Main Page «
Front Page «
Metro «
International «
Sports «
National «
Editorial «
Op-Ed «
Home «
Timeout «
Letters «

Archive «
Launch Supplement «
Special Supplements «

The fate of the Korean Export Processing Zone (KEPZ) project in Chittagong hangs in the balance due to the government’s indecision over giving the South Korean investor a go-ahead to start operation.
   Youngone Corporation, a South Korean conglomerate which owns 16 industrial units in the country’s export processing zones, developed the infrastructures at KEPZ site at a cost of Tk 100 crore with a plan to house 500 units and bring in foreign direct investment worth $1 billion.
   Several years have elapsed since the project was approved and 2,500 acres of land was handed over to the company by the then Awami League government, but the project could not make any headway due to the government’s go-slow policy, sources said.
   The initiative for much-awaited launching of industrial park developed across the river Karnaphuli in Chittagong failed as the Board of Investment, a wing under the Prime Minister’s office, refused to award the operating licence to the company, they said.
   Allotment of such a huge land for KEPZ raised controversy and the present government led by BNP asked for downsizing the site of the project to only 500 acres, sources in BOI said.
   The investment promotion agency feels 500 acres of land would be enough for setting up the Korean industrial park, they said.
   Despite repeated attempts, the BoI executive chairman, Mahmudur Rahman, could not be contacted for his comments in this regard.
   In 2002 and 2003, the present government formed several committees to look into the alleged irregularities in allowing the site to KEPZ, sources informed.
   When contacted, the Youngone Corporation managing director, CS Sohn, told New Age that the KEPZ could not yet be made operational only due to want of operating licence.
   ‘But our efforts are on and we are still pursuing to obtain the operating licence for KEPZ,’ he said.
   When asked about the reason behind the delay, he said, ‘We don’t know the reason why we are not being awarded the operating licence.’
   ’We are just waiting for the operating licence as we want to make KEPZ functional,’ he added.
   The KEPZ authority aimed at accommodating the industries on garments, textile, electronics and machinery, sources informed.
   Recently, the security guards at KEPZ site came under attack by a group of miscreants, police sources said.

The International Chamber of Commerce, Bangladesh has urged the leaders of the industrialist nations to allow zero tariff market access to all the least developed countries including Bangladesh.
   The global trade body’s local chapter has urged the G8 leaders to work closely on energy diversification, encourage increased private-public investment in energy production, promote energy related technological innovation and foster energy efficiency and conservation.
   It has also stressed that rich countries should ensure temporary movement of semi-skilled and unskilled labourers from poor countries under the mode-4 provision of GATS.
   ‘Bangladesh business appeals to the world leaders to grant zero-tariff facility to all exports from LDCs as well as remove all hindrances including non-tariff and para-tariff barriers,’ said the ICCB president, Mahbubur Rahman, at a press briefing on Saturday.
   There should be free movement of factors of production in order to accelerate growth and development, he added.
   ‘Therefore, leaders of G8 nations should help to facilitate unhindered movement of less skilled workforce under Mode 4 of WTO in order to integrate LDCs in the world economy,’ he added.
   The ICCB has organised the press briefing on the eve of G-8 summit that kicked off on Saturday at St Petersburg in Russia and will continue till Monday.
   On incomplete negotiation of Doha Round, the ICCB president said LDCs have already been sidelined in the Hong Kong ministerial as rich nations agreed to allow duty-free access to 97 per cent of LDCs’ exportable items.
   ‘As Bangladesh has limited exportable items, we are demanding that all our exportable should be under the 97 per cent allowable, not under the rest three per cent,’ he added.
   ‘We are lobbying for the duty free access of garments in US market, but not for the manpower export,’ he told a questioner, stressing the need for intensified efforts for getting access to manpower under mode-4.
   Rahman viewed the country received $4.8 billion as remittance in the last fiscal year and if temporary free movement of workforce is allowed, remittance inflow would exceed $10 billion soon.
   The trade leader pointed out energy security has become a major global concern, especially for the import-dependent poor countries like Bangladesh.
   ‘As oil price has soared $78 per barrel due to Middle East unrest, it will have a multiple effect to the overall economy,’ he warned.
   ‘Transport cost will increase, adding to the production costs and fuelling inflation further to the miseries of poor people,’ he said.
   Quoting an ICC statement already submitted to G-8 leaders, the global trade body’s country chief said that as energy and business are mutually interdependent, ICC welcomes the inclusion of global energy security as an important agenda at the Summit.
   ‘Given the predicted growth in energy demand, ICC stressed that all energy options should remain open, including nuclear,’ he said.
   It voiced concerns over global epidemic of product counterfeiting and copyright piracy, which pose an ever-widening threat to economic and social welfare.
   ‘It is an illegal and often dangerous activity, which touches virtually all sectors and costs the global economy approximately $650 billion annually,’ said Rahman, urging for protection of intellectual property to encourage research and innovation, promote international trade and investment, and ensure sound economic growth and development.
   In reply to another question, ICCB’s executive board member, Aftab-ul Islam said that increasing trend of bilateral free trade agreement has already posed challenge to the multilateral trading regime.
   ‘Smaller economies like Bangladesh will not be benefited from the bilateral arrangement because of their limited capacity to resist any undue pressure from larger partners,’ he added.

