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The government has taken up a Tk 225.86 crore project for modernisation of the Chittagong Port through computerisation and infrastructure development to increase its competitiveness and efficiency.
   Of the total project cost, around Tk 168.93 crore is expected as loan from the Asian Development Bank while Chittagong Port Authority will bear the rest amount from its own resources.
   With the implementation of the project, the Chittagong Port will be able to meet international port security and environmental standards, a shipping ministry official said.
   Shipping and port charges will also come down, which will increase the competitiveness of the country’s main seaport, he noted.
   The project titled ‘Chittagong Port trade facilitation project’
    has already been incorporated in the revised annual development programme of the current fiscal and is expected to be completed by fiscal 2008-09.
   ‘In the long term, the project will foster economic growth by facilitating increased international trade’, the official said.
   The project will comprise three main components with several sub-components to be implemented by three separate agencies.
   The first component will be implemented by the port
   authority and it comprises installation of a computer-based system for container
   terminal operations and document processing; improvement in the internal traffic circulation system; and construction of an oil waste management
   facility and a bridge at the Maheskhali channel. The total cost of the component is Tk 76.60 crore.
   The second component, to be implemented by the Chittagong Customs House, includes activation of ASYCUDA ++ computer system linked to CPA computer system and installation of two container scanners.
   ASYCUDA is a computerised customs management system which covers most foreign trade procedures.  The system handles manifests and customs declarations, accounting procedures, and transit and suspense procedures. The total cost of the component is Tk 74.34 crore.
   The third component will be implemented by the Roads and Highways Department at the cost of Tk74.90, which includes construction of a nearly one kilometre flyover inside the port at a cost of Tk42 crore.
   The project will also increase exports through the port and help in making Chittagong a gateway for traffic from India, Nepal and Bhutan.
   The Chittagong Port handles some 85 per cent of the country’s $17 billion worth of international trade.
   Currently, the port has the capacity to handle around 6 lakh TEUs per year and according a study of Asian Development Bank titled ‘Dhaka-Chittagong Economic Corridor,’ traffic through the port is expected to grow around three million TEUs by 2020.

Prices of vegetables and farm chicken marked a decline on the back of increased supply last week that ended Friday, but retail rice market did not mirror the slight fall in wholesale price though boro harvest is in its peak.
   Most of the summer vegetables were selling at Tk10-12 a kilogram, lower by Tk 2-4 than the week before levels. Adequate supplies pushed the prices of summer vegetables down, traders at the city markets said.
   Price of a kilogram of Okra ranged between Tk10 and Tk12 on Friday, while bitter gourd sold Tk12-14 a kilogram, cowpea Tk12-14, aubergine Tk10-12 and snake gourd at Tk8-10, while the prices were between Tk16 and Tk 20 a week back.
   Price of broiler chicken fell for the second straight week as supplies from farms went up significantly due to hot spell. Farm chicken was available at Tk68 a kilogram last week, down from Tk73 a week before and near Tk80 two weeks back.
   Rice price marked an insignificant decline of an average of Tk10 a maund (37.2 kilogram) without any impact on retail price and belying the traders’ emphatic prediction that rice prices would fall markedly with the start of boro harvest that hit the market more than two weeks back.
   The price of per maund medium quality Pari was quoted Tk580, down by Tk10 from the week ago level. The retail price remained Tk18 a kilogram as it was a week before.
   Biplob sold at Tk570 a maund at the wholesale outlet marking a decline of Tk10, but retail price was set at Tk18.
   Medium quality miniket was selling at Tk22 per kilogram though its wholesale price lost Tk 10 per maund to Tk740 last week.
   Prices of fish, sugar, some brands of milk powder, soybean oil, onion and some spices including garlic saw fresh rises last week, while ginger and condensed milk declined further.
   Sugar price rose to Tk36 a kilogram from Tk33-34 a week back while a five-litre can of ‘Rupchanda’ soybean oil sold at Tk258, up from Tk251 a week ago.
   A one-kilogram pack of Diploma milk powder sold at Tk256, up Tk2 from a week ago while price of a 450-gm NIDO pack rose to Tk140 from Tk135.
   Price of local variety onion rose by Tk 1 per kilogram after the government imposed duty on imported onion that made the squeezed supply of Indian onion, traders said. Onion sold at Tk 14 per kg last week.
   Both local and China varieties of garlic gained Tk 2 per kg to Tk34-36 and Tk 44. Prices of Chinese and Indian varieties of ginger dropped to Tk60 from their week ago level of Tk70-75 a kg.
   Per carton (48 cans) of Danish, Kwality and Starship brands of local condensed milk declined to Tk1344 from week ago average of Tk1440.
   Prices of salt, atta, potato, red chilli, beef, egg and lentil remained more or less unchanged.

