exchequer.
   Bangladesh Bank, the lone authority for approval, disbursement and monitoring of EEF projects, so far approved about Tk729 crore for 212 projects.
   But only Tk183 crore or 24.1 per cent of the total approved fund has been disbursed so far, according to data provided by the EEF unit of the central bank.
   Evaluation and approval process is said to be lengthy and generally blamed for low use of the fund that pledges to bear 49 per cent cost of an approved project.
   However, central bank officials, who oversee the EEF activities, say they have to see the merit of the project and eligibility of the entrepreneur before recommending for approval. The entire process may take some time, they argue.
   Bangladesh Bank figures show that of the total projects approved so far, 181 have been drawn from agro-based industry including food processing, fisheries and poultry hatchery. The rest 31 are software projects.
   About Tk173 crore was approved for 83 fisheries and hatchery projects, but Tk33 crore was disbursed so far.
   In the software sector, Tk34 crore has been disbursed against the approval of Tk60 crore for 31 projects.
   Due to low disbursement of fund, central bank has also draw lower portion of budget from the government treasury.
   So far, about Tk255.2 crore has been withdrawn against the budget allocation of Tk700 crore in between fiscal year 2001 and 2005.
   ‘We draw the fund from treasury time to time in line with advancement of the projects approval,’ said an official concerned of the central bank.
   In a bid to encourage investment in food processing and agro-based sectors as well as software industry, the government in 2000-01 fiscal year set up the fund with initial allocation of Tk100 crore.
   But the offer got little response in initial years due to lack of idea among the potential investors.
   The government and the central bank then initiated vigorous campaigns involving trade bodies to woo the entrepreneurs to go for agro-based and IT projects and use the fund.
   The fund was later raised gradually and in the current fiscal, the government earmarked Tk200 crore.
   The equity fund, however, has been kept open-handed and the finance minister, M Saifur Rahman, on several occasions in the past expressed the government’s readiness to invest Tk1000 crore or even more for the venture fund.
   ‘The paces of approval and disbursement do not match with the spirit of the EEF,’ says M Akhtar Hossain, a project consultant.
   He referred to the campaigns to popularise EEF among the potential investors in agro-based and software sectors.
   “They are now coming in a big way and you are telling them, ‘no this is enough,” he said, citing some recent steps taken to limit the number and size of project in some sub-categories, including fish hatchery.
   EEF officials said they have to go through a process to evaluate a project and approve it.
   ‘To receive the funds, entrepreneurs have to comply with some requirements that may take some time,’ said a senior official of the central bank.
   An entrepreneur has to deposit 15 per cent of the proposed equity with bank after the approval of the project by Bangladesh Bank.
   ‘The entrepreneur has to issue shares in favour of government, and EEF unit before fund is disbursed,’ he continued.
   For getting EEF support, an entrepreneur has to submit project proposal first to a bank or financial institution with feasibility analysis and return projections.
   ‘The bank primarily reviews the project profile and if satisfied, forwards it to the central bank with recommendations,’ he said.
   The minimum project cost, including net working capital, is set at Tk50 lakh for any project.
   Moreover, entrepreneurs applying for EEF support have to be registered as a private limited company under the Companies Act, 1994.

Swedish telecom equipment giant Ericsson on Wednesday said that it would offer low-cost solutions to operators in Bangladesh to make services affordable to new and growing segments of the population.
   ‘We will offer about a 20 per cent discount to the Bangladeshi operators,’ the Ericsson South East Asia president Kristian Tear said at a news briefing in a hotel in Dhaka.
   Ericsson, which began its operation in Bangladesh in 1997, is the largest end-to-end telecommunications service provider and two leading mobile phone operators — GrameenPhone and AKTel — are the major customers of its products.
   ‘Our aim is to make it possible for operators to rapidly reach more and more users in a profitable way, and our approach makes network solutions fit the most varying market situations,’ said Kristian at the briefing organised to explain the features of telecom solutions provided by the company.
   Mobile phone use has been growing rapidly with the average Bangladeshi subscriber logging around 300 minutes of use per month which is higher than Southeast Asian average, he said.
   He said Bangladesh is an attractive market for mobile services because of its large population of about 140 million, but mobile penetration now stands at around 2.8 per cent.
   ‘The potential of adding new subscribers in Bangladesh is enormous,’ he said.
   It is estimated that the number of mobile subscribers in Bangladesh will reach about 15 million by the end of 2007.
   Ericsson Bangladesh managing director Rafiah Ibrahim and Ericsson South East Asia head of communications Alina Ibarahim were present at the briefing.

Tokyo, Osaka and Kobe have preserved their status as the world’s most expensive cities to live in, while Manila and Bombay are among the cheapest, a global cost of living survey showed Wednesday.
   London saw the biggest rise in cost of living over the past year while the falling US dollar made American cities cheaper, according to the bi-annual Economist Intelligence Unit (EIU) survey of more than 130 cities.
   New York, assigned an index reading of 100 and ranked the 23rd most expensive city in the world, down from 13th a year ago, served as the basis of comparison.
   Tokyo’s stood at a whopping 141 and the Osaka-Kobe zone’s was 136. London, in seventh place, was on 121.
   At the bottom of the list, New Delhi and Karachi were jointly ranked 120th with just 45 on the index, Bombay was ranked 122nd on 44 and Manila was 123rd on 38, just above the cheapest city, Tehran at 32.
   Other Asia-Pacific cities in the top 25 were Hong Kong at 12th place, down from seventh a year ago, followed by Singapore at 19th, down from 17th. Seoul was in 25th place, down from 19th, along with Sydney, up from 27th.
   A basket of goods and services was used to calculate individual indices, with currency strength playing a key role because local prices are converted into US dollars.
   “The position of Tokyo and Osaka as the world’s most expensive cities disguises a much more varied picture in the Asian region,” the EIU said in a press statement.
   “Australia and New Zealand have seen sharp rises in relative cost of living thanks to currency strength — Wellington and Auckland rose the highest number of places,” it added.
   The two New Zealand cities were tied at 39th place on an index reading of 91.
   Traditionally expensive destinations like Hong Kong have seen a fall in the relative cost of living thanks to low inflation and the pegging of the currency to the US dollar, while European cities closed the gap with Tokyo and Osaka.
   Other key Asian cities had widely varied rankings.
   Political rivals Beijing and Taipei were tied for 44th place with an index reading of 87, while Shanghai was ranked 46th — along with Miami, Florida — on 86.
   Jakarta was in 86th place with an index of 68, Ho Chi Minh City at 90th on 66, Hanoi and Kuala Lumpur were tied at 98th on 62, and Bangkok was in 102nd place with 60.

