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The finance minister has given a rosy picture of economic performance in the outgoing year and an upbeat outlook for the next fiscal, saying that the economy would grow at the neighbourhood of 7 per cent in the 2006-07 fiscal.
   As in the budget speeches for all the last 35 fiscal years since the independence, poverty reduction remains the centerpiece of Saifur’s rhetoric for the 2006-07 fiscal.
   Though he claimed that 56.3 per cent of total Tk 69,740 crore outlay has been directed towards direct and indirect poverty-reducing spending, he has no guarantee that the whole amount, earmarked both as development and non-development expenditures, would be spent as per planned at the end of the year. So he took a safe side, saying, ‘Poverty is a multi-dimensional complex issue that cannot be eliminated overnight.’
   Both the development and revenue budgets were downsized in the current fiscal year, for, what Saifur said, reducing wastage of resources.
   He has mentioned the poverty reduction strategy paper, the donor-driven handbook for development and its roadmap Medium Term Budget Framework, which began from the current fiscal year.
   MTBF has been planned to give ministries the authority to prepare their own spending plans, and so far 10 ministries and divisions have been brought under the ambit.
   But minister for agriculture, one of the four ministries, experimentally exercised the authority in the current fiscal, though he earlier termed the framework ‘bogus.’
   Saifur also acknowledged that the implementation of MTBF initially may face some difficulties but eventually give greater benefits in terms of qualitative changes in public financial management. ‘Gradually, this budgeting system will be rolled out to all ministries and divisions,’ he announced in the budget speech.
   Keeping the poverty reduction an open-ended fight, Saifur just said these policy paper and framework would help the government achieve the millennium development goals, which envisages halving poverty by 2015 and requires Bangladesh to gain a double-digit growth.
   But Saifur looks happy with the present pace of growth. ‘In spite of unprecedented surge in oil price and political instability, we expect that the growth rate would still reach 6.7 per cent during the current fiscal year…. the growth will reach in the neighbourhood of 7 percent. …the price inflation is expected to come down below 6 per cent.’
   He claimed credit of ‘successful implementation’ of structural reforms that helped the economy see 5.3 per cent, 6.3 per cent and 5.9 per cent growth respectively in FY 2002-03, FY 2003-04 and FY 2004-05.
   ‘In spite of unprecedented surge in oil price and political instability, we expect that the growth rate would still reach 6.7 per cent during the current fiscal year,’ he said.
   He hopes to see a double-digit growth in manufacturing sector with contribution of industry sector to GDP growing to 29 per cent.
   Saifur took complacence over the ‘prudent fiscal policy and sound macroeconomic management’ for containing budget deficit at 3.9 percent of GDP.
   The amount of borrowing from domestic sources was also within the limit of 2 per cent of GDP, he said, negating the widely held perception private sector credit flow has declined due to excessive borrowing by the government from the banking system.
   The credit flow to the private sector remained unhindered and up to March, 2006, industrial credit has increased by 20 per cent compared to that of corresponding period of last fiscal, he said.
   The government borrowed only Tk 688 crore from banks up to 23 May of this fiscal year. ‘However, Bangladesh Petroleum Corporation (BPC) had to borrow heavily from the banking system to finance its high priced petroleum imports,’ he said.
   Due to price hike of consumer goods including food items and oil in the international market, the annual price inflation in the first half of the current fiscal year reached 7 per cent before it eased to 6.2 per cent in March.
   ‘In fact, we imported inflation concurrently with the import of commodities at higher price,’ he said.
   Belying all apprehensions, Bangladesh’s growth in the exports of garments sector continued to rise even in post-MFA years.
   As per latest data available up to March 2006, export income was $7.5 billion, which was 19 percent higher than that of the corresponding period of the last fiscal year.
   Given this trend continues, in the current fiscal year export is expected to exceed $10 billion (Tk 70,000 crore) which in FY 2000-01 was only Tk. 34,800 crore.
   ‘To maintain this trend of export growth in RMG sector, after safeguarding the interest of the workers, the prevailing temporary unrest should be dealt with sternly by all irrespective of party affiliation,’ he said.
   The remittance flow grew by 20 per cent on an average during this period and expected to exceed $4.5 billion in the current year which was only $1.9 billion in FY 2000-01.
   Despite pressure of additional expenditure due to implementation of new National Pay Scale and price escalation of importable commodities including oil in the international market, the non-developmental expenditure has been scaled down to Tk 37,057 crore following strict fiscal discipline, cutting wasteful expenditure through austerity measures.
   The original size of the Annual Development Programme of Tk 24,500 crore was slimmed to Tk.21,500 crore, as the government dropped a number of low-priority projects due to decline in foreign aid-flow and sluggish utilisation of funds in some projects.
   ‘Labeling the current year as the election year, some quarters are launching propaganda that this year the government will come out with a big budget to finance election campaign with higher dose of deficit which is proved wrong now,’ Saifur said in the budget speech.
   The ‘private sector-led growth strategy’ would help the economy remain resilient to both internal and external shocks, keeping trade and investment buoyant and leading the economic growth towards 7 per cent, he added.