The president of the Asian Development Bank closed the organization’s annual conference in Istanbul on Friday with a warning that further economic integration of Asia was essential.
   ADB president Haruhiko Kuroda said that despite rapid economic growth in the region, small and medium-sized countries risk being left behind unless their economies are integrated with Asia’s giants.
   Kuroda, who was elected in February to head the multilateral institution that counts 63 developed and developing countries as members, has been pushing for further integration for weeks, saying it would encourage economic growth.
   At the closing press conference of the ADB meeting, he said the greatest long-term challenge to the region ‘was whether the region can cooperate and integrate.’
   ‘Asia and the Pacific have huge countries but we also have many small and medium-sized economies and economic integration is key for their economies to continue to grow and continue to be effective in the global market.’
   He did not give any deadline or parameters for this, but said the ‘ADB is prepared to provide its support for economic integration.’
   Kuroda has created a new department in the ADB, the office of Regional Economic Integration, headed by his economic adviser Masahiro Kawai, an economics professor of Tokyo University, to work exclusively on making the economies of Asia work together more efficiently.
   As part of this effort, ADB chief economist Ifzal Ali said the bank could play a crucial role in bringing down the costs of transport and distribution among countries in the region.
   ‘Infrastructure, trade facilitation—these are the kind of things the ADB is very good at and I am very confident that what the president has stated, we will deliver very quickly over the next few years,’ he said.
   Ong Keng Yong, secretary-general of the Association of Southeast Asian Nations (ASEAN), said he was encouraged by Kuroda’s new emphasis, remarking that ‘what he is talking about is not airy-fairey stuff.’
   ‘It will take time and a systematic approach,’ he said. ‘You will have to organize your programs, your technical assistance and judiciously use the official development assistance for regional integration.’
   Kuroda has cited ADB’s success in fostering the Greater Mekong Subregion as an example of the integration he is encouraging. Other potential areas of integration are Central Asia and South Asia, he has said.
   Analysts at the conference said, however, that integration would take time and options like a European-style common currency and single market were still very far off.
   At the conference, developing member nations called
   on the ADB to increase lending, a call that Kuroda acknowledged, saying: ‘All of us are concerned about the fact that the ADB’s net resource transfers to developed member countries have become negative in recent years.’

India’s retail banking giant UCO Bank has decided to open a representative office in Bangladesh by March 2006.
   This was sated Monday in a media statement of the UCO Bank, a government of India undertaking founded in 1943.
   ‘In the fiscal year 2005-2006 (March-February), the bank has planned several initiatives including expansion of overseas operations through Representative Offices in Bangladesh, China, Malaysia, Thailand and Sri Lanka,’ said the Kolkata-based top Indian bank.
   The bank statement said with many innovative and mid market products, business size of the UCO has touched Rs 77704 crore as at the end of March, 2005 with a growth rate of 28.25 per cent.
   The Bank has set a target of Rs 1,00,000 crore for total business to be achieved by March 2006 with deposits and advances amounting to Rs 61,500 crore and Rs 38500 crore.

Ukrainian authorities said Friday they had issued an international arrest warrant against a former regional governor suspected of extortion and abuse of power, as part of an ongoing drive against corruption under the former regime of Leonid Kuchma.
   The interior ministry said Volodymyr Shcherban, former governor of the northern region of Sumy and a close associate of Kuchma, was suspected of forcing company bosses in his region to give up shares to companies he controlled.
   Interpol’s Ukraine office has asked Russia to look for Shcherban as well as former election commission head Sergei Kivalov, former interior minister Mykola Bilokon and former mayor of Odessa Ruslan Bodelan.
   Officials also said Wednesday they had asked Interpol’s help in arresting a former aide to Kuchma wanted on abuse of power and embezzlement charges and believed to be in neighbouring Russia.
   A Kiev court has ordered the arrest of Igor Bakai, who was in charge of presidential logistics and faces seven to 10 years in prison if found guilty, the ministry said.
   Ukraine’s new president, Viktor Yushchenko, has made the fight against corruption one of his main priorities. However opposition parties accuse the government of persecuting opponents.

Garment workers observed a one-hour hunger strike at Muktangan in the capital on Friday, demanding more compensation for the family of the affected workers of the Spectrum Sweater and Knitting Limited at Savar in Dhaka.
   The Jatiya Garments Sramik Federation and the Bangladesh Garments and Industrial Workers’ Federation organised the programme, chaired by labour leader Amirul Haque Amin. Babul Akhter and Shahida Sarkar addressed the gathering.
   The leaders demanded immediate arrest of and punishment for the owners of the factory.
   They also demanded Tk 2 lakh in compensation for each of the 76 workers killed in the factory building collapse on April 11.
   The BGMEA on May 3 distributed Tk 1 lakh in compensation to the family of 19 workers.