A four-member investment team from Saudi Arabia arrives in Dhaka on Tuesday to participate in an international bidding floated by the government for selling off the state-owned Rupali Bank Ltd.
   On behalf of the Saudi Prince Bandar Bin Mohammad Bin Abdul Rahman Al Saud, a business tycoon, the delegation will submit tender to lay a stake in the Rupali Bank.
   The Saudi prince is participating in the international tender with an intention to invest about $5/6 billion in Bangladesh’s banking sector if the state-owned bank is handed over to his company.
   Yousuf Hamed Garzal, the prime consultant of the prince, will lead the delegation, which is scheduled to hold dialogues with the Bangladesh Bank authorities, the Privatisation Commission and the management of Rupali Bank.
   ‘The delegation will come to prepare the bidding documents,’ a competent source told the news agency. The tender will be opened next month.
   Earlier, seven companies from home and abroad were short-listed by the Privatisation Commission as potential buyers of the bank.
   On May 7, the commission approved the expressions of interest (EoI) submitted by the seven companies for taking over the Rupali Bank.
   The companies are Domestic Investors Consortium, Summit Industrial & Mercantile Corporation (Pvt) Limited Bangladesh, National Housing Finance and Investment Ltd. and FMO Netherlands Development Finance Company (four companies jointly sent their EoI), State Bank of India, Sabrie Capital Worldwide Ltd. of Oman, Bank Muscat of Oman, Prince Bandar Bin Mohammad Abdur Rahman Al Saud of Saudi Arabia, Maa International Investment Ltd.

Lebanon’s already shaky economy could suffer long-term harm if the Israeli air and sea blockade continues, economists say.
   The Israeli offensive on Lebanon this week sent stocks in nearby Middle Eastern nations plummeting, but exchanges in the oil-rich Gulf countries took little notice of the carnage.
   The strife triggered a surge in oil prices to a record $78.40 per barrel Friday, though futures settled back down to $77 near the end of the trading session. Crude oil prices are up about 5 per cent this week alone.
   ‘There is a geopolitical risk here and the markets are worried,’ said John Lomax, emerging markets analyst at the HSBC bank in London.
   Shares of Lebanon’s largest company, Solidere, founded by former prime minister Rafik Hariri to rebuild Beirut after the war, fell 15 per cent on Thursday to about $18.30 before trading was halted due to the sharp decline. Markets in the Muslim countries are generally closed on Fridays.
   ‘Lebanon has passed throughout circumstances even worse than this,’ Solidere chairman Nasser Chammaa told Dubai-based Al-Arabiya television. ‘After this crisis passes I expect investors to come back.’
   Lebanese Finance Minister Jihad Azour told Al-Arabiya the country’s immediate concern is to contain the volatile situation and ‘keep the basic needs of life going.’ After that, he said, Lebanon will need to mobilize to rebuild the bridges, airports, TV stations, villages and other infrastructure damaged in the bombardment that left 47 Lebanese dead in two days.
   Azour said it was too early to tell whether Lebanon could meet its expectations of 5 per cent economic growth this year.
   ‘We have to study the damage that has been done to create a full plan for reconstruction. But our ability to rebuild is strong,’ he said.
   Lebanon’s foreign trade and its critical tourism sector could see serious damage if Israel’s offensive lasts very long, said Steve Brice, head of Middle East research for Standard Chartered Bank in Dubai. The United Nations estimates Lebanon’s tourism sector is responsible for 12-15 per cent of Gross Domestic Product.
   ‘The blockade is going to halt all trade to Lebanon, which is going to depress economic growth,’ Brice said. Longer term, Brice said the crisis could force the government to halt economic reforms critical to achieving debt relief.
   In Israel, meanwhile, the country’s stock market tumbled 4.2 per cent, with insurance companies suffering the biggest losses.
   ‘It seems it’s quite clear we have entered a new period of increased uncertainty for Israel’s economy,’ Leo Leiderman, a Bank Hapoalim analyst, told Dow Jones Newswires.
   Stock markets in Egypt and neighboring Jordan also recoiled from the visions of war, with the Cairo stock exchange tumbling 2.4 per cent and Jordan’s Amman stock exchange losing 1.50 per cent.
   HSBC’s Lomax said that the strong impact of violence on Israel’s stock market could affect its neighbors. ‘Other Mideast markets fear being sucked into this. Egypt has been impacted, as investors think Egypt might have a role to play in this debacle.’