Bangladesh has decided to opt for 10 per cent benchmark level of share in the European market to make best use of the generalised system of preferences offered for apparels.
   The position, agreed Wednesday at a meeting between industries and government, will be forwarded to the European Union before it finalises the changes to the new GSP being effective from January 2006, says a trade official.
   The meeting, presided over by the commerce secretary, Siddiqur Rahman Chowdhury, discussed several options proposed by the Bangladesh Knitwear Manufactures and Exporters Association.
   The EU draft for revised GSP, released in October 2004, set the market share threshold at 12.5 per cent for textile. It means that if a country’s textile export to the EU exceeds 12.5 per cent of its total exports, then the country would not be entitled to GSP facility.
   The provision is, however, subject to review in every three years.
   The knitwear exporters, in their revised opinion sent to the EU administration, earlier suggested that GSP graduation threshold should be in phases— 7.5 per cent, 8.5 per cent and 10 per cent.
   The Bangladesh’s option for 10 per cent threshold is aimed at keeping big players like India out of the new GSP scheme. India’s textile exports to EU account for more than 11 per cent of EU’s total textile imports.
   Textile and clothing exports from Bangladesh are more than three per cent of EU’s total imports under GSP.
   India’s graduation from GSP will give a breathing space for Bangladeshi apparel exporters, said a leading exporter.
   Earlier, EU announced that the new GSP would come into force on April 1, 2005 instead of July 1, 2005 so that tsunami-hit countries, in particular the Maldives, Sri Lanka, Thailand, and Indonesia.
   EU member countries are scheduled to meet on Wednesday to finalise the GSP graduation threshold amid sharp difference of opinion on the issue.
   The new 10-year GSP cycle will begin from January 1, 2006 after the current cycle ends on 31 December 2005.

China may seek redress at the World Trade Organisation (WTO) after the European Union imposed anti-dumping tariffs on several Chinese makers of a widely used synthetic fibre, state press and officials said Wednesday.
   The Ministry of Commerce was considering the country’s first independent suit filed with the WTO’s Dispute Settlement Body at the urging of Chinese producers of polyester staple fibre (PSF), the China Daily reported
   China had previously taken part in a case against steel tariffs imposed by the United States but this had been in collaboration with the European Union (EU), Japan and South Korea.
   “We have already filed an application to the Ministry of Commerce,” Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles, told AFP.
   “We hope the Ministry of Commerce will support our opinion and help solve the problem fairly,” Cao said.
   The ministry was not available for comment.
   The European Commission, the EU’s executive body, on March 10 imposed tariffs ranging from 4.9 to 49.7 percent on PSF goods made in China, citing an increase of dumped goods that “are a cause of the material injury suffered by the Community industry”.
   PSF is often woven with other fibres such as cotton and wool, and is also used for padding in cushions, car seats and jackets.
   Chinese textile companies are facing increasing attempts by rivals to limit their sales amid an explosion of cheap exports following the expiry of a system of global textile quotas on January 1.
   Mainland companies claim the EU ruling is unfair because of the way the Commission calculated the “normal” price of PSF, Cao said.
   “The enterprises who believed they were unfairly treated in the case want to seek a solution to the dispute from the WTO,” he said.
   The EU has also asked that Chinese polyester filament apparel fabric manufacturers pay anti-dumping duties of up to 85.3 percent following a preliminary ruling, with some 800 Chinese firms awaiting a final determination.

India is ready to spend up to 25 billion dollars on overseas oil and gas ventures to meet spiraling demand, Oil Minister Mani Shankar Aiyar said Wednesday.
   ‘We are in a position to raise 25 billion dollars to invest in acquiring oil and gas properties abroad,’ the Press Trust of India (PTI) news agency quoted Aiyar as telling a meeting of industrialists.
   India’s state-owned oil firms already have stakes in oil and gas fields in Russia, Sudan, Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar, but lag far behind Chinese companies, PTI said.
   Aiyar said India, Asia’s fourth largest economy, and China would continue to be dictated to by market forces and compete in some areas but there were also possibilities for working together.
   ‘My ambition is not to compete with China but to explore ways and means of partnering with it,’ he said.
   ‘There are enormous prospects for India and China to work together... our interests are complementary.’
   India buys nearly 70 per cent of its annual requirement from the global market. With its economy growing at around seven per cent, its reliance on imported crude is expected to grow to around 85 per cent in the next 20 years.
   State-run Oil India Limited (OIL) meanwhile Wednesday announced it had won the rights to prospect for crude in a field in Libya.
   Senior OIL officials signed an agreement with Libya’s National Oil Company in Tripoli on Tuesday, OIL spokesman Prasanata Barkakaty said in Guwahati in Assam state.
   ‘I would say this is a landmark agreement as this is the first time that OIL is going to be an independent operator in exploring for crude oil overseas,’ Barkakaty said.
   OIL won the contract after outbidding some 56 international companies.