About 1.3 million people employed in the frozen shrimp processing industry in greater Khulna fear loss of their jobs as they are facing gradual closure of units.
   Out of 80 processing plants, 40 have already been closed down and 25 are on the verge of shutting down, industry sources said.
   The closure of the processing units may lead to a setback in shrimp export in coming months and throw thousands of workers out of job, they feared. Bangladesh earns more than Tk 2,000 crore by exporting frozen shrimp.
   The exporters say, 68 per cent of exportable shrimps are processed in the farms of Bagerhat, Khulna, Satkhira and Jessore.
   Sources at Bangladesh Frozen Food Exporters Association said only 15 to 18 factories out of 83 are in full operation.
   The Khulna region vice-president of the association, Qazi Belayet Hossain, told the news agency that lack of government support and coordination at different levels, and absence of advanced planning are the reasons behind the dismal situation of the industry.
   Besides, the exporters have to use Chittagong port instead of Mongla Port which cost them extra expenditures.

India’s tea output in the financial year 2004/05 ending March 31 fell 2.32 per cent to
   830.92 million kg from 850.70 million kg a year ago, the state- run Tea Board said Thursday.
   But tea exports in 2004/05 were up 1.51 per cent at 185.83 million kg from 183.07 million kg the previous year. The board said production in the first quarter of 2005 was estimated at 84.66 million kg, up 14.19 per cent over 74.14 million kg in the same period a year ago.
   The board said exports in the first three months of the year also grew by 5.59 per cent to 41.38 million kg from 39.19 million kg tea a year ago propelled by higher demand from West Asian and North African countries. Industry officials said the trend in the first quarter of 2005 was encouraging as it pointed to likely higher production and exports in 2005/06.
   ‘The increase in exports in the March quarter is significant as it has happened because of higher demand from countries like Iraq and other Gulf countries,’ a Tea Board official said. ‘The first quarter production figures are also encouraging.’
   The Indian Tea Association, a forum of traders and exporters, said it was targeting exports of 200 million kg in 2005.

The cell-phone operator, Banglalink and the land phone company, Bayphones, signed an interconnection agreement in Dhaka on Wednesday, says a press release.
   Lars P Reichilt, chief executive officer of Banglalink and MA Hashem, chairman and chief executive officer of Bayphones, signed the agreement on behalf of their respective companies.
   Under the agreement, the two phone companies will provide their subscribers with access to each other’s network.
   Altaf Husain Faquih, director (admin, govt relations and legal affairs), Shawkat Osman, senior manager of Banglalink and Rabiul Hossain, director and Milu Chowdhury, manager (corporate affairs) of Bayphones, were present in the signing ceremony.

China will not abruptly tighten fiscal policy to cool its booming economy despite inflationary pressures and rapid investment growth, Finance Minister Jin Renqing was quoted as telling the official Xinhua news agency.
   ‘A stable fiscal policy suits China’s changed economic situation. It’s inadvisable to put a sudden brake on fiscal policy and tighten the policy in an all-round manner,’ Jin told Xinhua in an interview late Thursday.
   A copy of the interview conducted on the sidelines of the Asian Development Bank’s annual meeting in Istanbul was seen by Reuters before publication. Beijing has announced plans to trim its budget deficit by 6 per cent in 2005, winding back fiscal stimulus that began in 1998 but is no longer seen as desirable by a government struggling to rein in surging economic growth.
   ‘Investment in some sectors is growing too fast and the problem of duplication of investment is serious and striking,’ Jin said. ‘The inflationary pressure still exists.’
   Analysts say China’s uphill battle to tame its red-hot economy has raised the chances of a long-awaited yuan revaluation this year.
   On Wednesday, Jin told reporters that intense speculation on the yuan made it difficult for Beijing to reform its rigid currency regime now.
   But a day later, the United States and Japan kept up the pressure, saying China needed to adopt a flexible exchange rate policy.
   Jin told Xinhua that the government would implement a fiscal policy that supported weaker sectors and curbed investment in fast growing ones.
   ‘It’s necessary to adjust the expansionary fiscal policy, but there are still many weak links in economic and social developments, such as agriculture, education, public health and social security, that need to be strengthened,’ Jin said.
   But he said there would be no abrupt tightening and reiterated plans to lower the fiscal deficit-to-GDP ratio to around 2 per cent in 2005 from 2.5 per cent last year.
   China has been trying since mid-2003 to cool its booming economy through regulatory steps to limit bank loans for overheated sectors such as property and steel and cement, and making it tougher to win approval to convert land for industrial use.
   Despite these measures, the economy grew a robust 9.5 per cent in the year through the first quarter, a rate analysts say puts pressure on Beijing to roll back economic stimulus.
   After the Asian financial crisis hit many of its neighbours in 1997-98, China began running annual deficits to implement a ‘proactive’ fiscal policy that aimed to stimulate the economy.