Saudi and Gulf stock markets dived sharply at the start of weekly trading Saturday on concerns over escalating tension in the Middle East, an analyst said. The Saudi market, the largest in the Arab world, shed 7.5 per cent at the close of morning trading as the Tadawul All-Shares Index (TASI) finished the session below the 11,000-point mark at 10,980.44. The TASI has so far shed 34.3 per cent since the start of the year. The drop comes after weeks of healthy gains following a plunge due to correction pressure. ‘The major reason for today’s drop in Gulf markets is the result of concerns from the implications of the Israeli aggression on Lebanon and the Palestinian territories,’ Kuwaiti economist Hajjaj Bukhdour told AFP. Kuwait Stock Exchange (KSE) Index dropped 3.3 per cent to close the day’s trading at 9,605.30. Dubai Financial Market Index fell 2.75 per cent to finish at 417.07, close to a two-year low. Abu Dhabi Securities Market also slid one per cent to close at 3,500.32.
   The other Gulf markets of Qatar, Oman and Bahrain are closed on Saturday. The seven bourses of the oil-rich region had been enjoying relative stability over the past few weeks after reeling under a strong correction for several months.

SM Fazlul Huq takes over the shared tenure of presidency of the apparel sector’s apex trade body Bangladesh Garment Manufacturers and Exporters Association Sunday.
   Fazlul, managing director of Choice Group, becomes third of the three presidents of the BGMEA, sharing the same post for eight months each in line with a power-sharing consensus election held in February last year.
   His investiture will take place at a ceremony to be held at BGMEA office after a regular board meeting at 3pm. He succeeds Tipu Munshi of Sepal Garment Ltd.

Poultry farmers in Nigeria whose 300,000 birds were culled this year following an outbreak of the deadly strain of H5N1 avian flu say they could lose their farms to creditors over bank loan default.
   About 64 of 160 farmers who lost their poultry to the avian flu outbreak in Kano City were under pressure from banks to pay back loans or have their farms auctioned to enable banks to recover loans.
   They complained they had still not been paid the 250 naira (two dollars/1.58 euros) per bird compensation promised by the Nigerian government.
   ‘The federal government has not paid 64 farmers the paltry 250 naira per bird compensation and the farmers are being pestered by their creditors, particularly banks, to either pay their loans or have their farms auctioned,’ said Auwalu Haruna, secretary of Poultry farmers Association in Kano.
   ‘Most of the farmers affected by the flu took loans from banks. Now that they have lost all their investment to avian flu and the government has not paid them the promised compensation that we feel is grossly inadequate, they are unable to pay back the loans on time,’ he said.
   ‘If the banks sell off these farms, the poultry industry in Kano will be weakened further and that may even lead to its subsequent collapse,’ Haruna continued.
   The deadly strain of the H5N1 avian influenza was detected on poultry farms in Kano, the commercial hub of the region, last February shortly after the outbreak of the flu virus was confirmed on the first farm in Jaji, 200 kilometres (125 miles) away.
   Over 300,000 birds were lost to the flu outbreak from 160 farms in the city, making Kano the worst hit in Nigeria, veterinary officials said.
   Ibrahim Mohammed Abdullahi of Godiya poultry farm,yet to receive compensation for his 10,000 flu-infected chickens, said banks have sent several letters asking him to pay back loans or lose his farm.
   ‘I keep requesting more time, hoping that the government will pay the compensation to settle part of the loans and renegotiate with the bank for the payment of the remaining part because the compensation will not be enough to settle the whole loan,’ Abdullahi said.
   ‘Besides, the interest is getting higher by the day’, Abdullahi said.
   Haruna blamed the Central Bank of Nigeria and the Kano State government for the farmers insolvency: while the bank has refused to extend a credit guarantee to affected poultry farmers, the Kano State government is foot-dragging in providing financial reliefs.
   Kanos agriculture commissioner Ibrahim Garba said he had presented the farmers case before the state government, which would soon decide on the amount it would pay the farmers for every bird lost to the disease.
   Bird flu has been detected in 15 Nigerian states, including Lagos, and the federal Nigerian capital Abuja. No human case has been reported.
   More than 450,000 chickens have already been slaughtered across Nigeria, mainly in the north where the disease was detected for the first time in sub-Saharan Africa.

The government has trained 6,000 farmers and entrepreneurs mostly women, in adopting modern technologies in agro-based industries by creating open but competitive market facilities for them in the last four years.
   This initiative was taken in the second phase of Agro-based Industries and Technology Development Project (ATDP), a five year venture being implemented with the financial assistance of USAID.
   Mamunur Rahman, coordinator of ATDP told BSS that the main objective of the initiatives is to promote the country’s privately owned agribusiness aiming to boost price competitiveness of agri-products and help potential entrepreneurs in maximizing their profit.
   ‘The modern technologies included pre-investment business plan, new product development, improvement in production technology, marketing mechanism, financial management, market research, establishing market to market linkage, human Resources (HR) development and business troubleshooting’ he added.
   Rahman said, that till December 2004, ATDP had facilitated $121.50 million domestic sales growth and 1.69 million exports sales growth making ways for employment of 76,116 people.
   At present, exports of agriculture products exceeded our target while exports of agriculture products increased by $73 million against the target of $59 million.
   Apart from registering highest domestic sell, agro-based industries provided job opportunities to 88,000 people from 2001 to 2005.
   Chairperson of Chittagong Women Entrepreneurs (CWE) Monowara Ali said ATDP-II services have enhanced the confidence of potential women entrepreneurs.
   ‘CWE members are getting more effective agro-business services as well as their organizations are getting stronger with the support of ATDP’ she added.