Health groups slammed Indian lawmakers and their communist allies on Wednesday for passing a patents bill, saying it would make drugs more expensive for millions of people suffering from diseases like AIDS.
   The lower house of parliament passed the bill on Tuesday by a voice vote, a key step towards meeting India’s WTO obligations.
   The bill, which will become law once approved by the upper house of parliament, will require drug makers to apply for a licence to the government to manufacture patented drugs. They will also have to pay a royalty to patent owners.
   The old law allowed Indian pharmaceutical firms to copy patented drugs as long as they used a different manufacturing process.
   “The new patent bill gives more rights to patent holders at the expense of generic drug manufacturers. As a result, life-saving drugs would no longer be produced at affordable prices,” global charity campaigner Oxfam said in a statement.
   Medicins Sans Frontieres (MSF) agreed.
   “There will be a gradual increase of prices, particularly of new essential drugs,” Ellen ‘t Hoen, director of MSF’s policy advocacy and research division, told Reuters.
   What health and charity groups are particularly alarmed about is that the new bill does not set a limit for royalty amounts to be paid by Indian firms to patent owners, mainly multinational drug corporations.
   “Multinational pharmaceutical firms, which hold patents, could delay issuance of a licence to make a new drug by dragging their feet over what should be the royalty amount,” said Leena Menghaney of the Affordable Medicines and Treatment Campaign (India), a health advocacy group.
   The government argues that patent recognition is vital for India’s booming drug industry to carry out its own research and development to attract foreign partners.
   Trade minister Kamal Nath said safeguards in the bill — pushed by leftist lawmakers — will ensure prices of essential drugs do not surge in the near future.
   India is already the world’s fourth-largest maker of medicines by volume but ranks 13th in value, reflecting the low prices of medicines in the local market.
   “Because India is one of the world’s biggest producers of generic drugs, this law will have a severe knock-on effect on many developing countries which depend on imported generic drugs from India,” Oxfam’s regional adviser Samar Verma said.
   Health groups say among the most affected group will be poor people suffering from HIV (news - web sites)/AIDS.
   “This is a matter of life and death. People’s lives depends of the availability of affordable medicines,” Hoen said.
   India has more than 5.1 million people living with HIV/AIDS, the second largest number after South Africa. Around 25.4 million people live with the deadly virus in the whole of Africa and just about 3 percent have access to ARV drugs.

Sacked Cambodian garment worker Soy Phalla doesn’t know much about global free trade, except that the $45 monthly wage she used to earn made her too expensive to keep on.
   Formerly employed stitching shirts and trousers for US and European clothes retailers, she now trudges from factory to factory on the outskirts of Phnom Penh looking for work, worried where her next meal is coming from.
   ‘I don’t know how much longer I can keep doing this,’ Soy Phalla told Reuters in barely audible tones, her face covered by a scarf to keep the choking dust from her nose and mouth.
   The impoverished southeast Asian nation’s clothes-making industry, which last year employed 261,000 people, most of them women, was a rare economic success story for a country still recovering from the genocidal ravages of Pol Pot in the 1970s.
   Under the protection of a unique US trade quota, it grew from nothing in the mid-1990s to account for over $1.1 billion of exports in 2004, more than 80 per cent of all official shipments.
   But that protection ended on Jan 1, 2005 with the expiry of a global quota system called the Multi-Fibre Agreement, exposing Cambodia and other economic minnows to the full force of cut- throat competition, from China in particular.
   At first, officials were optimistic that the industry, which makes shirts, shoes and trousers for the likes of Adidas, Nike and Gap, could survive as a niche operator with a surprisingly good reputation for labour conditions and worker rights.
   But already evidence is mounting, in the form of more and more factories closing, and more and more jobless women like Soy Phalla wandering
   the streets, that they were wrong.
   Just down the road, outside another shuttered plant, 25- year-old Sok Nguon pondered a future without the job that had been a lifeline for her entire family in one of Asia’s poorest countries. One third of Cambodians live on under a dollar a day.
   ‘I’ve been looking for four weeks, but haven’t found a job. I think I will have to go back to my village and start working again on the farm,’ she said. ‘But that is also difficult because of the drought. I do not know yet what to do.’
   Soy Phalla lost her job when the South Korean-owned Sam-Han Fabrics factory where she worked shut down suddenly, leaving her and her colleagues without the severance pay to which they are entitled under Cambodia’s fragile labour laws. A three-day protest ensued outside the gates of the deserted plant, before riot police were sent in with AK-47s and electric
   batons to disperse them.
   Police said they were protecting the property, but the workers and human rights groups accused them of brutality and breaking up a legal demonstration.
   Commerce Minister Cham Prasidh admits that 26,000 workers have already lost their jobs this year-around 10 per cent of the entire garment sector labour force.
   But he says the blame lies mainly with ugly scenes outside a growing number of closed factories, rather than the simple sums: that a small, notoriously corrupt country, where the cost of doing business is relatively high, cannot compete against China.
   ‘Earlier this year, we heard there were more overseas purchasing orders, but when February came they cancelled them because the buyers were worried about demonstrations,’ he told a meeting of foreign private sector investors and diplomats.
   ‘We’ve got good policies, but too many demonstrations make buyers worry and not come to buy,’ said Cham Prasidh.
   Nor is Cambodia the only country losing out as China, whose clothing exports to the United States jumped 41 per cent in January compared to the previous month, edges closer to becoming the world’s number one tailor.
   Washington and Brussels both said this month they would press Beijing hard to slow down exports of cheap clothing that have stoked fears of huge textile job losses in America and
   Europe. The United Nations estimated in January that 20 of the 200 factories around Phnom Penh had closed and aid officials fear many redundant workers will be pushed towards prostitution or become victims of human trafficking.
   ‘The risk is that they would migrate to other countries as illegal and unskilled workers or that they would enter the sex industry,’ said Noeleen Heyzer, executive director of UNIFEM, the U.N.’s women’s agency.
   Lurking in the wings is the very real concern of a concomitant rise in HIV/AIDS in what is already the worst afflicted country in the Asia- Pacfic region.
   The government has set up a labour arbitration council. The World Bank’s International Finance Corporation and US retailer Gap have launched training programmes for factory foremen to try to improve labour relations. But the optimistic rhetoric of last year has evaporated. ‘We are on the brink,’ Cham Prasidh said.