Pakistani cotton prices slipped over the past week amid dull trading and dealers said Thursday that they would remain soft in the coming days because of the poor quality of the remaining stocks.
   There were only around 150,000 bales of cotton left in the market and that too of poor quality, they said.
   The state-run TCP sold 58,500 bales of fine-quality cotton from its stocks last week to ease pressure on a tight market, while it is scheduled to sell another 60,000 bales on Saturday.
   Dealers said some millers were also building their stocks by importing fine quality cotton.
   The new crop arrivals from southern Sindh province are expected to start in May, while in the main growing area of central Punjab province in June.
   The local textile mills have booked nearly 1.3 million bales of foreign cotton in the current season, dealers said.
   In the kerb market, the key crop varieties traded in a range of 2,000 to 2,150 rupees per maund on Thursday, compared with 2,050 to 2,250 last week.
   Pakistan produced a record 14.8 million bales of cotton for the 2004/05 May to March crop—exceeding a 10.72 million bales target. Officials say the bigger crop stems from an increase in the cultivation area.
   On Thursday, the Karachi Cotton Association fixed the official spot rate, or base price, for Grade 3 cotton at 2,358 rupees per maund (40 kg) - - lower than the previous week’s 2,385.

Myanmar plans to hold a special auction of jade and gems from June 28 to July 5 aimed at reducing illegal exports and earning much-needed foreign currency, state-run Myanmar Ahlin newspaper reported Friday.
   No details were available about the auction, announced just one month after the military government auctioned off around 24 million euros (31 million dollars) worth of Myanmar’s renowned jade, sapphires, rubies and other precious stones.

Asia should plough more of its massive savings and foreign exchange reserves into regional rather than Western capital markets to guard against another 1990s-style financial crisis, Asian finance ministers say.
   Asian economies, which control more than two-thirds of world’s foreign exchange reserves and have an average savings rate of over 30 per cent, invest heavily in dollar-denominated assets, a key source of financing for the US current account deficit.
   While some of the money finds its way back into Asia by way of investment, policymakers believe that inflow is fickle and can be too hot to handle in times of financial crisis like that in 1997/98.
   ‘It is ironic that while Asian countries have the necessary financial resources to be tapped upon to underwrite costs for the region’s development, Asian savings are often intermediated outside Asia,’ said Malaysia’s second Finance Minister Nor Mohamed Yakcop.
   ‘‘Principally invested in US and European markets, these savings have been known to subsequently flow back into the region in the form of portfolio investments. This raises the possibility of a recurrence of the dual mismatches of maturity and currency, resulting in a repeat of the 1997/98 Asian financial crisis,’ he said.
   Asian finance ministers and central bank governors have gathered in Turkey’s biggest city for the three-day annual meeting of the Asian Development Bank (ADB) which kicked off on Wednesday.
   On Wednesday, they agreed to double the size of a regional forex swap pact for fighting attacks on currencies and vowed to develop local bond markets to avoid financial turmoil.
   Haunted by memories of the Asian financial crisis and the pain of subsequent economic reforms, the region has tried to set aside political differences and to build financial cooperation. ‘We do have ample funds and savings available and this needs to be recycled within the region,’ Japanese Finance Minister Sadakazu Tanigaki told reporters in Istanbul.
   But Charles Dalllara, managing director of Washington-based International Institute of Finance, said Asian governments’ options of parking their money in the region were limited as most local capital markets remained underdeveloped.
   ‘You have to look at the realities of the global capital market. There’s simply not enough (investment opportunities). They have three choices. Either you invest in the US, euro or the yen,’ he said.
   Asian economies have also aggressively been pursuing free trade arrangements both within the region and with other countries, particularly the United States, to boost growth.
   The Association of Southeast Asian nations and the three north Asian giants, Japan, China and South Korea stepped up economic and financial cooperation after the 1997/98 crisis.

The International Monetary Fund will meet cotton producers in Africa later this month to find ways to help governments and struggling farmers to cope with falling prices and growing output from China and Brazil.
   Large African producers Benin, Burkina Faso, Mali and Chad are also being strangled by US and European farm subsidies and a weakening US dollar, said IMF’s African director Abdoulaye Bio Tchane.
   ‘We are quite worried because there are a number of countries that are in financial and fiscal distress because of the situation,’ Bio Tchane told Reuters in an interview on Wednesday.
   Falling revenue from lower cotton prices was squeezing already-tight government budgets and social programs in impoverished African countries. Smaller producers like Senegal, Tanzania and Togo were also feeling the pinch, he said.
   Bio Tchane, a former Benin finance minister, said cotton output for many of the larger African producers represented between 9 and 10 per cent of their gross domestic product.
   The impact of the 25 per cent fall in global cotton prices shaved about 1.5 to 2 per cent off GDP, he said.
   ‘The IMF wants to be part of the solution, but we are not the only ones and are mindful that the WTO, World Bank and European Union and some of the others have a role to play in this,’ Bio Tchane added. ‘We believe it should be a global effort,’ he said.
   The World Trade Organization in March rejected a US appeal against earlier rulings prompted by Brazil that Washington was breaking world trade rules with the subsidies it paid to cotton farmers, which totalled $4 billion in 2001.
   Global lenders like the IMF and World Bank have long urged rich nations to open their markets to developing world to help promote growth.
   IMF Managing Director Rodrigo Rato will travel to Benin for the May 18 meeting to discuss with cotton producers and governments what can be done to help. By visiting the countries, the IMF is training a spotlight on the global impact of cotton subsidies.
   African states say they have lost hundreds of millions of dollars in income because US farm subsidies have depressed world prices.