Brunei’s Sultan Hassanal Bolkiah used his birthday speech Saturday to call for economic diversification to ensure continued prosperity in the tiny oil-rich nation.
   More than 2,000 foreign and local guests gathered at a 1,700-room palace for the speech by the sultan, once rated as the world’s richest man.
   ‘Among the most important things is to ensure that the sources of oil and gas can continue to be enjoyed by the people,’ the sultan said.
   ‘Along with that, economic diversification is also important for strengthening the country’s survival, including an increase in foreign investment and a more eco-friendly policy.’
   The sultan, one of the world’s longest-reigning monarchs who is also prime minister, defence minister, finance minister and head of Islam, spoke without a microphone in front of a golden canopy where his two wives sat.
   Hassanal last year married Malaysian television news presenter Azrinaz Mazhar Hakim, 26. She bore him a son, his 11th child, last month.
   Brunei, which occupies a sliver of Borneo island, is Southeast Asia’s third-largest oil producer. It is also the world’s fourth-largest producer of liquefied natural gas.
   Official figures say the country had a population of about 341,000 in 2002, and the mineral wealth has brought the citizens one of the highest per capita incomes in Asia.
   There is no personal income tax, and education and healthcare are free. Houses, cars and even pilgrimages to Mecca are subsidized.
   Hassanal’s Malay Muslim absolute monarchy dates back to the 14th century when his ancestors nominally controlled all of Borneo island and some parts of the Philippines’ Sulu islands, according to official history.
   Thousands of people, including school children waving flags, lined the streets to watch the sultan’s cavalcade as he arrived at a city stadium for a ceremony earlier on Saturday.
   ‘In Brunei, all men like the Sultan,’ Mohammad Akram Hossain, 34, said smiling beside the roadside earlier Saturday while he waited for the monarch’s Rolls-Royce.
   ‘Every year I come,’ said Hossain, a Bangladeshi and 10-year Brunei resident who said he runs a construction firm. He is one of tens of thousands of foreigners working in the country.
   ‘I’m very happy,’ he said.
   Hassanal was welcomed with a 21-gun cannon salute at the stadium, watched over by his goateed image displayed on surrounding buildings as tourists and locals not invited to the ceremony peered through the stadium gates.
   Wearing a pillbox hat and military dress tunic bearing several medals, he walked onto the field under a parasol to inspect a military honour guard to the sound of bagpipes.
   A fly-past of military turboprop aircraft and attack helicopters ended the ceremony.
   The sultan’s celebration was to continue into the evening with a state banquet attended by the leaders of the Philippines, Singapore, Thailand and Cambodia—and about 10,000 other guests, a government spokesman said.
   The sultan was crowned on August 1, 1968 and Brunei achieved full independence from Britain on January 1, 1984.
   In its report on human rights practices in Brunei released in March, the US State Department said the sultan ‘governed under emergency powers that place few limits on his power.’

US business groups, worried that a Vietnam trade deal will be delayed by election year politics, are pushing for votes in Congress before the August recess or soon afterward.
   ‘If this thing gets bogged down in the fall and we have to wait until next session, US business and US agriculture loses,’ Brad Figel, global director of government and public affairs for sportswear company Nike Inc, told reporters on Thursday.
   Vietnam, the fastest-growing economy in Southeast Asia, has agreed to cut agricultural and industrial tariffs and to open up more than 100 services sectors including banking, insurance, and telecommunications as part of a deal with the United States to join the World Trade Organization.
   As its part of the bargain, the United States must approve ‘permanent normal trade relations’ with Hanoi.
   Vietnam, like others on the dwindling list of communist countries, is subject to a Cold War provision known as Jackson-Vanik, which ties US trade relations to emigration and other human rights concerns.
   ‘Very simply, we have to repeal the Jackson-Vanik amendment in order to get the benefits,’ said Scott Miller, director of global trade policy for consumer products company Procter & Gamble Co.
   Unlike most trade bills, the Vietnam PNTR legislation can be amended, creating the possibility it could become a vehicle for a variety of amendments.
   Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, wants a deal to limit the number of amendments before beginning action on the bill.
   Meanwhile, House Republicans have been reluctant to vote on Vietnam until other less popular trade pacts with Oman and Peru are approved.

