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The Bangladesh Bank governor, Salehuddin Ahmed, on Saturday laid emphasis on improving banking service and providing greater access for the small and medium enterprises to bank funds.
   He said that many private banks in Bangladesh have well-decorated, lavish offices, but clients have to wait for hours to encash a cheque or get required service.
   ‘Banking service of the local banks are not up to the mark and the foreign banks are taking the advantage,’ the governor said at the inaugural session of the workshop on ‘Challenge in banking sector in 21st century: Bangladesh context’ organised by the Bangladesh Economic Association.
   ‘As the BASEL-II is knocking at the door, it will be difficult for many banks to continue without improvement of service and management after the implementation of new international standard,’ he added.
   He said that the bankers have to increase their corporate social responsibility and service quality by giving less stress on outside displays.
   The governor slated the banks for not providing adequate finance to the small and medium enterprises.
   ‘Banks are interested to provide large loans and syndication loans,’ he added.
   Salehuddin was of the view that employment generating sectors like SMEs should get more bank credit no matter how small or large the loan portfolios are.
   The governor also said that reduced interest rate would not guarantee increase in production in manufacturing sector as there are some other non-economic factors that can increase cost of production.
   ‘I have asked FBCCI to look at other factors responsible for increasing the cost of doing business,’ he added.
   ‘Credit which is being given to private sector this time is not small... Rather the bankers should consider portfolio and quality of the projects before issuing loans,’ Salehuddin said.
   The BEA president, Qazi Kholiquzzaman Ahmad, also the session chair, said that in the name of free market economy everything could not go beyond rules and regulations.
   ‘The foreign banks are doing very good business in Bangladesh, but they care little about corporate social responsibility,’ he added.
   The economist also laid importance on human resource development.
   The general secretary of the association, Abul Barkat, in his welcome address identified four problems of the country’s banking sector.
   ‘The banks are supply-driven and concentrate more on commerce than production,’ he added.
   He also said that high interest rate is a major challenge for the growth of Bangladesh’s industrialisation.
   He emphasised strengthening monitoring in the banking sector.
   Economists Ashrafuddin Chowdhury and Toufiq Ahmed Chowdhury also spoke in the session.

Pointing to huge potentials, the visiting Chilean minister Carlos Eduardo Mena on Saturday emphasised on enhanced trade and investment relations between Bangladesh and his country.
   Meeting Dhaka’s business leaders at the Federation of the Bangladesh Chambers of Commerce and Industry in the city, the Chile’s vice-minister of economy said Bangladeshis could use his country as the ‘springboard to conquer markets of other Latin American countries and secure easier access to that in the US and Canada.
   ‘Bangladesh can bring our raw materials, process here and again send it to America through Chile,’ said Mena, whose country abounds with minerals, forest and agricultural resources.
   He said Chile having a strong research industry can help Bangladesh in advancement of science and technology and industries including pharmaceuticals while textiles, jute goods, ceramics, paper and agro-processing, software and metals especially copper-based industries could be facilitated by bilateral cooperation.
   Mena, who is also the vice-president of his country’s foreign investment approving committee, urged the Bangladeshi businessmen to think for setting up garment industries in Chile employing Bangladeshi workers and export garment to American markets, taking advantage of Chile’s preferential trade access agreements.
   He urged for immediate bilateral agreement between the two countries’ governments and business bodies for boosting trade and investment. They had already made this with China, he added.
   Bangladeshi businessmen in the meeting chaired by federation president Mir Nasir Hossain got enthusiastic with the inviting presentation the Chilean minister made before them.
   Nasir invited a Chilean business delegation in Bangladesh and stressed further discussion on bilateral business potentials.
   In the fiscal 2004-2005 Bangladesh exported $2.8 million worth products including garment, jute goods, leather, ceramic tableware and engineering goods while imported $12 million worth of food stuffs, tobaccos and base metals including copper.
   Asif A Chowdhury, honorary consul of Chile, also spoke on the occasion.

Shwe Gas Movement (SGM), a Burmese organisation, on Saturday urged the international oil and gas companies not to work with the military regime in Myanmar.
   ‘We urge all the IOCs to refrain from dealing with the present regime until a democratic government is established in Burma,’ said Soe Lunn, the head of the Bangladesh chapter of the Shwe Gas Movement, while addressing a press conference at the National Press Club in Dhaka.
   Some expatriate Burmese nationals living in Bangladesh are members of SGM Bangladesh chapter while the organisation has wings in Thailand and India. The military regime does not allow the SGM to operate in Myanmar.
   The SGM leaders at the press conference alleged that the present military regime in Myanmar is smuggling out the country’s gas resources in the name export to neighbouring countries like China, Thailand and India.
   The military government earns between $580-824 million per annum from the gas export and this fund, SGM alleged, is being spent for the development of military while people in Burma are living in a very poor condition.
   ‘Most of the people in Burma are very poor and they don’t get any access to gas or electricity although the country has huge natural resources,’ said Soe Lunn.
   ‘We have got the largest gas reserve in South Asia which is worth $12-17 billion,’ he said adding, natural gas is locally called ‘shwe’ which means gold.
   He claimed the military regime in Myanmar wants to perpetrate its rule and that is why they are spending money for the development of the military.
   Professor CR Abrar of Dhaka University and some Bangladeshis of Rakhaine community were also resent at the press conference.