Although Saifur Rahman mentioned that the budget has been prepared on the basis of the PRSP targets at the beginning, it is not clear how it is different in terms of structure from the previous budget. This traditional structure allows to challenge the claim that 56.3% of the allocation in this budget is for poverty alleviation. The budget structure remains obscure for the common citizens.
   The major concern of the citizens at this moment is how to meet the living expenditure with limited budget as the price spiral went beyond any imagination. The budget proposes reduction of tariff on some essential items to 5 per cent. That is a positive sign; however, lack of control over the market does not ensure reduction of prices on those items. The imposition of fixed tariff on sugar is also a good proposal. The government can implement this reduction through statutory order without waiting for budget approval.
   For improvement of revenue earning the government went to the easy path – broadening the coverage of VAT.
   The rise of VAT definitely will play a role in price of essential goods and services.
   Another way was to improve the tax collection mechanism and stop tax evasion.
   However, it is difficult in prevalence of pervasive corruption and mal-governance. Saifur Rahman asks the lawmakers for immediate reform of laws and legal system. Interestingly, the government took a few weeks for enacting and changing some laws, but why it was not possible for such an important matter is not clear.
   The income tax provisions went against the low income group whereas a favoured upper middle class by offering rebate of 10%, who paid tax above 25% of income. Due to price hike it would be wise to reduce the tax burden for those, whose income falls in the first tier of tax structure. This would relieve the pain of the poor and low income families to save money for spending on essentials, rather than paying tax.
   It is not also understandable why tax evaders’ burden has been reduced by reducing fine for tax evasion.
   If citizens could pay tax without hassle and bribe, the tax income could cover both revenue and development budget, we would be free from the curse of seeking money from the IFIs in exchange of giving up policy space. Policy package imposed by them seldom goes in favour of country’s economic stability.
    SMEs would be benefited from steps of withdrawing tariff on raw materials and machineries and imposing tariff on competing finished products of electronics, plastic and melamine industry, textile, readymade garments, hosiery, label, terry towel, dairy and poultry industry. This step would also affect the produce of these industries which are mostly consumed by common people.
   The trend of cosmetic treatment continues for the vulnerable groups with marginal increase of the benefits and coverage of beneficiaries.
   There is no attempt of allocation in each of sector’s budget so that the lives of millions of vulnerable people can be improves meaningfully.
   The budget speech starts with human resource development; the allocation has increased in this by only 1 per cent, from 22 per cent to 23 per cent. It is not clear how this 23 per cent will be spent both for quantity and quality, which was emphasised in the budget speech.
   The budget also could not offer any special measure for the power sector; it is not clear whether it is due to lack of faith in returning to power. It was more than urgent to take emergency measure to improve the power situation without wasting a single day. Unfortunately the government keeps the onus on the next government. The budget allocation is in the same line of the previous year.
   The government is continuing to ignore the information and communication technology sector and relishing with the steps taken earlier, which in no measure are adequate to unleash the huge potential of this sector both for poverty alleviation, employment generation and catching the huge international market  of global knowledge economy.
   There is no budget to build up national-wide information infrastructure, which could be used by the local governments, local SMEs and farmers and other vulnerable groups, for getting essential livelihood information, market information, employment opportunities, improving transparency in operation of local governments related to the vulnerable groups.
   Until a participatory process is ensured in budget formulation, the “transplanted economists”, who have little understanding of ground realities and ready to apply “western text book solutions” and bureaucrats of IFIs will continue to destroy the scope of flourishing of the economy and society by dictating budget’s terms and conditions. It is time to rethink about sovereignty of decision making of a sovereign government. ?
   [Ananya Raihan is the executive director of D.Net, The opinion expressed is his own]