Microsoft and Hewlett-Packard (HP) jointly held a seminar on the cutting-edge solution for mail-server management in Dhaka recently, says a press release.
   The seminar titled 'Best of Breed: MS Exchange on HP Server' highlighted end-user benefits, easier management and higher ROl. Technical heads from leading business houses participated in the seminar.
   Quazi M Murshed, business development manager of Microsoft Bangladesh Limited gavethe welcome address while Rumesa Hussain, business development manager of Hewlett-Packard and Peter Karlsson, enterprise technology strategist of Microsoft Operations Pte Ltd, Singapore, gave product presentations.

The Premier Bank Limited has rewarded its 37 employees for their performance in marketing bank’s credit cards in Dece-
   mber last year, says a press release.
   The chairman of the Premier Bank, Dr. HBM Iqbal and the managing director, Kazi Abdul Mazid, gave away certificates and cash awards to the 37 employees at the bank's weekly managers’ meeting held on the bank premises on Monday.
   Sponsor director, Abdus Salam Murshedy, Shafiqur Rahman, chief consultant of the bank, Md Mokhlesur Rahman and the deputy managing director, Nurul Alam Chowdhury attended the function.
   Branch managers, divisional heads, members of the bank's branch management committee were also present on the occasion.
   The award was given as an special incentive to the employees for their outstanding performance in marketing the bank’s credit cards during the month of December.

Prime Bank Limited signed an agreement with Arab National Bank to facilitate non-resident Bangladeshis living in Saudi Arabia to send home their earnings, says a press release.
   Under the agreement, Arab National Bank will provide Prime Bank with TeleMoney draft services, TeleMoney remittance and rush money to facilitate fast, safe, and cost-effective transfer of wage earners' remittances from the KSA to Bangladesh.
   Prime Bank is the only Bangladeshi bank that has been offered the Rush Money Service by the ANB which will enable Prime Bank to receive and disburse NRBs' remittances in one day through its 36 branches.
   Recently, Prime Bank has also established a remittance arrangement with Placid NK Corporation, NY, USA. Besides, the bank has existing remittance arrangement with UAE Exchange Centre LLC, Oman International Bank SAOG, Oman and UAE Exchange Centre, Federal Exchange and ICS Money Transfers (UK) Ltd.

Pubali Bank Limited has recenlly started scripless trading of its shares in stock exchange through CDBL, says a press release.
    Khondkar tbrahim Khaled, managing director of the bank, inaugurated the bank’s demat share trading.
   For dematerialisation of Pubali Bank shares traded on the stock exchanges through the Central Depository System (CDS) of CDBL involves conversion of share certificates of the bank into electronic form, which wifl help eliminate the risk of damage, loss, forgery and duplication of share documents. Delivery through electronic book entry under CDS will also result in prompt transfer of ownership.

M. Shamsul Alam and Anwarul Huq have been promoted to the post of deputy chairman of Reliance Insurance Limited, says a press release.
   Erlier, Shamsul Alam served as managing director and chief executive officer while Anwarul Huq was the joint managing director of the company.
   Besides, the company appointed Akhtar Ahmed, former managing director, Sadharan Bima Corporation, as managing director and chief executive officer.

An eight-day training of trainers course on 'entrepreneurship development and business management' conducted by the Job Opportunities and Business Support was held in Dhaka recently, says a press release.
   The training course was arranged for 15 persons from Padakhep Manabik Unnayan Kendra.
   The objective of the course is to address the need of the grassroots entrepreneurs and enhance their business capacity.
   The JOBS initiated the training course in collaboration with Padakhep under the approach of Business Development Approach.

The first associates' meeting of Kasila (Bangladesh) Ltd was held in Dhaka recently, says a press release.
   The minister for fisheries and livestock, Abdullah Al-Noman, attended the meeting as chief guest.
   Kasila (Bangladesh), a joint venture between MM Agha Ltd, Chittagong and Kasila Farms Ltd, India, was set up in 2002.
   The company is a pioneering force in the country's poultry industry. It has implemented the first Grandparent project in Bangladesh.
   Kasila product is a well-balanced genetic package doing excellent performance at the parent and commercial levels.