Fidel Castro and Venezuelan President Hugo Chavez rallied thousands of leftist sympathizers after a South American trade summit in Argentina, railing against US-backed free market policies they blame for many of Latin America’s woes.
   Addressing 15,000 people, Castro praised Venezuela’s entry into Mercosur, a move that gave the South American trade bloc a hard push to the left.
   ‘Ole! Ole! Fidel!’ the crowd chanted Friday night, as some waved red flags emblazoned with the image of Argentine-born Ernesto ‘Che’ Guevara, who spent several boyhood years in Cordoba before joining Cuba’s revolution.
   ‘Mercosur once was just four countries. Now it is improved and is expanding,’ Castro declared on a stage beneath a banner reading ‘integration is our flag.’ Flags of Cuba, Venezuela and Argentina flapped nearby.
   Leftist labour, student and jobless protest groups took part in the rally, a rare chance for Argentines to see the 79-year-old Cuban leader, who last visited in May 2003 for the inauguration of moderate leftist President Nestor Kirchner.
   Also present were leaders of the Mothers of the Plaza de Mayo, the famously kerchiefed human rights activists whose sons and daughters disappeared during Argentina’s 1976-83 dictatorship.
   Castro vowed his communist nation would continue to survive a more than four-decade-old US trade embargo.
   He added that ‘in the neoliberal world everyone is talking about globalization, about the globalization of goods and services. But nobody is talking about the globalization of solidarity’ among nations.
   He lauded Chavez for emulating Cuba’s programmes to send doctors to Latin America’s poor with free medical care and train teachers to boost literacy in a struggling region.
   Earlier Friday, Kirchner welcomed the addition of oil-rich Venezuela, the continent’s No. 3 economy after Brazil and Argentina, into the once-sleepy customs union.
   Chavez, who openly admires Castro as his leftist ally and political mentor, urged Mercosur to put aside internal squabbles and stand against the US-backed free-market policies he says have enslaved the region.
   He said a Free Trade Area of the Americas, A US-backed proposal blocked by Venezuela and the Mercosur nations last year, was ‘dead.’
   Chavez said Mercosur would be the engine for Latin American growth, adding he hoped Bolivia, whose leftist President Evo Morales took office in January, and Cuba might one day become full members of the trade bloc.
   The addition of Venezuela gives Mercosur a combined market of 250 million people and a combined output of $1 trillion in goods and services annually, said Brazilian President Luiz Inacio Lula da Silva during Friday’s summit. The other members are Paraguay and Uruguay.
   NAFTA, combining the markets of the United States, Canada and Mexico, has 450 million consumers and a combined gross product of about $14 trillion.
   Michael Shifter, an analyst at the Inter-American Dialogue in Washington, said Venezuela’s entry should be a ‘wake-up call’ for US officials distracted by conflict in the Middle East.
   ‘Mercosur seems to have less and less to do with free trade and more to do with politics,’ he said.

Five of the world’s largest energy companies are expected to report combined second-quarter profits next week of more than $30 billion, a bounty fuelled by worldwide economic growth and political instability that helped keep oil above $70 a barrel.
   The oil industry is braced for a backlash in Washington, where elected officials are concerned about constituents in many parts of the country paying more than $3 a gallon at the pump. But some analysts say companies could face less criticism than usual given the attention focused on Middle East violence.
   Whatever the political fallout, the industry has done right by Wall Street’s standards. The five oil behemoths releasing quarterly results next week — BP PLC, ConocoPhillips, Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC — earned an estimated $33.6 billion, or 32 per cent more than a year earlier, according to analysts surveyed by Thomson Financial.
   World oil prices that rose 33 per cent, on average, helped drive the earnings growth. On Friday, US-benchmark crude-oil futures were above $74 a barrel as traders nervously eyed an expected Israeli ground invasion of southern Lebanon. The market fears that the fighting could draw Iran, a key oil producer and supporter of Hezbollah, into the conflict.
   BP PLC will be the first major oil company to report second-quarter results. The London-based company is expected to reveal Tuesday the weakest year-on-year performance among its peers, weighed down by the loss of output from a massive offshore platform damaged by last summer’s hurricanes, and lost production and repair costs associated with a deadly explosion last year at a Texas refinery.
   Even so, BP could post net income of $6.3 billion, or 11 per cent more than a year earlier, analysts say — showing just how effective soaring oil and gasoline prices can be at masking operational difficulties.
   Energy consumers deserve credit too; the industry benefited from a global fuel appetite that just wouldn’t quit. The International Energy Agency estimates that world oil demand averaged 82.4 million barrels per day in the second quarter, or 1.5 per cent above the prior year, generating more than $500 billion for petroleum producers. That’s roughly equivalent to the annual gross domestic product of South Africa.
   Of course, the cash register rings more than once for integrated oil companies, and refining crude oil into gasoline, diesel and heating oil turned out to be a blockbuster business segment for them this spring.
   The average profit margin from refining was $19.10 per barrel of crude, or 60 per cent higher than a year ago, according to J.P. Morgan. Independent refiners such as Valero Energy Corp. and Tesoro Corp., which report their second quarter results in early August, were the greatest beneficiaries of this trend.
   One slight drag on the integrated oil industry’s performance was a year-on-year decline in average US natural gas prices, which have continued to slump into the third quarter because of record US inventories following a mild winter.
   Going forward, the oil majors’ profit growth could face stronger headwinds, said John Parry, senior equity analyst at John S. Herold.
   Looking beyond summer and the threat of hurricanes, Parry sees oil prices flattening out and then tailing off toward the end of 2006, especially if economic growth continues to slow.