The finance and planning minister, M Saifur Rahman, has tabled the annual financial statement for fiscal year 2000-07 in the national parliament proposing gross expenditure worth Tk 88,732 crore as ‘demands for grants and appropriations.’
   This is the maximum ceiling of the government spending between July 1, 2006 and June 30, 2007. For the current fiscal year, parliament approved gross expenditure worth Tk 81,427.83 crore in response to demands for grants and appropriations in June last.
   And the budget outlays of Tk 69,740 crore is the adjusted receipts and expenditure of the ‘consolidated fund’ and ‘public accounts of the republic’ against the demands for grants and appropriations, revealed in the annual financial statement.
   Annual financial statement is a constitutional binding while the net outlay is known as ‘budget’ in the rules of procedure.
   Of the gross expenditure, an amount of Tk 21,648 crore has been proposed as ‘charged expenditure’ that does not require approval by the parliament because of such a constitutional provision. The matter may come up for discussion in House, however.
   Remuneration payable to the President, Speaker and Deputy Speaker, Judges of the Supreme Court, Comptroller and Auditor General, as well as a few other items of expenditure, have been termed as charged expenditure in the Constitution
   For the current fiscal year an amount of Tk 18,446.9 crore was placed and approved as charged expenditure.
   The rest of the amount, known as ‘other expenditure’, of Tk 67,083 crore requires approvable of parliament, after discussion during the budget session, thus known as vote-able expenditure for the new fiscal year.
   This expenditure proposal has been submitted to the parliament in the form of ‘demands for grants’ and involves Tk 40,602 crore as non-development and Tk 26,480 crore as development spending for fiscal year 2006-07.
   For the current fiscal year, Tk 62,980 crore was rubber-stamped after discussion in the parliament. The expenditure involves Tk 37,707.7 crore as non-development and Tk 25,273 as development spending.
   Parliament enjoys power to assent to or to refuse to assent to any demand, or to assent to it subject to a reduction of the amount.
   Combining these charged and other expenditures, the bill of appropriation will be finally placed in the parliament at the end of June and the bill will
   be passed, with or without
   any change in allocations, and know as passages of the national budget.

The budget for fiscal 2006-07 proposed duty reduction on import of raw materials to promote local industries, including plastic, melamine, electronics, textile, and paper and printing industries.
   ‘Plastics and melamine industries have made their mark in the domestic and international markets,’ Saifur said in his budget speech and stressed the need for making them more competitive.
   He proposed reduction of import duties of certain basic raw materials of these industries from 13 to 5 per cent.
   As a measure of providing further incentives to the local plastic industries, the Finance Minister proposed enhancement of import duties of some plastic products like stopper, lid, cap etc from 13 per cent to 25 per cent.
   Motivated by the same consideration, he proposed rationalization of supplementary duty levied on certain printed plastic materials, including printed plastic sheet.
   Saifur said the country’s local electronics industries are coming up by leaps and bounds. With a view to encouraging this promising sector, he proposed that import duty on diodes, transistors, semi-conductor device and compressors be reduced from 13 to 5 per cent.
   With the same objective, he proposed withdrawal of special rebate facilities from UPS/IPS of capacity not exceeding 2000 VA.
   The minister proposed withdrawal of all duties and taxes from certain spares required for readymade garments, textiles, hosiery, label, and terry towel industries and affluent treating plant.
   Besides, he proposed that duties and taxes except IDSC be withdrawn from synthetic filament tow, one of the basic raw materials of hosiery industry.
   To make paper and printing industry more competitive, Saifur proposed imposition of supplementary duty at 15 per cent on advertising materials, commercial catalogues etc.

Sri Lanka has stopped production and export of vanaspati until the Indian government removes new import restrictions, the industry said Wednesday.
   Duty-free exports of vanaspati, a hydrogenated vegetable oil, has been a sticky issue in bilateral trade ties, with Sri Lanka accused of flooding the Indian market with it at cheaper prices.
   New Delhi this month restricted exports, allowing only state- run National Agricultural Co-operative Marketing Federation to import duty-free from Sri Lanka.
   ‘All units producing vanaspati in Sri Lanka have come to a standstill for the purpose of exports,’ the Vanaspati Manufacturers Association of Sri Lanka said in a letter to Industries Minister Rohitha Bogallagama.
   Sri Lanka had voluntarily capped exports at 250,000 metric tonnes and restricted the quota to 10 factories, despite a free trade agreement in force, Lanka Business Online reported.
   ‘It has been decided by all 10 units to stop all exports and production with immediate effect until the government of India removes the imposed notification,’ the Association said.
   Sri Lanka will be making representations to its High Commission in New Delhi on the issue, said Nimal Karunatilake, Deputy Director of Commerce.
   The issue is also expected to be at the centre of secretary- level talks under the Comprehensive Economic Partnership Agreement, scheduled for June 26.
   The Association says they have invested over $100 million here and shipped 108,000 metric ton-nes of vanaspati to India last year.

President Gloria Arroyo’s economic managers warned Thursday that a public row with senators over the proposed 2006 national budget could undermine national security and hobble the Philippines against global competition.
   The Senate, the half of a bicameral legislature that is dominated by Arroyo political foes, have balked at passing the 1.053 trillion-peso (19.87 billion-dollar) budget bill and want to trim 31.1 billion pesos off it.
   Arroyo’s senior economic managers said in a joint statement that the proposed cuts would trim infrastructure spending, including on projects pledged by the government in 100 villages as part of peace agreements it signed with various rebel groups.
   ‘The loss of this program will delay the governments ability to end the insurgency problem and hobble its efforts to bring progress to these (villages),’ said the statement by Finance Secretary Margarito Teves, Economic Planning Secretary Romulo Neri, Budget Secretary Rolando Andaya, Trade Secretary Peter Favila, and Energy Secretary Raphael Lotilla.
   Senate president Franklin Drilon however said there was no longer enough time to pass the 2006 budget bill because the Senate is adjourning on Friday. He said the government would then be required to follow appropriation levels specified by the 2005 national budget law.