Low inflation, low unemployment and solid growth—vote for our economic record, Prime Minister Tony Blair had begged the British people.
   But as his Labour party starts an unprecedented third term with a much reduced majority, there are growing signs the jewel in the Blair government’s crown is losing its sparkle.
   Pinched by higher interest rates, rising fuel bills, the end of the house price boom and the threat of higher taxes, Britons seem to have finally called time on a spending spree that has powered the world’s fourth largest economy for years.
   ‘In terms of timing, Blair may have called it just right,’ said Philip Shaw, chief economist at Investec in London.
   ‘Chill winds are blowing in the consumer sector. At the same time the global economy is going through a soft patch and icy blasts are being felt by manufacturers. The economy is growing considerably more slowly than it was a year ago.’
   Analysts said finance minister Gordon Brown’s forecast of 3.0 to 3.5 per cent growth for this year was optimistic.
   Figures out just this week showed retail sales falling at their fastest pace since the early 1990s slump and companies have been lining up to bemoan the waning feel-good factor.
   Home improvement retailer Kingfisher Plc, general store Argos and music seller HMV Group Plc have all blamed falling sales on downbeat shoppers.
   Off the High Street, pub and leisure group Whitbread has warned of spending easing. Gym group LA Fitness Plc said membership was going down.
   The Bank of England’s greatest fear—a sharp consumer retrenchment—appears to be turning into reality and many analysts predict interest rates have peaked at 4.75 per cent and will have to come down later this year.
   Returned to parliament for his constituency of Kirkcaldy and Cowdenbeath with a thumping 18,212-vote majority, Brown showed no sign of worry.
   ‘Our purpose will be to maintain and entrench our economic stability and prosperity,’ he said in his acceptance speech just across the road from the church where his father was a minister.
   But economists said Brown had little leeway to cushion any economic slowdown as he did after the collapse of the dotcom boom in 2001 by massive increases in public spending.
   Most are already predicting the government will have to raise taxes by around 10 billion pounds a year so as not to break its golden rule—that it only borrows to invest over the economic cycle.
   ‘We all know the budget position is worsening and we all know they will have to do something about it,’ said David Scammell, fund manager at Schroders in London.

Australia and the United States, military allies in the invasion of Iraq but fierce rivals in the wheat export trade, are sharpening their scythes for a battle over the big Iraqi grain market.
   But Russia, the Ukraine, the European Union, India, Canada and Argentina are also eyeing Iraq despite the chaos, difficulty and danger that dogs a market of some 3 million tonnes of wheat, worth some $500 million a year.
   ‘Iraq will be a very commercial, competitive market,’ said Peter McBride, a spokesman for Australia’s monopoly wheat exporter AWB Ltd.
   Australia staked an early claim to retain its largest share of the market despite what Baghdad sees as a tarnished record over alleged kickbacks during the Saddam years. AWB has strongly denied the allegations.
   AWB bosses flew to Iraq within days of last week’s parliamentary approval of the new government in Baghdad, holding weekend meetings with Prime Minister Ibrahim al-Jaafari and others.
   After grabbing a dominant share of the Iraqi wheat market when former ruler Saddam Hussein refused to buy US wheat after the Gulf War of the early 1990s, AWB is more confident in Iraq than most.
   ‘We continued to buy Australian wheat after the war because of its high quality. Bids are open to all,’ Ahmad al-Mukhtar, Trade Ministry director of external relations in Iraq, told Reuters by telephone from Baghdad.
   Iraq’s Finance Minister Ali Allawi said reforming the procurement system for food and other supplies was a priority.
   ‘There has been obvious corruption in procurement and there were illegal and illegitimate transfers of huge funds abroad, outside the control of the Iraqi state,’ Allawi said.
   AWB believes it will take 1.5-2.0 million tonnes of the Iraqi wheat import market, which is seen rising to between 3 million and 4 million tonnes from last year’s reduced imports of 2 million tonnes. After decades of neglect to the farm sector, Iraq’s new leaders dream of modernising farming techniques to produce enough crops and reduce dependence on imports.
   But only 500,000 tonnes of wheat was coaxed from the ravaged land last year and no one expects a quick recovery in output.
   A recent visit to the United States by top brass from Iraq’s wheat-buying body, the Iraqi Grain Board, led by director general Khalil Assi, encouraged US suppliers by dropping a requirement that they deliver grain to upcountry Iraq by truck.