European Union leaders endorsed looser budget deficit rules Tuesday that should spare euro zone heavyweights Germany and France from punishment, brushing aside a warning from the European Central Bank.
   The leaders swiftly rubber-stamped a deal negotiated by their finance ministers on Sunday under which countries will be given more time to bring excess deficits back under the EU limit and can claim exemption for all sorts of public spending.
   French President Jacques Chirac said the changes in the Stability and Growth Pact gave special treatment for defence spending, development aid and investment in research.
   The ECB voiced serious concern on Monday, warning that laxer fiscal discipline could undermine confidence in the euro.
   Agreement on the revamped pact, barely an hour into the two- day meeting, shifted the spotlight back on to a disputed plan to liberalise the market in services, which threatens to derail a French referendum on the EU constitution.
   The battle over how far to open cross-border competition for businesses ranging from computer consultants to plumbers took centre-stage, with France and Sweden leading the charge for a fundamental rewrite of the European Commission’s draft law.
   The EU executive believes that liberalising services, which account for 70 per cent of the EU economy, holds the key to rekindling Europe’s anaemic economic growth.
   But Chirac was set to demand far-reaching changes in the EU executive’s draft legislation.
   Hostility to the so-called “Bolkestein directive” has helped propel the “no” camp into the lead two months before a French referendum that could seal the fate of the new constitution.
   “The Bolkestein proposition will not fly, so we have to start again,” Swedish Prime Minister Goran Persson said.
   Trade unions and the left, echoed by many centre-right governing politicians, have warned against “social dumping”—undermining wages, consumer rights and environmental standards by an influx of service- providers from low-cost countries.
   Chirac also won support from some conservative west European politicians. Danish Prime Minister Anders Fogh Rasmussen demanded far-reaching changes and Elmar Brok, a senior German Christian Democrat in the European Parliament, said it should be withdrawn to save the French referendum.
   But a leading spokesman for the 10 new mainly east European members of the bloc, Slovak Prime Minister Mikulas Dzurinda, warned against “protectionism”.
   The newcomers see liberalising services as vital to enable their economies to catch up with western Europe.
   European Commission President Jose Manuel Barroso refused to withdraw the proposal and said allegations that it would undermine existing workers’ rights were unfounded.
   However, he pledged amendments to take account of key French concerns, notably by exempting public services, including health, and guarding against “social dumping”.
   Rasmussen told reporters in Copenhagen he would press for amendments to protect workers’ and consumers’ rights.
   “Denmark is clearly against the proposals, but we are not alone in our criticism. So I expect several countries will join forces at the summit and demand a number of changes,” he said.
   Luxembourg Prime Minister Jean-Claude Juncker, chairing the summit, made clear that changes would indeed be needed to the services directive.
   “Nobody can sensibly dispute the fact that we need to open up the services sector in Europe ... but it must be done with respect for certain sensitivities and convictions,” he said after pre-summit talks with trade unions and employers.
   The 25 leaders were to re-launch the so-called Lisbon Agenda of economic reforms, adopted in 2000 with the objective of making Europe the world’s most dynamic, knowledge-based economy by 2010, a target date which has been dropped as unrealistic.
   Progress has been slow, especially in the core euro zone countries—Germany, France and Italy—and the EU economy has fallen further behind the United States, with growth forecast at less than 2.0 per cent in 2004, and unemployment near 9 per cent.
   But a growing realisation of the need to cope with an ageing population and rising competition from Asia has spurred the EU to try to refocus the broad initiative on a more limited set of targets to boost growth and jobs.
   The new priorities cover increasing employment levels, promoting research and innovation, investing in infrastructure and reforming health and pension systems.
   Instead of naming and shaming laggards, the Commission is urging national governments and parliaments to take charge of the economic reform agenda and appoint national bodies to accelerate change.

The European Union has “some concern” about the U.S. administration’s choice of Paul Wolfowitz to become president of the World Bank and wants to meet him by March 31, the bloc’s presidency said yesterday.
   “We are asking Mr Wolfowitz to come down to explain what he wants to do concerning certain points that we have put on a paper and we want the (Luxembourg) presidency to phone tomorrow to see if it is possible that he comes,” Luxembourg Economics Minister Jeannot Krecke said. “It should be before the 31st.”
   “There is some concern about the way Wolfowitz intends to handle the policy of the World Bank,” he told Reuters on the sidelines of an EU summit.
   The nomination of the US deputy defence secretary to succeed James Wolfensohn as World Bank president has been criticised by some in Europe because of Wolfowitz’s role as architect of the Iraq war.
   More than 1,300 European aid organisations have put their names to a statement voicing “strong concern” about Wolfowitz’s nomination. “We fear his appointment risks the bank becoming seen as a tool of the current controversial U.S. foreign policy,” the statement said.
   But other finance ministers indicated the EU was unlikely to block his appointment, which comes at a time when the Europeans are seeking U.S. backing for former EU Trade Commissioner Pascal Lamy’s bid to head the World Trade Organisation.
   “I would like to say that if you can’t get the one you love, you have to love the one you can get,” said Swedish Finance Minister Par Nuder on his way into the summit.
   After the meeting, Dutch Finance Minister Gerrit Zalm said:
   “Some countries already know what they are going to do, and some countries will wait until these talks have taken place.
   “I did not see any very negative attitudes so I think he is taken as a very serious candidate,” Zalm added.
   Austrian Finance Minister Karl-Heinz Grasser noted the U.S. expected Europe to back Wolfowitz in return for its support of a European head of the International Monetary Fund.
   He added, however: “We should not automatically send the signal that Europe and the United States are dividing the international financial institutions between them.”

Oil prices deepened losses toward $55 a barrel on Wednesday as OPEC (news - web sites) deliberated a second supply increase to cool spiralling prices and a recovering dollar lured some fund money out of commodities.
   The US dollar held near a one-month high against the euro on Wednesday, boosted by the Federal Reserve (news - web sites)’s decision to raise interest rates by a quarter per centage point to 2.75 per cent.
   US light crude traded down 43 cents to $55.60 a barrel, slipping further from the record $57.60 struck last week after a 2.5 per cent drop on Tuesday on speculative profit-taking. Brent crude oil fell 24 cents to $54.35 a barrel.
   But brokers and traders said the market’s bullish sentiment was intact, with prices up nearly 28 per cent from the start of the year as booming demand in the United States and China threatens to strain global production capacity.
   “I don’t think this little dip we’re having is going to last too long,” said Bob Frye, a Woodside, California-based commodity broker at Access Futures and Options Trading. “I’m looking for a lot higher prices — $60 to $63 is my major target.”
   The market will be watching US government data due out at 10:30 a.m. EST on Wednesday, expected to show commercial crude stocks rising but product inventories in decline as many refiners are still shut for maintenance and demand remains firm.
   Crude inventories probably rose 2 million barrels in the week to March 18, a Reuters survey of 12 analysts found.
   Gasoline stocks were expected to have fallen 1.2 million barrels and distillate stocks, which include heating oil, were seen down 1.3 million barrels.
   Dealers will be scrutinizing the gasoline data after last week’s steep fall in stocks showed demand was running strong despite record-high prices at the pump.
   OPEC President Sheik Ahmad al-Fahd al-Sabah said on Tuesday producers would not need to decide for up to two weeks whether to increase supply by another 500,000 barrels per day (bpd), but could act quickly if needed.
   The Organization of the Petroleum Exporting Countries (OPEC) agreed on March 16 to immediately raise output limits by 500,000 bpd but failed to halt crude’s rally with prices shooting to a record following day.
   Many analysts are concerned that OPEC’s output hikes will leave the cartel with little spare production capacity to deal with unexpected supply outages. The group is already pumping at close to a 25-year high and non-OPEC producers are at full tilt.
   Adding to concerns is a three-day warning strike called for April 11 by the two main oil unions in Nigeria, the world’s eighth-largest oil exporter and a big supplier of high-quality sweet crude, coveted for its ability to make gasoline.