Computer hackers built a fake Google Tool Bar website to trick people into downloading a malicious program that could turn machines into ‘zombies,’ a US Internet security firm said on Friday.
   E-mails containing Internet links to the bogus website and invitations to download Google tool bar software began circulating this week, according to SurfControl of northern California.
   The phony website was a replica of the real one provided by the Internet search juggernaut based in Mountain View, California, SurfControl said.
   Instead of the promised tool bar software, the site duped people into downloading a ‘Trojan,’ malicious computer coding hidden inside a seemingly harmless offering, according to SurfControl.
   The ‘malware’ was designed to let hackers take control of infected computers via the Internet, SurfControl said.
   Computer users were advised to avoid the fake site and protect their machines with updated anti-virus programs that scan downloads for viruses.
   Google did not respond to an AFP request for comment on Friday.

Sri Lanka’s Central Bank raised its key short-term interest rates Saturday in a bid to check galloping inflation fuelled by high oil prices.
   ‘The Repurchase (Repo) rate and the Reverse Repurchase (Reverse Repo) rate goes up by 12.5 basis points to 9.125 per cent and 10.625 per cent,’ the bank said in a statement following its monthly review of the economy.
   The repo rate, or the interest paid by the Central Bank for deposits, is now at a three-and-a-half-year high. The Reverse Repo is the rate at which the Central Bank lends to commercial banks.
   ‘The rise in fuel prices remains a concern in overall macroeconomic management,’ said the bank which also cited demand pressures in the economy for the rate increases.

The industries minister, Matiur Rahman Nizami, Saturday called upon the officials concerned to motivate the sugarcane farmers to cultivate the high yielding varieties by using the latest technology for maximum production.
   ‘One fourth of the total sugar demand can be met, if the sugar mills can crush sugarcane throughout the season,’ he said adding that it would help the government financially.
   The minister made the call while inaugurating a two- week foundation course for the newly appointed field level officers of Bangladesh Sugar and Food Industries Corporation (BSFIC) at the Regional Public Administration Centre here.
   Nizami said the sugar mills have appeared to be profitable this year on the back of some positive steps taken by the government.
   ‘These steps are purchasing sugarcane on cash payment, increasing price of sugarcane in three stages, stopping harassment in purchasing sugarcane and providing subsidy to the farmers in sugarcane plantation,’ he said.
   To make these steps fruitful, Nizami asked the field-level officials to establish a good relation with the farmers to get adequate supply of sugarcane during the crushing season.
   Industries secretary M Nurul Amin and BPATC rector Abdus Salam Khan, among others, also spoke on the occasion with BSFIC chairman Kazi Aminul Islam in the chair.

China will speed up lowering tariffs on products from the Association of Southeast Asian Nations (ASEAN) member countries in the coming five years, Commerce Minister Bo Xilai said on Friday.
   ‘The average tariff rate on products originating from ASEAN (countries) will be lowered to 6.6 per cent by 2007 and 2.4 per cent by 2009,’ Bo said. ‘By 2010, China will remove tariffs on 93 per cent of the goods from the ASEAN countries.’
   The tariff reduction is part of the free trade agreement (FTA) progress between the two economies. So far, China has lowered its average tariff rate on ASEAN goods to 8.1 per cent from 9.9 per cent last year.
   Bo said ASEAN countries would also cut their tariffs on goods from China. For example, Thailand is scheduled to implement a zero tariff on more than 90 per cent of Chinese goods.