Thai Prime Minister Thaskin Shinawatra on Friday dismissed local business leaders critical of ongoing free trade negotiations with Japan, calling them ‘cartels’ afraid of foreign competition.
   ‘They cannot maintain the status quo as cartel businesses living day by day, calling for assistance from the government when they’re bankrupt,’ Thaksin told reporters before meeting Japan’s economy minister. ‘The real problem is that they have to change ... They cannot stay put and hope for high tariffs to protect them as they sell overpriced goods to consumers who stand to lose,’ he added.
   Thaksin spoke before meeting Japanese Economy Minister Shoichi Nakagawa, who is here for two days of high-level talks, including on the free trade deal.
   Somkid Jatusripitak, Thailand’s deputy prime minister and finance minister, declined to reveal what was discussed in his earlier meeting with Nakagawa, but said he was hopeful for a Free Trade Agreement (FTA) deal by July.
   Thailand and Japan have held seven rounds of talks since February 2004, according to Thailand’s Department of Trade Negotiations.
   Japan, Thailand’s second largest export market after the United States, wants tariffs abolished on Thailand’s steel and automotive parts imports.
   Thailand in turn wants Japan to loosen its restrictions on agricultural products, particularly chicken and sugar, and for its citizens with skills, such as cooks, to be able to work in Japan.
   But business leaders in the Federation of Thai Industries and the Board of Trade have publicly said that they are not ready to compete with their Japanese rivals without steel and automotive tariffs. They argue that keeping restrictions on certain sectors, or phasing in tariff reductions over time, would help protect domestic industries.

Pakistan Prime Minister Shaukat Aziz on Friday pledged to provide “a level playing field” in a bid to attract foreign investors to bolster his country’s economy.
   At the same time, Aziz downplayed sectarian violence and terrorism threats, saying they were being contained, and he assured Malaysian business leaders that their investments would be safe.
   “On Pakistan’s economy, we have come a long way in the last five years. We have a lot more distance to cover. We have introduced reforms but our tasks are far from over,” he told a meeting of the Asian Strategic and Leadership Institute here.
   He urged investors to put Pakistan high on their radar screens.
   “Pakistan is one of the few countries where there is a level playing field. There is deregulation. You can have a 100 per cent stake in your company. There is a very liberal mind-set now in Pakistan,” the former finance minister said.
   Aziz identified construction, hotels and health as sectors that offered opportunites for investors, adding: “You can get into any area.”
   “Pakistan is now on an upward trajectory of economic growth. Pakistan of today and tomorrow is a Pakistan of opportunity and progress,” he said.
   “Pakistan’s economy is back on track so we have told the IMF we will not need any new borrowing,” he added.
   Aziz, who worked with US banking giant Citibank for 30 years, said Pakistan would borrow for development purposes from the World Bank and the capital markets which had proved very successful.
   “We went for a Euro-bond issue (recently); we thought we will raise three to five hundred million dollars and we got subscriptions of two billion dollars. We took five hundred dollars and returned the rest with a thank-you note.”
   Aziz said Pakistan used to have to spend almost two-thirds of government revenue on debt servicing but this has changed.
   “Borrowing for consumption ... is what we are avoiding. Borrowing for development and growth is most welcome,” he added.
   Potential Malaysian investors said they needed more convincing.
   “There are still security and political considerations before we can consider investing in Pakistan,” a director of a Malaysian construction company said on condition of anonymity.

Britain’s food safety watchdog on Thursday issued a recall of 35 food products, saying they could contain a suspected cancer-causing dye.
   The move follows the largest food scare ever in Britain, when nearly 500 products were recalled in February because they contained a similar carcinogenic industrial dye banned for human consumption.
   All the products on the list Thursday were supermarket-brand items which have been treated with Para Red, an industrial dye most often used to produce printing ink.
   Last month Para Red was discovered in several products, including paprika spice, Tex-Mex dinner kits and barbecue-flavored rice cakes, which were withdrawn from sale.
   The Food Standards Agency (FSA) said the amounts of the dye in the newly recalled products were so small that they probably posed no harm to humans but it was ‘sensible’ to avoid eating them.
   ‘Para Red, like Sudan 1, is an illegal dye that should not be in food,’ said the FSA’s director of food safety, Dr. Andrew Wadge.
   ‘People understandably don’t expect or want it to be in their food. At the levels being found the risk is likely to be very small indeed, but it is right that food businesses are removing these products from sale.’ The food watchdog said it was possible that more products containing Para Red would be found, aside from the products labelled by supermarket giants Asda, Sainsbury, Tesco, Waitrose, Iceland and Co-op. It said the contaminated spice was supplied by a Spanish company, Ramon Sabater, imported into Britain by Lion Foods and was believed to originate in Uzbekistan.
   Following the discovery in February of Sudan I in hundreds of British products, the dye scare spread to China after it was found in products used by food giants Heinz and Kentucky Fried Chicken.