Russian officials are preparing to deal a final blow to crippled oil major YUKOS and are likely to force it into bankruptcy to strip its remaining assets, YUKOS and analysts said yesterday.
   Russia carried out a de facto re-nationalisation of YUKOS’s biggest oil unit, Yugansk, in December, selling it by auction to recover $27 billion in back taxes in a move that YUKOS sees as the Kremlin’s revenge for its owners’ political activities.
   But YUKOS still has 600,000 barrels per day of output in Siberia and five refineries in Russia, assets which analysts predict will be sold as the Kremlin seeks to regain control over the key energy sector.
   News agency Interfax quoted Alexander Temerko, a top executive who is leaving YUKOS, as saying he expected Yugansk’s new owner, state oil firm Rosneft, to file a bankruptcy suit soon against YUKOS. Temerko said YUKOS would resist the move.
   “It becomes clearer and clearer that the future strategy against us has been chosen,” said a YUKOS source.
   “Unlike in the Yugansk case, they are now switching to the bankruptcy of YUKOS because it seems to them to be the easiest way to complete our destruction,” he said.
   Analysts say Rosneft is the front-runner to pick up YUKOS’s remaining assets if the dismantling resumes.
   Rosneft paid $9.3 billion to buy the initial winner of the December Yugansk auction, the mysterious Baikal Finance Group, and last week filed an $11 billion suit on behalf of Yugansk against YUKOS at Moscow’s arbitration court.
    It accused YUKOS of causing financial losses at Yugansk by using value- destroying trading schemes from 1999 to 2003.
   YUKOS dismissed Rosneft’s suit as “ludicrous” since the same schemes were used as a basis for the $27 billion back-tax claim against YUKOS.
   On Tuesday, business daily Vedomosti also reported that the General Prosecutor’s Office had filed a letter to the heads of YUKOS’s remaining oil units, Samara and Tomskneft, in which it advised them to claim $11.5 billion in damages from the parent company, also for its use of transfer pricing practices.
   The sale of Yugansk to Baikal and then Rosneft sparked major criticism from investors for not being transparent, despite a statement by President Vladimir Putin that the auction met very high legal standards.
   Analysts said on Tuesday they also believed that bankruptcy would better suit the government and that they tended to agree with Temerko despite the fact that the outspoken manager was on his way out of YUKOS, having been fired by the board.
   “As incredible as these developments seem, successful claims would exponentially raise YUKOS’s debts once again, lending further assistance to the seizure of YUKOS’s remaining assets,” said Matthew Thomas from Alfa Bank.
   Interfax quoted unnamed sources as saying that, by winning the bankruptcy case against YUKOS, Rosneft or other state firms could get a majority of seats on YUKOS’s board of creditors, who would then govern the sale of remaining assets to cover debts.
   The board of creditors, which under Russian bankruptcy law has precedence over management, could then sideline chief executive Steven Theede and recall all YUKOS’s suits abroad, including its U.S. bankruptcy protection filing.

The Federal Reserve raised a key US interest rate a quarter percentage point to 2.75 percent yesterday, conceding inflation risks were growing but expressing confidence gradual rate rises can contain prices.
   The central bank’s policy-setting Federal Open Market Committee voted unanimously to raise the benchmark federal funds rate—which affects credit costs throughout the economy—for a seventh straight time since the current rate-rise campaign began last June.
   The Fed said it could keep raising short-term borrowing costs at a “measured” pace, implying further modest quarter-point increases instead of larger ones financial markets had begun to brace for.
   But with a subtle shift in wording, policy-makers made clear they were not complacent about prices and gave themselves leeway to act swiftly if necessary.
   “Though longer-term inflation expectations remain well- contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices,” the Fed said.
   “With appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal,” read the statement outlining the central bank’s decision, which also increased the largely symbolic discount rate to 3.75 percent.
   Bond and stock prices sagged as the Fed stiffened its commitment to keep prices steady.
   Prices for 30-year U.S. Treasury bonds fell more than a full point while yields, which move in the opposite direction, climbed to 4.91 percent. Prices for 10-year notes fell 30/32s of a point and the yield rose to 4.65 percent, the highest since last July.
   Investors interpreted the Fed statement as more hawkish about inflation, implying a higher risk of faster increases in credit costs which sapped hopes for rising corporate profits.
   The Dow Jones industrial average tumbled 94.88 points, or 0.90 percent, to end at 10,470.51. The Nasdaq Composite Index fell 18.17 points, or 0.91 percent, and finished at 1,989.34.
   “The Fed is now implying that if they tighten policy as appropriate then price stability would be secured, but not if policy is left accommodative,” said economist Alan Ruskin of 4CAST Ltd. in New York.
   Before the decision, financial markets had been particularly focused on how the Fed characterized its expectations for future policy movements and some economists had thought policy-makers could drop the “measured” pledge.
   The economy’s steady advance since the 2001 recession has gained pace in recent quarters. This has fanned fears of building inflation pressures, especially in view of soaring prices for housing, commodities and energy.
   David Kelly, a senior economist with Putnam Investments in Boston, said the Fed likely was hoping to avoid larger rate rises but may have had to nod to the prospect because some FOMC members are more worried than others about getting behind on rates and letting inflation get a toehold.
   The Fed noted that economic output was still gaining solidly and that job markets were improving, a sign of its optimism that the expansion remains on solid ground.
   Some analysts believe gross domestic product, or GDP, will grow at an annual rate faster than 4 percent in the first quarter. A final reading on fourth-quarter performance is due out next week and also is expected to come in at about 4 percent, up from last month’s estimated 3.8 percent rate.
   In testimony to Congress in mid-February, Fed Chairman Alan Greenspan described rates as still “fairly low,” signaling no let-up in a drive to push them to a “neutral” level, one that neither hinders growth nor fosters inflation.
   When the Fed began its gradual tightening cycle last June, overnight rates stood at a 1958 low of 1 percent. Even after seven increases, the central bank on Tuesday still dubbed them “accommodative,” code meaning that they must go higher.
   Economists say a neutral fed rate lies somewhere from 3 to 5 percent but policy-makers have been loath to talk specifics.
   Job growth picked up in February, with the government reporting that U.S. employers hired 262,000 workers for the best gain in four months. So far, though, wage increases have been very modest—a key factor for tamping down inflation.
   Some analysts think the Fed could pause in its rate-rise campaign around mid- year, taking time to assess incoming economic data, but then resume the drive to lift the federal funds rate to around 4 percent by year’s end.