A San Francisco real estate developer on Friday sued several newspaper publishers in an attempt to block McClatchy Co. from selling three Bay Area papers it acquired when it bought Knight Ridder Inc.
   Clinton Reilly filed an antitrust lawsuit against MediaNews Group, Hearst Corp., Gannett Co. Inc. and Stephens Media Group in the U.S. District Court in San Francisco.
   McClatchy plans to sell the papers — the San Jose Mercury News, Contra Costa Times and Monterey Herald — as part of a $1 billion deal that would place them in the California Newspaper Partnership, which privately held MediaNews controls.
   Gannett and Stephens also own stakes in the partnership.
   According to Reilly’s lawsuit, the sales would harm readers and advertisers because they would eliminate newspaper competition in the area around San Francisco Bay.
   ‘The prices will probably go up for subscriptions. Certainly advertising rates will go up,’ Reilly’s lawyer, Joseph Alioto, told Reuters.
   ‘They’ll probably make attempts to shut down production facilities and use one. Probably the same with regard to distribution and with reporters and editors.’
   MediaNews plans to buy the San Jose Mercury News and Contra Costa Times from McClatchy with financial backing from the other publishers.
   Separately, privately held Hearst plans to buy the Monterey Herald and St. Paul Pioneer Press in Minne-
   sota from McClatchy, and transfer them to MediaNews in exchange for a stake in that company’s papers outside the Bay Area.

Daffodil International University has become the sponsor of the 9th International Conference on Quality Engineering in Software Technology, CONQUEST 2006, to be held at Berlin, Germany on September 27-29. Information are available on the web address :http: // www.isqi. org/isqi/eng/conf/conguest/2OO6/
   The CONQUEST 2006 is organised by ASQF GmbH and supported by the Technical University Berlin, Fraun- hofer FOKUS, GI TAV and the GI Joint Interest Group Modeling.

The price of crude oil enjoyed a record-breaking run higher this week beyond 78 dollars per barrel, while many other commodities were lifted by escalating violence in the Middle East.
   Gold climbed alongside other precious metals, owing to their safe-haven status which traditionally offers price support during times of geopolitical instability.
   Israel began pounding Lebanon on Wednesday in relentless attacks that have killed about 60 people and left world powers scrambling to avert all-out war in the region.
   Investors have also seized other geopolitical flashpoints, ranging from the Iranian nuclear energy standoff, North Korea’s controversial missile tests and ongoing unrest in Nigeria, Afghanistan and Iraq.
   ‘The traders have got so much to get their teeth into they don’t know which way to turn,’ said Investec analyst Bruce Evers, adding: ‘When it rains it pours.’
   On Friday, the Commodities Research Bureau’s index of 17 commodities stood at 358 points—a two-month high point—from 352.95 points
   GOLD: Gold prices jumped above 666 dollars per ounce owing to the simmering confrontation between Israel and Lebanon.
   The crisis was triggered when Hezbollah guerrillas seized two Israeli servicemen in a deadly attack on the volatile Lebanon-Israel border Wednesday, leading to Israel’s first ground incursion since it withdrew in 2000.
   ‘Violence in the Middle East and the knock-on effect on the oil market was the major catalyst for the gold market... as investors, traders and funds sought the metal’s safe-haven qualities,’ said James Moore, analyst for specialist website TheBullionDesk.com.
   Silver: Silver prices advanced. ‘Silver was quick to rally as traders took notice of the gains in both gold and the base metals,’ Moore added. The price of silver reached 11.83 dollars
   Palladium And Platinum: On the London Platinum and Palladium Market, platinum increased to 1,252 dollars per ounce. Palladium rose to 328 dollars per ounce on Friday.
   Base metals: (Three-months) Copper prices on the LME jumped to 8,120 dollars per tonne.
   Aluminium prices gained to 2,636 dollars per tonne.
   Nickel prices soared to 26,250 dollars per tonne.
   Lead prices rose to 1,155 dollars per tonne.
   Zinc prices advanced to 3,525 dollars per tonne.
   Tin prices increased to 8,810 dollars per tonne
   OIL: World crude prices surged to historic records above 78 dollars per barrel, owing to escalating violence in the Middle East, which added to fragile geopolitical tensions around the world.
   Crude futures began striking fresh historical peaks on Thursday, beating all-time highs recorded on July 7 on the back of geopolitical concerns over major crude producer Iran and missile tests carried out by North Korea.
   Developments in Israel, Lebanon and North Korea—which are not oil producing nations—have rocked world crude markets because they have led to heightened global tensions. Some analysts said oil looked set to break 80 dollars soon, while 100 dollars was being mentioned as a distant possibility.
   Iran meanwhile continued its defiance of Western efforts to curb its nuclear research programme, with President Mahmoud Ahmadinejad warning on Thursday that Tehran could halt UN inspections and quit the nuclear Non-Proliferation Treaty.
   His threat came after world powers referred the crisis over Iran’s disputed nuclear drive back to the Security Council, raising the possibility of sanctions.
   There are concerns Iran could retaliate by cutting oil output or even by blocking the strategic Strait of Hormuz, gateway for much of the Middle East’s oil output.
   Adjusted for inflation,
   current oil prices remain below levels reached after the 1979 Iranian revolution of about 85 dollars in today’s money.
   At about 1600 GMT on Friday in New York, a barrel of crude for delivery in August rocketed to 77.80 dollars per barrel from 75.20 dollars the previous week.
   Sugar: The price of a tonne of white sugar for October delivery fell to 475 dollars, from 483 dollars a week earlier.
   Grains And Soya: On the Chicago Board of Trade, the price of wheat for September delivery eased to 3.98 US dollars per bushel on Friday Maize for September delivery gained to 2.60 dollars per bushel. On the LIFFE, the price of a tonne of wheat for November delivery increased to 77.90 pounds on Friday, from 76.75 pounds.