Cambodia will pay back money stolen from World Bank projects, Finance Minister Keat Chhon said Thursday after the bank froze aid funding amid a massive fraud scandal.
   ‘Repayment is unavoidable. We need to repay ... just sooner or later,’ he told lawmakers, without saying how much money the government would hand over.
   ‘We need to find those who are guilty and punish them according to the law—like catching the rat on the cupboard without breaking the plates inside,’ he said.
   The World Bank Tuesday suspended funding for three projects and demanded the government pay back more than seven million dollars after uncovering irregularities in dozens of project contracts.
   The decision followed allegations of misuse of funds and misprocurement in seven World Bank supported poverty reduction and infrastructure projects.
   Cambodia’s government halted disbursement of funds on its own to the three projects, worth 64 million dollars, in May after the fraud allegations first surfaced.
   But earlier this month it resumed the projects after demands that the World Bank present evidence to back up its corruption claims were not heeded.
   Keat Chhon said the projects are continuing as he ‘examines the documents given by the World Bank step-by-step’.
   ‘Since the World Bank first alerted the ministry on May 10 ... the situation is becoming clearer. We will continue investigating this case,’ he said.
   No details have been given of the fraud, which occurred in some of the contracts involving the projects, but the halt effectively stalls work in the land management, road infrastructure and water sanitation sectors.
   The World Bank is still investigating three other projects worth more than 67 million-dollars that were completed in 2005 but has already found indications of fraud and corruption, it said in a statement.
   Cambodia’s opposition party Thursday demanded ‘severe sanctions’ against those found to have stolen any funds.
   ‘The government must show seriousness in its commitment to fighting corruption and putting an end to impunity,’ it said in a statement.
   The World Bank currently funds development projects worth about 244 million dollars in Cambodia which is in tatters after decades of civil war.
   Cambodia fell afoul of the World Bank in 2003 when graft was uncovered in a project to demobilise some 30,000 soldiers.
   The government was forced to pay back 2.8 million dollars after the World Bank threatened to cut funding to other projects.
   The impoverished country is plagued by corruption at almost every level of government and the misuse of international funds has been the major focus of Cambodia’s donors during their annual review of the country’s reform efforts.
   Cambodia’s parliament has yet to pass anti-corruption legislation that has been a demand of the country’s donors.

After Vietnam joins the World Trade Organization, hopefully in late 2006, its garment and agriculture enterprises will face harsh competition, local media reported Thursday.
   Upon Vietnam’s accession to the WTO, competition on the domestic market will become fiercer as levies against imported garments and textiles are to be lowered to 10-15 per cent from current 40-50 per cent, according to the Vietnam Textile and Garment Association (Vitas), a Vietnam News newspaper said.
   The local garment and textile industry currently has to import almost fabrics, garment-making accessories, machines, technologies and chemicals, all at high costs, while Vietnam has decided to abolish state subsidies to the industry to comply with requirements for the country’s entry to the WTO.
   ‘When Vietnam becomes a member of the WTO, difficulties imposed on domestic garment makers would likely outweigh opportunities,’ the newspaper quoted Vitas chairman Le Quoc An as saying.
   Like garment companies, local agriculture enterprises will encounter fierce competition in the domestic market, since most of them are financially and technically poor.

Malawi’s earnings from tobacco, its biggest export crop, will rise by nearly 10 per cent this year on the back of higher production, the national tobacco watchdog said.
   ‘It is projected that the total revenue realised on the (trading) floor will be 178 million dollars (139.4 million euros), a 9.8 per cent increase over last year’s revenue of 162 million,’ Godfrey Chapola, general manager of the Tobacco Control Commission (TCC), said in a report received by AFP Thursday.
   Chapola said the increase ‘is attributed to slightly higher production of 158 million kilos this year compared to 145 million last year.’

Taiwan will organise its first electronics exhibition in Bangkok in July, using Thailand as a gateway to tap the huge market potential in the Southeast Asian region, officials said Thursday.
   At least 200 electronics and information technology companies from Taiwan have registered to display their products in the four-day fare slated to open at Bangkok International Trade and Exhibition Center July 27, Taiwan External Trade Development Council (TAITRA) said.
   ‘We decided upon Thailand since it represents a perfect venue for a Taipei trade show,’ Walter Yeh, TAITRA executive vice president, told reporters on the sideline of an ongoing computer trade fair in Taipei.
   Taiwan has been pushing to forge FTAs with its major trading partners fearing it could be marginalised economically as rival China opens its vast market to investors.