Soe Soe, a 29-year-old woman working in Myanmar’s struggling garment manufacturing industry, can barely remember the last time she had a day off.
   March 2 was a national holiday, Peasants Day in Myanmar, but few rag trade workers here can afford to turn away an offer of overtime, even if that means grueling 11-hour days, seven days a week, in factories trying to stay open despite US sanctions and the end of global textile quotas.
   ‘Of course, I know the government requires factories to close on Sundays and national holidays, but we have no choice (but to work). We need the money,” says Soe Soe, who has worked for eight years at a private garment factory in the Shwe Pyi Thar industrial zone in northern Yangon.
   Officials from the Myanmar Garment Manufacturers Associa-tion insist the factories are operating in line with the country’s labor laws and up to UN standards.
   But with monthly wages starting at 7,000 kyat (about eight dollars), raises rare and inflation soaring, employees like Soe Soe say working every shift offered is the only way to survive.
   ‘Five years ago, I earned enough money to send a bit to my family, but now I am struggling to stay out of debt,” Soe Soe says.
   With eight years experience, two years of university education, and including her extra shifts, Soe Soe says last month she took home just 38,000 kyat, about 43 dollars.
   After the United States imposed sanctions following an attack on Aung San Suu Kyi and her followers, which ended with the Nobel peace prize winner returning to house arrest in 2003, many factories here moved just across the border into Thailand.
   With border controls often murky, many of the Myanmar workers followed their jobs to the area in and around Mae Sot, the Thai border town opposite Myawaddy.
   A 25-year-olds Nilar Win and Ni Ni share a 25 by 25 foot roomin a factory in west Yangon with with 13 other women.
   Half the women said they were university graduates, scraping by with whatever jobs they can find.
   Raises are virtually unheard of. “But we do not dare speak out about our feelings, because the owner warned us the factory would be closed down if there’s a workers’ problem,” Ni Ni says.
   Inflation was estimated at 60 per cent in 2003.
   When the United States banned Myanmar’s exports in 2003, the country lost its largest market. Of the roughly 300 textile and garment factories operating at the time, the junta says 160 have been shuttered.
   Over 80,000 workers lost their jobs, affecting some 400,000 of their dependants, according to officials.

Calls for a weakening of the euro to help boost euro-zone competitiveness are misplaced and countries should work instead to reduce global imbalances, Bundesbank Chief Economist Hermann Remsperger said.
   “In the context of the world economy, in which global imbalances are seen as potential risk factors for the world economy, a strategy aimed at weakening the euro cannot be recommended as an economic policy option,” Remsperger wrote in an article for Frankfurter Allgemeine Zeitung newspaper to be published on Wednesday.
   “Instead, a reduction of global imbalances should be worked on. An economically sensible bundle of measures would include a general increase in the savings rate in the U.S. as well as more exchange rate flexibility in Asia and a strengthening of growth in Europe, especially Germany,” the article said.

The Standard Bank Ltd on Wednesday announced 20 per cent stock dividend for 2004. The Bank has also reported net profit of Tk244.69m for the year. There will be no price cap on trading of the bank’s shares following the declaration on Thursday. Before the announcement, the stock gained marginally 0.7 per cent to Tk458 on the day. The annual general meeting will be held on May 16.

Rupali Bank’s profit falls
Profit of the state-owned Rupali Bank Ltd, which is now in the process of privatisation, slipped to Tk100.75 million at the end of 2004 from Tk248.12 million a year back. The earning per share of the bank came down to Tk8.06 from Tk19.85. The share price of the bank decreased 1.7 per cent to Tk582 on closing.

SEC show-causes Eastern Housing The Securities and Exchange Commission on Wednesday issued a show-cause notice to the Eastern Housing Ltd for non-payment of dividend to the shareholders. The commission asked the directors and managing director to explain about the matter within next 60 days.

Beximco offers 10pc stock, 10 pc cash dividend
The Beximco Ltd recommended 10 per cent cash and 10 per cent stock dividend for the year 2004. The shares of the company, listed in category B, saw a marginal gain on the day to Tk80.2. There will be no price limit on the trading of the shares on Thursday following the declaration. The annual general meeting will be held on April 28.

Spot trading of Pubali Bank share till March 29 Shares of Pubali Bank started trading in the spot market on Wednesday and will remain continue till March 29 as the record date of the bank is March 31. The bank declared 100 per cent stock dividend for year 2004. The share trading will remain suspended on March 31.

Square Tex makes higher profit
Profit of the Square Textile Ltd rose to Tk198.69 million in the year 2004 from Tk167.89 million a year back. The earning per share jumped to Tk7.17 from Tk6.06.