The US government said Friday it had achieved ‘solid progress’ in a second round of free-trade talks with Malaysia this week.
   It said the two sides would exchange texts outlining the framework of a free-trade agreement by the end of August, in their bid to forge a pact by the end of the year.
   ‘The United States and Malaysia made solid progress in the second round of FTA negotiations held this week at George Washington University in Washington, DC,’ the office of the US Trade Representative (USTR) said in a statement.
   ‘The United States was encouraged by the results of this round and is optimistic that we will be able to conclude a
   strong agreement that achieves
   a balance of interests and
   benefits businesses, farmers, ranchers and workers in both the United States and Malaysia,’ it said.
   The United States hopes to fast-track the negotiations with its 10th largest trading partner and pass the deal well before June next year, when Congress will regain the right to amend any trade pact.
   One of the most politically sensitive areas includes Malaysian government procurement, which sees lucrative contracts awarded to the country’s majority community of ethnic Malays as part of a system of positive discrimination.
   Washington has also flagged Malaysia’s protected auto industry and its financial sector as areas of concern, while the Southeast Asian nation wants to win more US access for its textiles, clothes and electrical products.
   A third round of talks is scheduled to take place in Malaysia in September.

Thailand’s airport authority said Friday a separate terminal for low-cost airlines will be built at the new Bangkok international airport at a cost of 600 million baht ($15.8m).
   Chotisak Asapaviriya, president of Airports of Thailand Plc, said construction of the low-cost terminal should be completed within 16 months of the project’s approval.
   ‘The design of the new terminal is completed and the plan will be proposed to the board for approval next month,’ he told AFP.
   The move is designed to compete with dedicated budget terminals that opened earlier this year in Kuala Lumpur and Singapore, and to ease concerns among low-cost carriers about increased operating expenses at the new Suvarnabhumi Airport.

Rangs Electronics Limited, widely known as ‘Sony-Rangs,’ arranged a programme for
   raffle draw for sales campaign titled ‘BAZIMAT OFFER’ for the World Cup 2006 at the National Press Club auditorium on Saturday.
   Chairman and managing director of Rangs Group of Companies Aktar Hussain, executive director NTV Hasnain Khorshed, and Jakaria Pintu, captain, Sadhin Bangla Football Team jointly inaugurated the raffle draw programme.
   Winners' coupon numbers are 1st Prize : 11436, 30168, 2nd prize : 17022, 3rd prize : 33243, 4th prize : 50414, 5th prize : 30947 6th prize : 04048, 30774, 30245,18910, 7th prize : 33217, 21866, 05354, 29883, 19845, 32270, 18508, 42621, 10029, 25067, 16481, 20139, 32709, 26904, 50026, 28829, 10864, 30972, 25385, 33956, 37048, 43128, 03525, 04877, 08056, 8th prize : 41441, 26836, 08351, 20424, 19520, 08803, 22191, 19942, 26666, 30381, 9th prize 24042, 48664, 12389, 16414, 33817, 30607, 28405, 01234, 32495, 04309, 16757, 22302, 13149, 32494, 34006, 28371, 50095, 27202, 10121, 01087, 10th prize : 56349, 07702, 36963, 26920, 21624, 22628, 20755, 02152, 46559, 21615, 11393, 12453, 33165, 02536, 45367, 36942, 15408, 16365, 07635, 25412, 51637, 14767, 04068, 19185, 07837, 10990, 29537, 26533, 26687, 37783, 32776, 06479, 32337, 46059, 50307.

Attention smokers: Your world just got a little bit smaller. Now that a second major hotel chain, Marriott International Inc., announced on Wednesday that it would go smoke-free, analysts say they expect even more hotels to do the same.
   Marriott said it would implement the most significant ban in the industry so far at its hotels in the United States and Canada in September. With its move, it joins Starwood Hotels and Resorts Worldwide’s Westin properties, which was the first hotel chain to go smoke-free in December.
   Jeffrey Randall of A.G. Edwards & Sons Inc. said that before the move, Marriott had already designated 90 per cent of its rooms as nonsmoking in response to demand from guests.
   ‘That already speaks to a sea change in guest preferences,’ Randall said.
   Americans have responded to health concerns about smoking, and over the last 10 years, that has translated to a shrinking number of requests for smoking rooms, according to travel agent Mary Peters.
   ‘We can count on one hand the people who request smoking rooms,’ said Peters, who owns Friendly Travel American Express in Alexandria, Va. ‘We’re the ones who have to call when they come back and say they don’t want to stay at a particular hotel anymore because it smelled like smoke.’
   With Marriott’s move, the national no-smoking zone is growing ever larger. Smokers face fewer options as bars, restaurants and offices have been added to the patchwork of places across the country that are off limits for lighting up. And
   hotels that are responding to customer demand are adding to that trend.
   ‘It’s probably a precursor of what’s to come,’ said analyst William Crow of Raymond James & Associates. ‘Given where we are as a country, the no-smoking laws that have been put in place, we’ll probably see other chains jump on board.’
   Intercontinental Hotel Group said on Thursday that it is not currently planning to ban smoking in all rooms, but that it would certainly reconsider if customers said that’s what they want. Intercontinental owns and franchises hotels under brands such as Holiday Inn, Holiday Inn Express, Crowne Plaza Hotels & Resorts and Candlewood Suites. It currently keeps a minimum of 75 per cent of rooms as nonsmoking, company spokeswoman Virginia Osborne said.