Dollar continued its rise against other major currencies on Friday despite a surprise drop in US retail sales last month as violence continued to roil the Middle East.
   Some traders said investors were buying dollars as asafe haven bet as geopolitical fears mount amid the widening conflict in the Middle East.
   Israel on Friday continued its wide-ranging military offensive against Lebanon as Hezbollah guerrillas fired rockets into northern Israel.
   The euro declined to 1.2651 dollars at 2100 GMT from 1.2691 dollars late in New York on Thursday.
   The US currency meanwhile climbed to 116.15 yen from 115.37 yen late on Thursday, and also notched up gains against the British pound and Swiss franc.
   ‘The US dollar rallied over the course of the week,’ said Mark Chandler, a currency analyst at the Scotiabank Group.
   ‘The notion that geopolitical tensions were boosting safe-haven flows into the US dollar may explain some of the strength,’ Chandler said.
   The dollar had gained earlier in the week on better US trade data, but Friday’s economic news was disappointing as the Commerce Department said retail sales fell by an unexpected 0.1 per cent last month.
   It marked the first decline in retail sales since February, with sales largely dragged down by a decline in auto sales.
   The auto sector registered a drop in sales of 1.4 per cent in June following a decline of 2.1 per cent in the prior month despite auto maker sales incentives.

Russia and the United States have so far failed to seal a deal enabling Moscow to join the WTO but are continuing the negotiate an accord, US President George W. Bush said here Saturday.
   ‘We want Russian accession to the WTO and we will continue negotiating,’ Bush said at a joint public appearance with Russian President Vladimir Putin, saying of the elusive agreement: ‘It’s almost reached.’
   Bush was speaking here ahead of the opening later Saturday of a full Group of Eight summit, where Russian authorities had hoped an accord on WTO accession might be announced.
   Bush reiterated that the United States wanted to see Russia in the Geneva-based arbiter of world trade rules.
   But he stressed that any deal reached with Moscow ‘must be acceptable to the United States Congress.’
   Earlier Russian chief negotiator Maxim Medvedkok said ‘the protocol will be signed neither today nor within the coming weeks,’ Interfax news agency reported.
   But US Trade Representative Susan Schwab said the parties had made ‘a lot of progress,’ adding that agreement was ‘a question of weeks.’
   Russia has already signed bilateral agreements with its other key trading partners and now needs a green light from the United States to join the 149-member Geneva-based WTO, which sets global rules.
   Russia is today the only major power operating outside the WTO. Agreement on its membership here would constitute a major summit success for Putin and serve to confirm Russia’s rising stature as a global commercial and economic powerhouse.
   Russian press reports Saturday said the main stumbling block was Washington’s insistence on an easing in Russian health regulations, which some of its trading partners suspect are applied in order to justify politically motivated embargos.
   But the United States has also been pressing for Russian guarantees on the opening of the country’s financial sector to foreign participants and for a reduction in agricultural subsidies.

Japanese media welcomed Saturday the Bank of Japan’s decision to end an era of zero interest rates and expressed hopes the central bank would carefully manage the economy.
   ‘It was a natural decision amid sustained economic recovery as consumer prices show a steady year-on-year rise,’ the influential Nihon Keizai Shimbun business daily said in an editorial.
   Without the rate rise, Japan risked overheating of capital investment and a continuing rise in consumer prices, while giving unfair support to the banking sector, it said.
   ‘All in all, the decision was only reasonable and it was necessary to restart interest rate functions as the economy becomes healthier,’ it said.
   The central bank on Friday decided to raise the key overnight call rate target by a quarter point to 0.25 per cent, marking a return to a more normal monetary policy.
   Because the Japanese economy has been ‘sick’ for a while, the patient requires careful monitoring of its health as it recuperates, the Yomiuri Shimbun said in an editorial.
   ‘What is most important is maintaining the health of the Japanese economy, which has just managed to rise from its sickbed after a protracted illness,’ it said.
   The Bank of Japan first adopted the zero-rate policy in February 1999 to try to stop Asia’s largest economy from falling into a deflationary spiral.
   The bank temporarily increased its overnight call rate to 0.25 per cent from zero per cent in August 2000, when it believed the economy was recovering.
   But the economy quickly reversed course and the bank was forced to drop the rate back to zero in March 2001 when it also introduced its unprecedented quantitative easing monetary policy.
   The economy finally pulled itself out of lingering deflation, and the bank ended the policy of quantitative easing in March, followed by Friday’s rate hike decision.
   Major media cautioned that private banks might use the rate hike as an excuse to sharply raise the cost of borrowing for consumers.
   They also warned that central bank governor Toshihiko Fukui must do his utmost to regain public trust after his reputation was tarnished by his association with a scandal-tainted investment fund.
   But the rate hike decision, proposed by Fukui, should be regarded as ‘the first step toward normalizing the economy,’ the influential liberal Asahi Shimbun newspaper said.
   Japan had to rely on the unusual zero rate policy because of years of a sluggish economy, weighed down by an ailing financial sector with massive bad loans, the Asahi said.