Stocks across Asia tumbled to their lowest in months Thursday in the wake of declines on Wall Street and amid anxiety that possible US interest rates hikes will slow US and global growth.
   Japan’s benchmark Nikkei 225 index tumbled 3.07 per cent its lowest in six months, while Indian shares plunged as much as 5.6 per cent.
   South Korean shares dropped to their lowest level in seven months after the Bank of Korea unexpectedly raised interest rates for the fourth time since October. Australia’s stock market fell 2.35 per cent, with resource and bank stocks hit the hardest.
   Confusion about US monetary policy and doubts about US growth have hammered global markets over the last month, particularly in Asia. And a slump on Wall Street has made investors jittery.
   Growing speculation that the US Federal Reserve will raise interest rates later this month has triggered worries about a slowdown in the US economy, which could undermine demand for Asian exports.
   Investors in Japan are starting to factor in a slump in the US economy later this year, said Takashi Ushio, a strategist at Marusan Securities Co.
   ‘Continued selling is based on worries among investors that the Fed may raise US interest rates further to rein in inflationary pressures, even if allowing for an economic slowdown,’ Ushio said.
   ‘Until uncertainties about the US interest rate policy and the outlook over the American economy will be erased to some extent, the Tokyo market’s direction will remain unstable,’ he added.
   The Japanese stock market has fallen about 9 per cent this year, while the Indian market is down 25 per cent.
   Taiwan’s benchmark stock index plunged 4.2 per cent to its lowest level in nearly six months. Traders blamed the decline on falling stocks in other regional markets, and on political uncertainty over an opposition campaign to oust President Chen Shui-bian over alleged insider trading by his relatives.
   ‘We are clearly facing a double whammy of both external and domestic uncertainties,’ said Alex Huang, an assistant vice president at Barits International Securities.
   Only three stocks rose on Taiwan’s exchange, while 790 fell and 28 finished unchanged.
   In South Korea, the central bank’s unexpected rate hike to 4.25 per cent worsened investors’ already negative sentiment, contributing to a 3.5 per cent drop in the Composite Stock Price Index to its lowest finish since Nov. 7.
   ‘With the Asian markets all slumping, recent bearish sentiment, which initially began with caution over more (possible) US rate hikes, has gotten worse and worse,’ said Samsung Securities analyst You Sung-min. ‘The (BOK) rate hike was just one more on top of layers of negative factors.’
   South Korean banks were hit hard by the rate hike, fueling worries of a possible cooldown in South Korea’s sizzling property market and concern over whether the economy is strong enough to sustain higher borrowing costs.

Oil fell 1.7 per cent to below $70 for the first time in two weeks on Thursday after the death of al Qaeda’a leader in Iraq, where crude exports have been curbed by frequent sabotage attacks and instability.
   The plunge deepened
   losses from a day ago, when US data showed rising crude and fuel inventories, easing concerns about summer supplies in the world’s biggest consumer.
   US crude oil fell $1.21 to $69.71 a barrel by 0818 GMT after losing $1.68 or 2 per cent on Wednesday. London Brent crude fell $1.10 to $68.09 a barrel.
   Iraq’s Prime Minister Nuri
   al-Maliki told a televised
   news conference on Thursday that Zarqawi had been ‘terminated.’
   Oil exports from Iraq have failed to return to pre-war levels due to frequent sabotage attacks on the country’s northern pipeline and deteriorating security that has prevented significant investment in aging southern oilfields.
   Those curbs—coupled with the ongoing loss of a quarter of Nigeria’s output and growing anxiety over Iran’s supplies—have helped fuel a near 15 per cent rise in oil prices since the start of the year, extending a rally that began after the US invasion of Iraq more than three years ago.
   Crude supplies in the United States rose 1.1 million barrels last week on lower refinery output, the Energy Information Administration said, compared to analyst forecasts of a decline.
   This took stocks 4.2 per cent above this time last year.
   Gasoline stocks increased for the sixth week to gain 1 million barrels, while distillate supplies rose by 1.8 million barrels, providing a more comfortable supply cushion during peak summer demand. Gasoline futures led losses on Thursday, down 1.6 per cent at $2.09 a gallon.
   Adding to pressure, former Federal Reserve Chairman Alan Greenspan said on Wednesday that recent data showed high oil prices are starting to impact the US economy.
   Iran’s Supreme Leader Ayatollah Ali Khamenei rattled oil markets this week after he said oil flows from the Gulf would be endangered if Washington made a ‘wrong move.’
   Traders also remain on edge over supply disruptions in Nigeria, the world’s eight-largest exporter, after militants attacked a Shell-operated
   facility in the Niger Delta, killing soldiers and kidna-pping five South Korean contractors.
   A militant group said the South Koreans will be released later on Thursday.
   