The price of crude oil, in line with many other commodities, sank this week amid rising hopes that a resolution might be found to the latest upsurge in violence in the Middle East.
   On Friday, the Commodities Research Bureau’s index of 17 commodities stood at 338.79 points, compared with 358 points.
   GOLD: Gold prices ended in negative territory as concerns subsided over ongoing violence between Israel and Lebanon. The price of gold hit a two-month high of 676.53 dollars on Monday as concerns had soared over escalating violence in the Middle East, before falling back.
   That was far below a 26-year summit of 730.40 dollars set last May. The precious metal benefits from its safe-haven status in times in geopolitical instability. On the London Bullion Market, gold prices sank to 634 dollars per ounce at Friday’s late fixing, from 663.25 dollars a week earlier.
   SILVER: Silver prices slipped, following gold and copper lower.
   On the London Bullion Market, silver prices declined to 11.01 dollars per ounce at Friday’s fixing, from 11.63 dollars the previous week.
   PALLADIUM AND PLATINUM: The two sister metals also fell.
   On the London Platinum and Palladium Market, platinum decreased to 1,216 dollars per ounce at the late fixing Friday, from 1,252 dollars the previous week. Palladium fell to 308 dollars per ounce on Friday.
    BASE METALS: On Friday, three-month
   Copper prices on the LME fell to 7,465 dollars per tonne.
   Aluminium prices sank to 2,500 dollars per tonne.
   Nickel prices slid to 23,905 dollars per tonne.
   Lead prices dipped to 1,055 dollars per tonne.
    Zinc prices fell to 3,208 dollars per tonne.
   Tin prices decreased to 8,170 dollars per tonne.
   OIL: The price of London Brent crude hit a record high on Monday as violence escalated in the Middle East, but crude futures then plunged as those concerns subsided.
   Since striking record levels, oil prices have slumped in London and New York by about eight percent on hopes that the Israel-Lebanon crisis would neither spark a regional conflict nor involve major crude producer Iran.
   On Monday, Brent spiked to 78.18 dollars per barrel, while on July 14, light sweet crude had hit an all-time high of 78.40 dollars in New York.
   Both contracts have hit reverse gear since, touching low points of 72.59 dollars and 71.65 dollars respectively on Wednesday.
   SUGAR: Sugar prices also dropped as market sentiment faltered.
   On LIFFE, the price of a tonne of white sugar for October delivery decreased to 448 dollars, from 475 dollars a week earlier.
   On NYBot, the price of unrefined sugar for October delivery slid to 15.34 US cents per pound, from 16.32 cents.

The pound rose to six-week highs against the dollar on Friday following stronger-than-expected British growth figures, while strong French consumer spending data pushed the euro higher as well.
   The pound changed hands for 1.8589 dollars at 2100 GMT, up sharply from 1.8486 in New York late Thursday.
   The euro rose to 1.2696 dollars, compared with 1.2632 Thursday.
   The dollar fell to 116.14 yen from 116.90.
   New figures showed the British economy grew by 0.8 per cent in the second quarter from the first, above forecasts for a more moderate 0.7 per cent and the highest quarterly pace in two years.
   The data come after a sharp pick-up in inflation, strong retail sales and robust figures on the British housing market, increasing the likelihood that the Bank of England will raise interest rates in the months ahead.
   ‘Overall the GDP (gross domestic product) numbers represent yet another robust UK release this week and they underline our suspicions that interest rates will rise over the coming months,’ said Philip Shaw at Investec.
   ABN Amro currency analyst Tony Norfield reckoned that sterling was likely to be one of the currency trading stars in the near term.
   This was due in part to the higher chance of a British rate hike and also to the possibility that oil-producing countries could begin to diversify their currency reserves, he said.