Japan on Friday took another step towards resuming US beef imports as an official panel decided young cows should be exempt from screening tests required on all slaughtered cattle for Japanese consumption.
   The Food Safety Commission agreed at a meeting Friday to advise the health and agriculture ministries that cows aged 20 months or younger be exempt from screening, a commission official said.
   “We expect to make the advice possibly later in the day,” the official said.
   Decisions by advisory panels are not legally binding but ministries in principle follow their recommendations. Local media reports have said imports could be resumed in the second half of this year.

Procter and Gamble said Friday it will invest around 10 million dollars annually in the Philippines over the next three years as part of plans to make the country the Asian manufacturing and service hub of the US consumer products giant.
   Procter and Gamble intends to make the Philippines the regional source and exporter of its paper products, toilet soaps, dishwashing liquids and detergent products to other Asian countries, a company statement said.
   The statement followed an announcement from President Gloria Arroyo’s office that the company had pledged to invest an additional 1.5 billion pesos (27.8 million dollars) in its Philippine operations, some of which will be used to expand capacity at its manufacturing plant in Cabuyao town south of Manila.
   Procter and Gamble said it also intends to expand the operations of its Manila Service Center by providing support services like accounting and information technology to more of its operations worldwide, including Eastern Europe, the Middle East and Africa.
   “We are one of the largest producers of consumer goods in the Philippines and probably one of the few to export consumer goods to other countries. Obviously, this has a very positive impact on our employment and with our suppliers,” the company statement said.

A major rating agency declared billions of dollars of debt owed by General Motors and Ford to be ‘junk’, a blow that will increase borrowing costs for the nation’s two biggest automakers.
   Standard & Poor’s Ratings Services downgraded the debt Thursday to below investment grade, or junk status, causing the automakers’ stock to tumble Thursday on Wall Street and leading the overall market lower.
   The two other major debt rating agencies, Moody’s Investors Service and Fitch Ratings, still rate the debt of both GM and Ford as investment grade.
   The companies said they disagreed with S&P’s decision and said they face no cash crunch.
   Still, it amounts to one more hit for the automakers. They are losing market share at home to Asian competitors, seeing sales soften for their most profitable models and facing enormous health care and post-retirement liabilities.
   In the first four months of the year, GM’s U.S. sales fell nearly 5 percent and Ford’s sales declined 4.2 percent.
   Standard & Poor’s said No. 1 General Motors Corp. and No. 2 Ford Motor Co. can no longer count on generating enormous profits from their sport utility vehicle lineups.
   Besides higher gas prices, a key factor in slumping SUV sales is the proliferation of smaller, car-based utility vehicles called crossovers — models available from most major automakers today.
   ‘GM’s financial performance has been heavily dependent on the profit contribution of its SUVs,’ said Standard & Poor’s credit analyst Scott Sprinzen. ‘Recently, though, sales of its midsize and large SUVs have plummeted, and industry demand has evidently stalled.’
   GM and Ford bonds also fell in value Thursday, and while the companies said they have no immediate need for large new debt sales, analysts said they can expect to pay substantially higher interest rates on funds they borrow in the future.
   The numbers involved already are enormous: GM paid about $12 billion in interest on debt last year and Ford’s tab totaled about $7.1 billion. GM’s consolidated debt as of
   March 31 was $291.8 billion and Ford’s totaled $161.3 billion, S&P said.
   The move by S&P will force many institutional investors to reshuffle their portfolios, causing massive selling of GM and Ford bonds at a lesser value. That’s because some institutions are banned from dealing in junk — or high-yield — bonds, an asset class known to trade with more volatility and greater risk of default than investment-grade securities.
   S&P said its downgrade of GM’s long-term debt reflects its conclusion that the current strategies of GM Chief Executive Rick Wagoner and his management team may not be effective in dealing with the automaker’s competitive disadvantages. S&P also cited as concerns GM’s European operations, which have been unprofitable since 1999, and weaker demand in
   what had been a sizzling Chinese market.
   However, S&P noted GM should have no difficulty accommodating ‘near-term cash requirements.’ It also said GM’s highly profitable GMAC finance arm still likely has ‘sufficient funding flexibility’ to support GM even without an investment-grade rating.
   In a statement, GM said it was disappointed with S&P’s decision but that it and its finance arm have adequate cash and liquidity to fund their operations ‘or the foreseeable future’.
   GM said it had $19.8 billion in cash at the end of the first quarter, and GMAC had $18.5 billion in cash and securities. ‘Clearly, GM has many challenges in North America, but the company is moving aggressively to address these challenges,’ the company said.