   Dollar rises
   The dollar rose Thursday on news of the death of the Al-Qaeda chief in Iraq, Abu Musab al-Zarqawi, AFP reports from Tokyo quoting dealers said.
   ‘Clearly, this news added to the momentum of the dollar, which was already on an upturn on the improved
   outlook for US interest rates,’ said Bank of Tokyo Mitsubishi UFJ forex analyst Masashi Hashimoto.
   ‘Whether this development will help revive sentiment towards the dollar from a long-term view point is still far from clear at this point,’ Hashimoto said.
   The US currency rose to as high as 114.03 yen and the euro fell to 1.2748 dollars after news of the death broke, before the greenback pared its gains.
   Shortly beforehand the dollar had stood at 113.85 yen, while the euro was at 1.2759 dollars.
   Iraqi Prime Minister Nuri al-Maliki announced the death of the fugitive Islamist who topped a US most-wanted list in Iraq since Saddam Hussein’s downfall in April 2003, saying he ‘has been eliminated.’

The European Central Bank sat down to its regular monthly policy-setting meeting here on Thursday, with financial markets expecting it to tighten monetary conditions to keep a lid on inflation in the 12-country eurozone.
   The ECB’s rate-setting governing council, meeting in the Spanish capital rather than in the euro bank’s headquarters in Frankfurt, was widely expected to raise its key interest rates by at least a quarter of a per centage point to 2.75 per cent.
   However, many analysts think it might possibly raise them by more than this as oil prices push up headline inflation in the eurozone and economic recovery continues to gather momentum, despite strength of the euro and volatility on world stock markets which showed sharp falls overnight and in early trading.
   Also in attendance at the meeting was the EU’s Commissioner for Economic and Monetary Affairs, Joaquin Almunia, and the head of the Eurogroup finance ministers and Luxembourg Prime Minister, Jean-Claude Juncker.
   The rate decision was expected to be announced at 1:45 pm , followed by a press conference at 2:30 pm where ECB President Jean-Claude Trichet would explain the reasoning behind the move.
   The guardian of the euro has already raised its benchmark ‘refi’ refinancing rate twice in the past six months—in December and in March, each time by a quarter of a per centage point.

Australian Wheat Board (AWB) Wednesday said it was keen to bid for upcoming 2.2 million tonnes global tender for supply of the grain to India depending on terms and conditions.
   AWB would bid for 2.2 million tonnes outstanding wheat import tender to be floated by India, company’s spokesperson Peter McBride told PTI.
   He, however, put the condition that the company would only take part in the likely global bid if satisfied with the terms and conditions of the tender.
   McBride also clarified that the outstanding quantity of the wheat consignment bagged in the first round of State Trading Corporation-floated global tender would be delivered at the Indian ports shortly. He maintained that the company is ‘still hopeful of a positive outcome’ for the contract.
   AWB has so far delivered over 90,000 tonnes against a 500,000 tonne contract, McBride said, adding ‘currently AWB is in discussions with our Indian customers and relevant authorities to resolve a number of quality issues and we are hopeful of an outcome in the near future.’
   Originally, AWB was supposed to deliver the entire quantity of the first tender by mid May but due to reasons related to phyto-sanitary conditions, the delivery was delayed. McBride said AWB was negotiating and reviewing the terms and conditions for supplying 500,000 tonnes of wheat in the second tender.

Americans have to wait probably another year before they can relish succulent Indian mangoes.
   More than three months after President George W Bush told Indian Prime Minister Manmohan Singh that ‘the United States is looking forward to eating Indian mangoes,’ Washington has still not decided to open the doors to the fruit, of which the Asian giant is the world’s bigger producer.
   India’s Agriculture Minister Sharad Pawar raised the mango issue with his US counterpart Mike Johanns Wednesday during a visit to Washington.
   ‘I found that the US side is quite serious about that and they want to resolve the issue as early as possible,’ he told reporters at the end of a five-day visit to the United States.
   ‘We are expecting that next mango season probably, we will be able to export our mangos to American market,’ Pawar said.
   Mangoes ripen across India in May as sharp sirocco winds descend into South Asia before the annual June to September monsoon. The Indian mango, especially the King Alphonso variety, is widely regarded as the most luscious of the species.
   The main hurdle to getting Indian mangoes to the United States has been fears pests like fruit flies and weevils could be imported, but Indian farm export officials say those problems are being resolved.
   A team from the United States Department of Agriculture was in New Delhi last month to work out technical issues.
   After Bush and Singh clinched a deal in New Delhi in March for India to receive civilian nuclear technology barred for almost 30 years, they also endorsed a workplan to promote trade in agriculture.

About 700 businessman from Turkey and Arab countries gathered here Thursday for a two-day forum focusing on ways to increase economic cooperation.
   Turkish Prime Minister Recep Tayyip Erdogan and his Lebonese counterpart Fuad Siniora participated in the opening-session of the gathering which also has Arab League chief Amr Mussa and Iraqi Deputy Prime Minister Barham Saleh among the guests.
   The forum will feature several round-table discussions on a wide variety of subjects, including how Turkey’s eventual membership of the European Union would affect the trade volume between Arab countries and Europe.
   ‘The more trade there is, the more prosperous and peaceful the world will be,’ Erdogan said in his inaugural speech.
   Mainly Muslim Turkey is very keen on luring Arab investment, especially from the Gulf countries, amid a spectacular economic recovery from two major financial crises in 1999 and 2001.
   Last year, Dubai International Properties, a leading property developer based in the United Arab Emirates, agreed to invest five billion dollars (3.9 billion dollars) in projects in Istanbul, a sprawling metropolis of 12 million people.
   Rona Yircali, the head of Foreign Economic Relations Board (DEIK), an influential non-governmental economic organization, told the forum that the trade volume between Turkey and Arab countries had reached 17 billion dollars (13.3 billion euros) in 2005.
   ‘Energy projects worth 130 billion dollars (102 billion euros) which are planned to be undertaken in Turkey in the next 10 years create new opportunities for the Arab World,’ he noted.