Wall Street shares found some relief over the past week from reassuring comments on the economy by Fed chairman Ben Bernanke, but the technology sector continued to struggle.
   Analysts say Bernanke eased market concerns about an overaggressive central bank choking off economic growth. But the cooler economic outlook and news from key companies put the tech sector under pressure.
   In the week to Friday, the Dow Jones Industrial Average climbed 1.2 per cent to 10.868.38 and the broad-market Standard and Poor’s 500 added 0.33 per cent to 1,240.29.
   But the tech-dominated Nasdaq slid for the third consecutive week, dropping 0.83 per cent to 2,037.35, its weakest level since May 2005. The Dow is up a modest 1.41 per cent for the year, while the S and P is down a fractional 0.64 per cent. But the Nasdaq has slumped 8.4 per cent.
   Peter Cardillo, market strategist at SW Bach, said investors are struggling with a variety of factors, including rising Middle East violence, the outlook for interest rates and the wave of earnings reports being released.
   But he argued that despite the geopolitical issues, ‘the main concern is the economic outlook going forward.’
   Wall Street is hoping that Bernanke’s signals in congressional testimony over the past week mean the economy is cooling enough to take care of building inflationary pressures, giving the economy a ‘soft landing.’

Leaders of South America’s biggest trade grouping backed proposals Friday to establish a continent-wide free trade pact in a summit also attended by Cuban President Fidel Castro.
   The leaders of Mercosur members Brazil, Argentina, Uruguay, Paraguay and Venezuela reiterated their commitment to unify with the four-state Andean Community and other countries into the continent-wide South American Community free trade group.
   The group also endorsed Venezuela’s effort to join the United Nations Security Council as a non-permanent member.
   Venezuela was attending the meeting for the first time as a full member after quitting the Andean Community, which groups Ecuador, Bolivia, Colombia and Peru.
   Also attending were the leaders of Mercosur’s associate members, Michelle Bachelet of Chile and Evo Morales of Bolivia. Mexican Foreign Minister Ernesto Derbez was at the event as an observer.
   In their declaration the five endorsed the European Union-modeled South American Community announced in December 2004 at the South American summit. The group would join together Mercosur, the Andean Community and Chile, Guyana and Surinam.
   With its new member, Mercosur now has a total population of more than 250 million people, a gross regional product of over one trillion dollars and regional trade surpassing 300 billion dollars.
   Venezuela’s joining brought in the region’s biggest oil producer and exporter and only member of oil cartel OPEC.
   The summit in Cordoba, Argentina, was marked by the presence of Castro, who turns 80 next month, as a guest of Argentina President Nestor Kirchner.
   Castro signed a Complementary Economic Accord with the group which will benefit the island state in its trade with Mercosur countries.
   Summit host Kirchner warned his audience in his opening speech that the trade bloc’s integration must be about more than just economic growth.
   ‘We are not interested only in economic integration. We are not interested in a region of the world where integration is
   full of poverty, exclusion and unemployment,’ Kirchner
   said, referring to the sharp differences between strong economies such as Argentina, Venezuela
   and Brazil, and smaller economies such as Paraguay and Uruguay.
   Argentina, Brazil, Paraguay and Uruguay formed Mercosur in 1991 with the aim of creating a South American common market. Chile and Bolivia became associate members in 1996.

The US government rejected Friday a union bid to sanction China over its labour standards, but said it was well aware of serious abuses in the country’s booming factories.
   The office of the US Trade Representative (USTR) said the petition filed by the AFL-CIO, the umbrella US labour federation, for a ‘Section 301’ investigation into Chinese workers’ rights was inappropriate.
   Had the petition been upheld, it would have triggered a lengthy probe that could have resulted in US trade sanctions against China.
   ‘As we explained in April 2004 when we rejected a similar Section 301 petition on China’s labour practices, we do not need to conduct a year-long investigation to know that there are serious concerns with labour rights and working conditions in China,’ USTR spokesman Sean Spicer said.
   The US government will continue to press China to improve workers’ rights in its factories and workplaces, he said.
   ‘A Section 301 investigation will neither shed more light on this problem nor lead to a more effective approach for addressing Chinese workers’ rights and labour conditions.’
   China has drawn fierce criticism for its industrial safety record as employers chase profits over all else to stoke the country’s startling economic boom. The only union allowed is a federation affiliated to the Communist Party.
   The AFL-CIO, which is also aghast at the loss of hundreds of thousands of American jobs to China in recent years, called the USTR decision a ‘slap in the face’ to both Chinese and American workers.
   ‘In rejecting this petition, President Bush has shown once again that he is beholden to corporate interests at the expense of working families,’ AFL-CIO Secretary-Treasurer Richard Trumka said in a statement.
   ‘It’s a travesty that after five years of failed trade policy that have contributed to the loss of almost three million US manufacturing jobs and a record trade deficit of 726 billion dollars, the administration continues to take no meaningful action to support America’s workers or stop the abuse of workers in China.’
   In rejecting the AFL-CIO’s 2004 petition, the Bush administration said opening up the prospect of sanctions against Chinese labour standards would only end in ‘economic isolationism’.