Demat trade of six cos begins
Share trading of Islami Bank Ltd, City Bank Ltd, Pubali Bank, Mudas Financing, Shine Pukur Ltd and Rangpur Foundry Ltd started on Wednesday in demat form under the central depository system. Paper shares of the company will not be allowed for trading from now on.
Sources: DSE, CSE

DSE closes up
Trading at Dhaka Stock Exchange closed higher Wednesday with the gainers dominating the losers. The DSE General Index increased by 15.6678 points or 0.8138 per cent to close at 1940.8146 points. A total of 175 issues traded Wednesday. Of them, 74 gained, 72 declined and 29 remained unchanged.
— New Age

CSE remains higher
Trading at Chittagong Stock Exchange closed higher Wednesday with the gainers outnumbering the losers. The CSE All Share Price Index increased by 44.75 points or 0.68 per cent to close at 3646.65 points from 3621.90 points on Tuesday. The CSE-30 Index also rose by 34.56 per cent to close at 3454.45 points from Tuesday’s 3419.89 points. Of the 78 issues traded today, 34 gained, 38 declined and six remained unchanged. Some 1,301,461 shares and debentures worth Tk 8.09 crore changed hands against 1,766,324 shares valued at Tk 6.34 crore of the previous trading day. Market capitalisation stood at Tk 219.37 from Tk 218.22 billion on Tuesday.
— UNB

Repo auction held
The repo auction for commercial banks and financial institutions was held at the Bangladesh Bank in Dhaka on Wednesday. Thirteen bids of 1-day tenor amounting to Tk 1050 crore were received, of which eleven bids amounting to Tk 385 crore were accepted. The rate of interest against the accepted bids was 8.00 per cent per annum, said a BB press release.
— UNB

Coke changing marketing management
The Coca-Cola Co, the world’s largest beverage maker, said Wednesday it is making management changes involving its marketing and European units as it tries to boost profits. The Atlanta-based company said it has assigned Mary E Minnick, president and chief operating officer of its Asia division, to lead a new corporate function overseeing the coordination of Coke’s marketing, innovation and strategic growth segments. Coke’s senior marketing and innovation officials will report to Minnick. The company also said that it is making changes to its European management as it announced that Sandy Allan, president and chief operating officer of Coke’s European group, has decided to retire. Upon Allan’s retirement, the company will realign its geographic group structure in Europe. Allan will work with the team on these efforts after May 1, when the management changes take effect, to assure a smooth transition.
— AP

Hyundai to offer XM satellite radio
Hyundai Motor Co. (005380.KS) said on Wednesday it plans to offer XM Satellite Radio as standard equipment on all US models by 2007. The move should boost the emerging satellite-radio business, and signals a win for XM Satellite over rival Sirius Satellite Radio Inc.
— Reuters

Yahoo! gears
up China biz
Senior executives of Yahoo!, the world’s leading Internet portal operator, have arrived in Beijing intent on gearing up its e-commerce and search engine business in the Chinese market. Led by Daniel Rosensweig, chief operating officer, and Jeff Weiner, senior vice-president for search and marketplace, the team yesterday pledged to enlarge Yahoo!’s investment in China and introduce new products. The visit came amid widespread market rumour that Yahoo! is pondering acquiring NASDAQ-listed Sina, the leading domestic Internet portal operator, and Shanda, the largest Chinese online games operator. But Rosensweig declined to comment on the rumour yesterday. “I am here because China has the second largest Internet population in the world, and Yahoo! is the largest Internet company in the world,” he said. “China has tremendous market opportunities,” he added. For the executives, it was a long day yesterday.
— AP

Oman Air introduces Delhi-Hyderabad flights
Oman Airlines is planning to spread its network in India by introducing new services to Delhi and Hyderabad and enhancing its capacity on Mumbai and Kochi routes. The announcement was made by the CEO of Oman Airlines, Abdurrahman bin Harith al Busaidy and the Chairman of the Board of Directors, Said bin Hamdoon al Harthy,during the 4th annual sales and marketing conference held at Cairo. Busaidy, reviewing the last year performance of the carrier, said 2004 began with a lot of optimism that the airline industry will finally return to profitability following the losses the industry suffered in the previous three years. “Despite the suspension of the Mombasa and Colombo routes, the airline carried about 50,000 more passengers in 2004 than the preceeding year, achieved an annual seat factor of 70 per cent (versus 66 per cent in 2003), and achieved revenue growth of 8 per cent over 2003,”The Omani Observer quoted Busaidy saying. Oman Air, however, will have to face the challenge of the new low cost fares introduced by carriers like Air India Express.
— ANI

Indonesian economy to grow by 6pc to 7pc
Indonesia’s economy can grow by 6 per cent to 7 per cent in the medium term if the government continues with its economic reforms, the International Monetary Fund (IMF) said in its review of the Second Post Monitoring Program of Indonesia released here Wednesday. The IMF praised Indonesia’s medium-term strategies, saying thatthe country will reach its economic target if the program is well implemented. However, the IMF urged the Indonesian government to improve its reform in tax administration in order to derive more revenues fromthe non-oil sectors. Regarding to the Indonesian government’s plan to provide tax amnesty, the IMF said that it can dampen the revenues which are based heavily on oil exports.
— Xinhuanet

India to rise petrol, diesel prices
The government is considering raising prices of petrol and diesel as international rates have skyrocketed, petroleum minister Mani Shankar Aiyar told the Rajya Sabha today. He said this fiscal has witnessed the highest rise in oil prices in the international market in recent times. Compared with the average Indian basket crude of $27.98 per barrel during 2003-04, the rates shot up to $37.87 during 2004-05. “During February and the first fortnight of March, it has been as high as $42.67 per barrel,” Aiyar said. The total under-recoveries to oil marketing companies due to non-revision of prices of petrol and diesel from April 1, 2004, to March 15, 2005, was estimated at Rs 1, 526 crore. He said the government had tried to maintain the price mechanism for petrol, diesel, kerosene distributed in the public distribution system and domestic cooking gas in such way as to not to affect the interests of stakeholders, including consumers and public sector oil companies.
— Telegraph