The most popular feature of the self-proclaimed World’s Largest Laundromat is not the massive machines that wash eight loads at a time. It is the aviary.
   The 12 finches, two miniature doves and a yellow canary flirt and flitter in a cheerful glass-encased pen next to the coin machines. Some of the older women in this suburb of Chicago will stop by to watch them even when they have no laundry to do.
   ‘There’s babies being born in there all the time,’ said owner Tom Benson, 61, who bought the laundromat in 1999. ‘Customers just beg me for a chick.’
   But while the aviary and perks like free coffee and donuts may be the secret to the laundromat’s popularity, the secret to its financial success is the banks of solar panels on the roof.
   Benson figures the 36 panels save him about 2,000 dollars a month in energy costs by shouldering the bulk of the work of heating the water for his 157 washing machines, which run 24 hours a day.
   ‘It’s such a good idea business-wise and conservation-wise that they should make it the law,’ he said. The panels have also provided a lot of free advertising. The lieutenant governor of Illinois attended the laundromat’s reopening ceremony after a fire in January to celebrate the largest solar water system in the state.
   ‘Developing ‘All-American energy’ sources creates jobs for Illinois workers in emerging technologies,’ Lieutenant Governor Pat Quinn said at the time. ‘Let’s declare ourselves independent of foreign potentates by making a long-range commitment to ‘All-American’ energy sources such as wind and solar.’

Japan’s government Thursday urged the central bank to maintain zero interest rates to allow the economy to recovery as fears of a slowdown in US growth battered global stock markets.
   ‘We hope the Bank of Japan will support the economy with its monetary policies,’ Chief Cabinet Secretary Shinzo Abe told reporters.
   ‘We want the bank to do so by continuing with the zero interest rate policy,’ said Abe, the government’s top spokesman.
   Top cabinet members including Prime Minister Junichiro Koizumi sought to reassure investors that Japan’s economy is in solid shape after the Nikkei index fell over three per cent Thursday—its biggest one-day loss this year.
   ‘The Japanese economy is on a recovery path,’ Koizumi said.
   Kaoru Yosano, state minister in charge of economic and fiscal policy, also said the nation should not become pessimistic over stock prices.
   ‘The time of volatility will last for some time but the market will start reflecting the fundamentals of the Japanese economy after that,’ he said.
   The Tokyo Stock Exchange’s Nikkei-225 index slumped 462.98 points or 3.07 per cent to a six-month low of 14,633.03 Thursday on fears that higher US interest rates will slam the brakes on global economic growth, dealers said.
   At one point the index was down by almost 600 points or four per cent but the market managed to recover some ground by the close.
   Following the government’s call, BoJ deputy governor Kazumasa Iwata said the central bank was not accelerating the process of draining excess cash from the banking system following the end to its ultra-loose monetary policy.
   At the same time he indicated that the BoJ would continue to move toward an end to its zero interest rate policy despite the stock market plunge.
   ‘We have not changed our view that interest rate levels will be gradually adjusted as the nation’s economy is shifting to a normal state from deflation despite the current movement of asset prices,’ Iwata told a news conference in the city of Akita, as quoted by Kyodo News.
   In an earlier speech Iwata dismissed concerns about falling stock markets, saying: ‘As investors’ position adjustments calm down, the stock and bond markets will recover stability.’

British airports operator BAA by increasing its holding to 28.7 per cent, the consortium said on Thursday.
   The increase, via a body called Airport Development and Investment (ADI), followed a purchase early on Thursday of a further 140 million shares, or about 12.9 per cent of BAA’s equity, a consortium statement said.
   ‘Following todays share purchases, the aggregate interests of ADI and its concert parties now represent approximately 28.7 per cent of BAAs issued ordinary share capital,’ it added.
   On Tuesday, BAA had recommended a bid by ADI of 950.25 pence a share which valued BA, owner of Heathrow, Gatwick and Stansted airports near London, at 10.1 billion pounds (14.7 billion euro, 18.7 billion dollars).
   The BAA board preferred ADI’s offer to a 955.25-pence proposal from a rival consortium led by the US investment bank Goldman Sachs.
   It was understood that Goldman had increased its terms late on Wednesday but that this was given short shrift by the BAA board.
   BAA directors reckoned that the ADI offer was further advanced, had greater industrial logic and would be easier to deliver.
   The Goldman Sach consortium has now decided to abandon its bid, saying in a statement: ‘The consortium including Goldman Sachs Infrastructure Group confirms that discussions with the Board of BAA plc have ceased.
   ‘Accordingly, the consortium announces that it will not proceed with an offer for BAA.’
   BAA owns seven British airports, while Ferrovial, which represents 65 per cent of ADI, also manages the Belfast, Bristol and Exeter airports.