Microsoft Corp said on Friday it plans to release a new music and entertainment player and accompanying software under the ‘Zune’ brand this year, in a belated attempt to challenge the dominance of Apple Computer Inc’ s iPod player.
   The announcement comes after weeks of rumors and speculation about such an offering. Microsoft has already touted the products to record companies.
   ‘Under the Zune brand, we will deliver a family of hard- ware and software products, the first of which will be avai- lable this year,’ said Chris Stephenson, general manager of market for entertainment and services at Microsoft, in an statement.
   ‘We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together.’
   The world’s largest software maker faces an uphill climb in closing the gap on Apple’s iPod media player and iTunes Music Store, the runaway leaders in their respective areas.
   The iPod holds more than half of the digital media player market, according to research company NPD, while iTunes accounts for over 70 per cent of US. digital music sales. In the United States, the iPod has more than 75 per cent of the digital music player market, according to NPD.
   ‘Creating a lifestyle device, Microsoft is clearly going to face a battle here,’ said Michael Gartenberg, research director at JupiterResearch. ‘It’s going to be hard for them to create the same level of cachet that Apple has with the iPod.’
   Music industry sources told Reuters earlier this month that Microsoft disclosed plans to be in the market before Christmas with a media player that will allow users to download videos and music wirelessly.

Despite record profits, US oil majors have built no new refineries on American soil for 30 years, raising the country’s dependence on foreign supplies and making it vulnerable to even small accidents and bad weather.
   Standing in Garyville, Louisiana, the Marathon Oil refinery is the most recently built refinery in the United States—and that was in 1976.
   Since then, the number of US refineries in operation has dropped by more than half, from more than 300 in the early 1980s to less than 150 today.
   And while these refineries’ capacities may have increased in recent years through the units’ expansion, they still fail to satisfy the voracious appetite of US car drivers and industry for oil.
   Further, the damage to refineries from hurricanes Katrina and Rita last summer has highlighted this bottleneck in the American oil industry.
   Since then, each minor accident or production gap caused by maintenance problems has led to jumps in gasoline (petrol) prices at the pump, and by extension crude oil prices.
   And following the recent introduction of new environmental standards for the makeup of gasoline, the US government ironically might contribute to the prospect of local shortages this summer.
   Such a state of affairs has sparked public ire at a time when US oil giants are setting record profits while gasoline prices keep rising.
   In a June article, The New Yorker weekly argued it was ‘rational’ for oil refiners to seek production limits so that prices, and profits, continue to go up without the huge additional investment cost required by new refinery construction.
   But energy sector analysts dispute this view, arguing that one of the main obstacles facing potential new refineries was the NIMBY (‘not in my back yard’) factor, where the public would lobby local governments against opening up such massive, and polluting plants where they live.
   ‘They want the gasoline but they don’t want the refinery,’ said WTRG Economics analyst James Williams.
   And coupled with rigorous local environmental standards, it becomes even more difficult and expensive for a company to win construction permits for new plants, Williams said.
   For example, a proposed new refinery for the southwestern state of Arizona, launched in 1999, has still to get off the ground and would be completed no earlier than 2011, the American Petroleum Institute (API), an oil industry lobby group, said.
   ‘It’s very costly to build new refineries,’ said Jason Schenker, an industry analyst with Wachovia.
   It requires ‘huge capital investment, and over time they are not always profitable,’ Schenker said.
   API estimates that a new refinery would require up to seven billion dollars of investment, which would take at least five years to complete, locking down possible profits.
   The result: refiners are starting to build elsewhere—in China, India, or the oil-producing countries where construction is easier logistically and cheaper, while the United States becomes more dependant on foreign suppliers.
   Since the early 1980s, US gasoline imports have grown six-fold.
   This leaves the country in a strategically delicate situation and susceptible to foreign tensions, which can play havoc on oil prices as witnessed by the recent upsurge in Middle East violence, analysts said.
   ‘The more refineries are some place else, the more subject you are to the geopolitical events that we see moving crude prices,’ said Williams.