Pak forex reserves hit $13b
Pakistan’s foreign exchange reserves rose $4 million in the week ending April 30 to an all- time high of $13.0 billion, the central bank said Friday. Reserves held by the State Bank of Pakistan rose to $10.231 billion from $10.220 billion a week earlier, while those held by commercial banks fell to $2.769 billion from $2.776 billion, the central bank said in a statement. The State Bank of Pakistan gave no reason for the increase in its reserves, but bankers said they rose on the central bank’s dollar purchases from the market to cover oil import payments.
— Reuters

Maruti profits
jump 57.4pc
India’s largest carmaker Maruti said Friday year net profit jumped 57.4 percent as it notched up its highest annual sales ever. The company, majority-owned by Japan’s Suzuki Motor Corp, said net profit climbed to 8.53 billion rupees (196 million dollars) for the financial year to March 31, 2005 on sales that leapt 19.7 percent to 113.53 billion rupees. The strong performance came against booming demand for cars, fuelled by rising affluence among India’s burgeoning middle class, easier credit and strong economic growth. Fourth-quarter profit for the January-March period rose 65.1 percent to 2.59 billion rupees on sales that grew 9.3 percent to 31.421 billion rupees. Maruti Udyog Ltd sold 536,301 vehicles during the year, including the export of 48,899 cars, the company said in a statement.”Higher sales and the success of our inhouse productivity improvement programme has boosted our bottomline,” Maruti’s managing director Jagdish Khattar said.
— AFP

Canada jobless rate dips to 6.8pc
Canada added 29,000 jobs in April, pushing its unemployment rate down 0.1 percentage point to 6.8 percent, the lowest since December 2000, Statistics Canada announced Friday. So far this year, employment has risen by 0.3 percent, adding 55,000 jobs, while the number of hours worked grew by 1.4 percent, “boosted by a strong increase in full-time work in April,” primarily among women, the agency said. There were more jobs in construction as warmer weather returned, as well as more architects, engineers and computer systems designers hired. But, manufacturing remained weak, shedding 71,000 jobs in the past 12 months — a 3.1 percent drop in employment since last year.
— AFP

General Electric boosts profit outlook
US conglomerate General Electric on Friday boosted its profit outlook for the second quarter, citing stronger-than-expected orders over the past month. The company, which has operations ranging from aircraft engines to insurance to film and broadcasting, and manufactures products ranging from lightbulbs to medical scanners, is often seen as an indicator of the overall economy. GE, the world’s largest company in terms of stock market value, said net profits should be in the range of 43 to 45 cents per share, up from a range of 42 to 44 cents. GE’s first-quarter net income of 4.04 billion dollars, or 38 cents a share, beat the average analysts’ prediction. “The company is in great shape,” GE chairman and chief executive Jeff Immelt said. “Our April orders are strong and we have increased guidance for second quarter and maintained guidance for the year. We remain committed to meeting or exceeding our expectations and those of investors.”
— AFP

Greek air traffic controllers
begins strike
A three-hour strike by Greek air traffic controllers will briefly shut down all the country’s airports on Saturday, the controllers’ trade union said on Friday. Union President Manolis Antoniadis said the controllers, who are protesting about alleged threats to safety caused by interference from radio stations operating on frequencies close to the ones they use, would strike from 0900 to 1200 GMT on Saturday. During that period “no flight will take place at any airport in the country,” he said. National carrier Olympic Airlines said it would cancel 13 domestic flights and delay a total of 36, including 16 international flights. Flights serving London, Paris, New York and Rome will be among those delayed, the airline said. Greece’s second-largest operator, Aegean Airlines, also cancelled five domestic flights and altered departure times for a further 48 national and international services.
— AFP

US productivity pace up
US business productivity growth accelerated unexpectedly in the first quarter but not enough to cover rising labor costs, which picked up and provided a sign of building price and profit pressures. Nonfarm business productivity, or output per worker hour, rose at a 2.6 per cent annual pace in the January- March period after gaining 2.1 per cent in the fourth quarter, the Labor Department said Thursday. But unit labor costs—an inflation pressure gauge—moved ahead at a 2.2 per cent pace, an acceleration from an upwardly revised 1.7 per cent fourth-quarter advance. Separately, the department said initial claims for jobless benefits climbed 11,000 to 333,000 last week, slightly above Wall Street forecasts but consistent with expectations for rising employment. Financial markets largely ignored the data as traders waited for April employment data due on Friday and focused on Standard & Poor’s decision to cut the debt ratings of General Motors Corp. and Ford Motor Co.. That decision drove stocks down and gave a lift to government bonds.
— Reuters

Miami developer wants to build tallest bldg
A developer wants to build the world’s tallest residential high-rise, reaching 365 meters (1,200 feet) with 110 floors in downtown Miami, a newspaper said Thursday. The proposed Empire World Towers—a condominium tower and an apartment hotel—would include 1,000 residential units and 500 apartment-hotel units, the developer, Leon Cohen, told the Miami Herald. The proposed twin buildings would be nearly 100 meters (328 feet) taller than the world’s current tallest residential building, Dubai’s 21st Century Tower, which reaches 269 meters (883 feet) and has 55 units, the daily said, citing German firm Emporis, which tracks high-rise construction. Cohen, who grew up in Paris and moved to Miami Beach in 2000, paid 31.7 million dollars for land in downtown Miami’s Biscayne Boulevard, according to the Herald.
— AFP