India’s cabinet on Thursday cleared a proposal to upgrade airports at 35 major cities at a cost of nearly 1.7 billion dollars, a minister said.
   The overhaul of the airports in New Delhi and the western economic hub of Mumbai has already been approved and contracts have been handed over to two private consortia at an estimated combined cost of around 54 billion rupees (1.24 billion dollars).
   The state-run Airports Authority of India (AAI) will take charge of overhauling the facilities in the country’s second-tier cities in partnership with private companies, Aviation Minister Praful Patel told reporters in New Delhi.

China’s national planning agency on Thursday approved plans for an Airbus assembly plant in the northeastern city of Tianjin, calling the move an important step for the nation’s aviation industry.
   The National Development and Reform Commission has approved the choice of Airbus Industries to build A320 mid-range jets in the port city’s Binhai New Area, the planning commission said in a statement on its website.
   ‘The launch of the assembly line is an important step for China and Airbus to make long-term and sustainable cooperation in the aviation sector,’ the statement said.

The ratings agency Standard and Poor’s said Thursday Macau may overtake the Las Vegas Strip as the biggest gaming market in the world in terms of revenue within the next few years.
   China could also become the second-largest gaming jurisdiction after the United States, it added. ‘Macau’s gaming revenue could exceed 10 billion dollars over the next five years, but much will depend on the success of the Cotai Strip, which is scheduled to open for business in 2007,’ S and P credit analyst Mary Ellen Olson said.
   Cotai Strip is a district in Macau that will be developed into an entertainment area with hotels, casino, and other related gaming facilities. The agency said Macau’s close location to China provides a base of potential gaming customers that is larger than anywhere else in the world.

Thais are expected to ante up nearly one billion dollars on the World Cup, up 23 per cent from four years ago, a leading research center said Thursday.
   The increase in gambling comes in spite of a sluggish economy, which may actually have encouraged people to place bets in hopes of making extra money, the Kasikorn Research Center said.
   Some 56 per cent of the 3,093 adults questioned nationwide said they gambled for the excitement, but 34 per cent said they wanted to make some extra money.
   It said they would wager around 37 billion baht ($968.5 million) on World Cup matches.
   Thai women are expected to place bigger bets this year, rivalling men in how much money they are willing to wager, the center said.

As the threat of avian flu continues to increase worldwide, the World Bank is actively supporting countries in South Asia to improve both animal and human surveillance, and ramp up capacity to deal with any human epidemic, says a World Bank announcement Tuesday.
   Detailing the Bank’s response, it says that country level assessments on strategy, responses, and preparedness to the threat of a potential epidemic have been completed for Pakistan, Afghanistan, Bangladesh, India, Nepal, and Sri Lanka.
   The Bank’s operations are designed to strengthen HPAI clinical and laboratory diagnosis so that any outbreak can rapidly be detected and contained. In addition, the projects aims at building capacity of poultry farmers to ensure appropriate preventive measures in managing birds.

China’s actual FDI revised upward
China revised its figure for actual foreign direct investment in 2005 to 72.41 billion dollars Thursday, 12 billion dollars more than the previous estimate. The newly revised number, announced by Vice Commerce Minister Ma Xiuhong, marks a 19.4 per cent year-on-year growth over 2004, rather than a 0.5 per cent slide that the earlier figure of 60.33 billion dollars had suggested. In 2005, the banking, insurance and securities sectors received investments of 11.8 billion dollars.
— AFP

Kazakhstan to sign deal on pipeline
Kazakhstan will sign an agreement on joining a strategic oil pipeline from the Caspian Sea to Western markets this month, President Nursultan Nazarbayev said Thursday. ‘This month we will sign with the Azerbaijani government an agreement on the joining of Kazakhstan to the Baku-Tbilisi-Ceyhan pipeline,’ Nazarbayev was quoted by the Interfax-Kazakhstan news agency as telling an investors’ conference. Kazakhstan has been in lengthy negotiations over participation in the BP-led pipeline.
— AFP

Mittal gets Canada clearance for Arcelor bid
Mittal Steel said on Thursday that the Canadian Competition Bureau cleared its bid for rival Arcelor. ‘Along with the granting of EU antitrust clearance on June 2, 2006 and the expiry of the waiting period under the US Hart-Scott-Rodino An- titrust Improvements Act of 1976 on May 11, 2006, this clearance is a further positive and important step towards the successful completion of Mittal’s bid,’ Mittal said in a statement.
— Reuters