A growing number of Americans are setting up mini-refineries in their homes to produce biodiesel, a fuel made from waste cooking oil which is cleaner and cheaper than the petrol sold in gas stations.
   The sky-high price of crude oil is scaring everyone.
   Biodiesel has Hollywood backers like actress Julia Roberts and Morgan Freeman, is sung about by country star Willie Nelson but also meets the political correctness of the American right wing which has made the campaign against imported oil a mantra.
   ‘It’s better for the engine, way better for the environment, it’s cheaper, but it depends how you price your labor,’ said Dan Goodman, an entrepreneur in residence at the University of Maryland Business School who runs his Mercedes on biodiesel.
   There are two ways to get on the biodiesel bandwagon, Goodman said.
   Either you change the engine and just put in waste oil, which would not be strictly legal in the United States, or you can modify the fuel into biodiesel, which is legal and works in any diesel car.
   Biodiesel plants are a boom industry in America, but thousands now make fuel in their garages from the oil left after frying french fries or scrounging around restaurants and food factories.
   ‘It’s easy when you know how to do it,’ Goodman said, though he warned that the process ‘can be hazardous,’ since it involves flammable products and caustic vapors that require a well-ventilated production site.
   ‘You filter the waste fried oil to remove the glycerol, the most sticky part, and then replace it with an alcohol molecule (methanol) and lye (caustic soda),’ he said.
   Goodman makes about 300 gallons (1,135 liters) of biodiesel a day on a farm in Maryland, where his helper Matt Geiger twice a week brings huge jerricans of the precious ‘yellow grease’ he collects from restaurants in the towns of Olney and College Park.
   The homemade fuel keeps 15 school buses running in the area, Goodman said.
   Most biodiesel fans have organized into cooperatives that make biofuel from soy oil instead of used cooking oil. The groups have been growing over the past few years, but they still represent a minuscule part of the US energy sector.
   According to the National Biodiesel Board, biodiesel production has tripled since 2004 to 75 million gallons (280 million liters) last year. This year, it is expected to double to 150 million gallons (56 million liters).
   In comparison, US consumption of traditional diesel fuel extracted from crude oil stands at 60 billion gallons (227 billion liters) per year.
   But biodiesel still has country music legend Willie Nelson singing its praises.

The Bank of Japan said on Friday that it will not be hasty in further raising interest rates, Kyodo News reported.
   Toshiro Muto, deputy governor of the bank, said the BOJ will raise interest rate levels at a slow pace while closely watching the overall economic situation and price trends.
   Analysts comprehend Muto’s remarks as an indication that the central bank will not approve another rate hike in the near future.
   The BOJ will maintain an accommodative monetary policy if the Japanese economy progresses as what the bank has predicted, Muto was quoted as addressing on lecture in Tokyo.
   The BOJ decided at its Monetary Policy Board meeting on July 13 to lift the zero-interest-rate policy, which had been effective since August 2000. The key short-term interest rate was raised to 0.25 per cent on the following day.

Japanese trading house Marubeni Corp. is considering taking over troubled retailer Daiei Inc. by raising its shareholding to 44.6 per cent, a newspaper said Saturday.
   Marubeni, which current holds about 11 per cent of Daiei shares, plans to buy 33.6 per cent from the Industrial Revitalization Corp. of Japan (IRCJ), the Nihon Keizai Shimbun said.
   IRCJ, a government-backed corporate bailout body, has taken the lead in reforming Daiei by acquiring key shares with taxpayers’ money.
   With the planned purchase, Marubeni would become Daiei’s top stockholder followed by investment fund Advantage Partners LLP which now holds 23.5 per cent of the retailer, Nihon Keizai said.
   Marubeni and IRCJ are expected to agree on the deal as early as this month, it said.
   Proceeds from the sale of the stock, which are all special-class shares, are expected to top roughly 50 billion yen ($431m) that the IRCJ invested in May 2005, it said.

Commercial Bank of Ceylon opened its newest Branch at Uttara on July 19.
   The bank’s chairman, MJC Amarasuriya, the Chairman and Sri Lankan high commissioner V Krishnamoorthy formally inaugurated the branch at plot 12, road 14C, Uttara Model Town. The function was attended by CBC’s corporate management executives and Uttara branch manager George Gomes.
   Within the past two and a half years of entry in Bangladesh, CBC has extended its network to 7 outlets and launched many innovative products and services, providing more investment opportunities to individual investors and business community.

Caterpillar Q2 earnings climb
Caterpillar Inc. reported its strongest quarterly results in at least four decades Friday, posting 38 per cent higher profits as strong demand for its equipment in mining and highway construction helped overcome the impact of a US housing slowdown. The heavy-equipment maker’s record sales and better-than-expected earnings showed no sign of the weakening in the global economy that some observers have been anticipating. Net income rose to $1.05 billion, or $1.52 per share, from $760 million, or $1.08 per share, in the second quarter of 2005.
— AP

Toyota’s Australian arm sees profits slump
Toyota Australia has revealed a 22 per cent drop in annual net profit as capital expenditure eats into revenues generated by record domestic sales. Toyota Australia, a wholly-owned subsidiary of the Japanese automotive giant, said net profit fell to 55 million dollars (41.25 million US) from 70.8 million in the previous period. Toyota Australia president Ted Okada said the lower profit was because capital spending more than doubled to 420 million dollars as Toyota consolidates its local manufacturing operations to a single plant at Altona in Victoria. He said Toyota sold a record 208,882 vehicles in calendar 2005, the second consecutive year it has exceeded 200,000 sales, a feat never achieved by any other Australian automotive manufacturer.
— AFP

Hong Kong gold closes lower
Hong Kong gold prices closed lower Friday at $627.70-628.20 an ounce, down from Thursday’s finish of $639.40-639.90. The market opened at 625.30-625.80 dollars.
— AFP