China, which has been accused of trafficking in organs harvested from executed prisoners, will ban the sale of human body parts and related commercial activities from August 1, state media reported on Saturday.
   According to the new regulation, ‘no organization or individual is allowed to accept body donations except medical institutes, medical schools, medical research institutes and forensic research institutes,’ Xinhua news agency said.
   Transport of bodies to and from China would have to be approved by the civil affairs departments, customs and quarantine authorities, it said.
   At the beginning of July, the first law concerning the donation of organs and the conduct of transplant operations came into effect in order to regulate a sector which had become a lucrative but chaotic industry in recent years.
   A dire shortage of donated organs has fueled what critics inside and outside China say is a rampant black market.
   The underground industry meets demand not only domestically but from patients overseas.
   To meet the rising demand, hospitals have been regularly accused of secretly taking organs from road accident victims and other dead patients without telling family members.
   Sometimes hospitals buy organs from the deceased person’s family, but it is rare for families to consent as they traditionally want to keep the body intact.
   Organs of executed prisoners are also harvested and sold to hospitals without consent, according to human rights groups and media reports.

The chief executive of Renault SA and Nissan Motor Corp. reassured the Detroit auto world Friday that his companies have no intention of taking over General Motors Corp., the world’s biggest automaker.
   Carlos Ghosn also made his strongest statement yet that he wasn’t interested in running GM and that he was committed to his present responsibilities.
   ‘We are not making a bid for General Motors, and we don’t want to do it,’ Ghosn told reporters ahead of a scheduled meeting with GM Chairman and Chief Executive Rick Wagoner. ‘We are not trying to acquire anything; we are trying to partner with other people, which is a different story.’
   Ghosn and Wagoner had not spoken in person in the two weeks since billionaire investor Kirk Kerkorian disclosed his proposal to have GM join Nissan and Renault’s alliance. Their meeting was scheduled for Friday evening.
   ‘The companies agreed to cooperate in an expeditious, confidential review of the potential benefits of such an alliance to each company and the feasibility of achieving them,’ GM, Renault and Nissan said in a joint statement released late Friday.
   The statement said the review is expected to take about 90 days and that the companies will then consider whether more study of an alliance is warranted. Wagoner and Ghosn said in the statement that they will not offer any more public comments about the matter at this time so their teams can work on the review ‘without distraction.’
   Earlier Friday, Ghosn brushed aside comparisons between the proposed alliance with GM and the 1998 linking of Chrysler Corp. and Daimler-Benz AG.

Second-quarter results this week from several newspaper companies included a now-common litany of woes — sluggish advertising, declining circulation and rising newsprint costs. But a small ray of hope emerged as growth in online advertising, while still a small portion of revenues, looks to be picking up speed.
   For one publisher in particular — Chicago-based Tribune Co. — the prospect of increased Web-related sales couldn’t come at a better time. Its declining profits and revenues could provide more ammunition to the restless Chandler family, the former owners of the Los Angeles Times and now the company’s largest shareholder.
   Following the forced sale of Knight Ridder Inc. to McClatchy Co. earlier this year under shareholder pressure, the Chandlers have been pressing for radical action such as a breakup to boost Tribune’s long-lagging share price.
   With a contested share buyback plan now complete, the pressure is on Tribune, the nation’s No. 3 newspaper company by circulation, to continue with measures it promised to revamp its businesses, including selling some $500 million in noncore assets and cutting $200 million in costs within two years.
   The latest indication of those cost cuts came Friday as Tribune’s flagship paper, the Chicago Tribune, confirmed that it would eliminate about 120 jobs, or about 4 per cent of its work force, by the end of the year. The cuts were reported in Friday editions of the newspaper.
   So far, investors have been backing Tribune’s board and management, but they have made clear that they want to see more action to lift the stock, which now trades about 40 per cent below where it was early in 2004. John P. Miller, portfolio manager with Ariel Capital Management LLC, a Tribune shareholder, said he hoped to see more results within the next six months or so.
   While Miller, the Chandlers and others say the sum of Tribune’s parts is worth more than the current value of the whole, some disagree, pointing to declining valuations for both newspapers and broadcasting properties.
   Deutsche Bank analyst Paul Ginocchio said in a note to investors that most breakup or buyout scenarios would value the company between $25 and $32 a share — below where Tribune’s shares have been trading recently. On Friday, the shares fell 35 cents, or 1.1 per cent, to close at $31.15 on the New York Stock Exchange.
   Tribune said its online revenue grew 27 per cent in the second quarter, and CEO Dennis FitzSimons told an investor conference last month that Tribune hopes to see online advertising make up between 12 and 15 per cent of newspaper revenues by 2010, up from about 6 per cent this year.
   Other major newspaper publishers reporting this week, including Gannett Co. and McClatchy, experienced similarly fast growth in online revenues. But many analysts remain skeptical about whether that growth will outpace the advertising lost to Internet-only destinations such as Yahoo and Craigslist, which get far more traffic than most newspaper sites.
   In hopes of stanching those losses, several newspaper publishers have been talking with Internet heavyweight Yahoo Inc about working more closely together in online classified advertising, particularly Yahoo’s popular HotJobs help-wanted service.
   Jody Lodovic, the president of MediaNews Group Inc., a privately held newspaper publisher based in Denver, said Friday that his company, Hearst Corp. and other publishers have been exploring ways to expand their cooperation with Yahoo, starting with help-wanted.

Russian riot police disrupted and diverted a rally by communist activists Saturday protesting against the summit of G8 world leaders in Saint Petersburg.
   Around 100 communists gathered in the centre of the former Tsarist capital despite a ban on any rallies during the summit, which ends Monday.
   Eventually they were allowed to march to a site four kilometres away but were refused permission to unfurl any banners or chant slogans.
   Riot police intervened when some of the activists tried to demonstrate on the street, causing scuffles which led to the arrest of at least five people.
   Among slogans which could be heard were ‘G8 outlaws’ and ‘world without G8, Russia without Putin.’

One of the ‘NatWest Three’ offered his shares in Scotland’s Celtic football club for bail Friday, as lawyers for the British bankers asked a US judge to allow their return to Britain pending trial on Enron-related fraud charges.
   An initial trial date was set for September 11.
   Gary Mulgrew had just 20,000 dollars in cash to pre- sent as bail Friday as his lawyers argued that the British banker who turned himself in voluntarily for extradition on Thursday did not pose a flight risk.
   In order to match the 100,000 dollars in cash offered by fellow accused David Bermingham and Giles Darby, Mulgrew’s lawyer offered the shares in the Scottish football club.

Thousands of South Korean riot police stormed the headquarters of POSCO, the world’s fifth-largest steel producer, on Saturday to break up a sit-in by striking workers, witnesses and police said.
   Carrying shields and batons, some 7,000 police raided the 12-storey building in the southeastern port of Pohang which has been occupied by 1,500 workers since Thursday.
   Using fork-lift trucks and other cargo-lifting vehicles, the police removed iron barricades at the gates of the site and barged their way into the building.
   Eight fire-engines and five ambulances were on stand-by as a helicopter hovered overhead.
   Some 100 workers were throwing plastic water bottles at the police, but there was no serious violence.

EMC cuts 2006 profit, revenue forecasts
EMC Corp, the world’s largest maker of corporate data-storage equipment, on Friday cut its 2006 financial forecasts, citing self-inflicted problems gauging demand, and its shares fell 3.7 per cent. EMC trimmed its full-year net income outlook to about 51 cents a share on revenue of more than $10.8 billion. The company had previously forecast per-share earnings of 54 cents to 57 cents on revenue of $11.1 billion to $11.3 billion.
— Reuters

Indonesian paper co denies charges of destroying forests
Asia Pulp and Paper, one of the world’s largest paper companies, Saturday denied accusations that it was failing to live up to pledges to protect some of Indonesia’s most important remaining forests. In a statement, Asia Pulp and Paper (APP) said it was preserving a number of crucial forest areas in Riau and Jambi provinces on Sumatra island where it manages forest concessions. ‘APP currently manages over 400,000 hectares of set-aside areas for conservation, community use and indigenous-species protection and preservation in Riau and Jambi province,’ the statement added. In a report released earlier this week, environmental group WWF Indonesia said the company had been responsible for the loss of about 80,000 hectares (200,000 acres) of natural forest every year, despite commitments made to its buyers to preserve the last of Sumatra’s forests. Nearly one-fifth, or 520,000 hectares, of the natural forests left on Riau’s mainland, which were under APP’s control as of 2005, were under threat said WWF. WWF estimated that around 450,000 hectares of forest have been cleared over the past five years to supply APP’s pulp mill in Riau alone.
— AFP