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Keeping inflation in check is the foremost task to ease the current volatility in the foreign exchange market as well as stabilise the exchange rate.
   Central bank top officials and independent analysts came up with the same views on Thursday at a discussion meeting on ‘floating exchange rate management: How does it work for Bangladesh’ organised by the Economic Reporters’ Forum at the National Press Club in Dhaka.
   But the Bangladesh Bank top executives rejected the suggestion, tabled by businessmen and analysts, for disbursing foreign exchange from its reserves to steady the exchange rate trend as the central bank found such intervention might not be sustainable.
   ‘Our monetary stance is to keep the inflation at a reasonable level and check any inflationary pressure originated from the excessive depreciation of local currency,’ said Salehuddin Ahmed, governor of the Bangladesh Bank.
   He said Bangladesh Bank is watching the external and internal factors affecting the inflationary trend and adjusting the
   monetary policy accordingly.
   The governor also said that the reserve, which now hovers around $3 billion, is the gross reserve while net reserve stands significantly lower, meaning that the central bank is not in a position to sell foreign currency continuously.
   ‘If we continuously disburse from the reserve, at one stage it will be levelled to bottom and it is also not a sustainable way to address the exchange rate problem’, the governor said, categorically saying that there is no crisis of the foreign exchange as claimed by many.
   He said that in the last fiscal year, central bank sold some $842 million in the market as well as lent some $312 million.
   Experience in managing the floating exchange rate has so far been in consistence with our expectation,’ the governor said.
   Deputy governor Allah Malik Kazemi said that central bank has intervened in the market time to time, but market also needs to respond to the intervention.
   ‘In our calculation, Taka is still undervalued but adjustment process is going on and macro economic indicators are in right track,’ he said.
   Kazemi also said that there is already a turnaround in the exchange market and hoped that volatility would be eased soon.
   Both the governor and deputy governor also rejected the allegation that central bank is following the International Monetary Fund’s advice without any difference.
   ‘We do quarrel with the IMF officials on many cases and major issues with paying no heed over their suggestions,’ governor said.
   Allah Malik Kazemi said that floating exchange rate system was introduced taking into account the standard economic wisdom, not at the diktat of IMF.
   Earlier, keynote speaker economist Ananya Raihan said that as the global exchange rate trend is beyond domestic control, suppressing the inflation rate is the most effective way to ease the exchange rate volatility.
   Demand-supply mismatch is the least important factor in terms of total estimated appreciation as the net effective exchange rate index for February, 2006 is 101.53 and real effective exchange rate is 115.91.
   NEER considers only demand-supply mismatch while REER includes CPI of Bangladesh and trading partners and global rates of relevant currencies, he added.
   ‘Thus required depreciation for correcting distortion due to inflation and global exchange rates of major currencies is 14.38 per cent,’ Ananya continued.
   He also suggested that the central bank should channel some foreign exchange from its reserve.
   In a similar vein, business leader Kutubuddin Ahmed said whatever factors may be there, the exchange rate stability is the bottom line for the investors.
   ‘Already we are suffering from global price hike of oil and other commodities required for industrial activities. Instability in the forex market put spiralling impact on us,’ he added.
   ‘What will be the wrong if Bangladesh Bank sells some dollars from the reserves and the reserves come down to $2 billion level?’ he questioned.
   Managing director of the National Bank M Aminuzzman said that any amount of demand-supply gap in the market is critical, as banks have to settle import payments in time.
   ‘Those who have shortage of supply became desperate to purchase at any cost to meet their obligations,’ he added, explaining the reasons behind the persisting forex market volatility.
   Aminuzzaman felt that supply side could be improved by increasing remittance inflow through the official channel and allowing foreign companies to borrow and repay in foreign currencies.
   Country treasurer of the Citibank NA, Bashar M Tareq said that three-tier exchange rate has put the forex market under pressure. Multi-tier exchange rate needs to be addressed, he suggested.
   ‘The rate is, however, now moving towards convergence direction,’ he added.
   Tareq also stressed the need for improved management information system.
   Deputy managing director of the Sonali Bank, M Amanullah said payment obligation for Bangladesh Petroleum Corporation has put the Sonali Bank in trouble.
   ’But the bank has now overcome the shortage of dollar, leaving a positive impact on the market,’ he added.
   ERF president Zakaria Kajal chaired the session while general secretary Nazmul Ahsan gave vote of thanks.

Despite having immense potentials and strong raw material base, Bangladesh shares less than 0.5 per cent in the $65 billion global leather goods market due to low value addition and weak infrastructures.
   If concerted efforts are taken by the industry and the government, the $300 million exports can easily cross $1 billion mark, viewed ministers, industry leaders and foreign patrons at the launching ceremony the Bangladesh Leather Service Centre.
    ‘We must get at least one per cent share in global leather goods trade,’ said the commerce minister, Altaf Hosain Chowdhury.
   Value additions in merchandises are the effective way to raise export earnings, the minister agreed, stressing better performance of local leather industries.
   ‘Bangladesh can easily earn $1 billion from global market,’ said Giovanni Dadaglio, an official of the Geneva-based International Trade Centre, which is assisting Bangladesh’s leather industry to enhance capacity.
   The 1.5 million Euro service centre has been set up with Italian assistance at the Bangladesh College of Leather Technology located at the city’s tannery hub, Hazaribagh.
   Pietro Ballero, ambassador of the global leather industry superpower, Italy, hoped that the centre would enhance quality and ensure global standard compliances in Bangladesh’s leather factories.
   The centre having advanced technology, local and foreign expertise, will offer chemical and physical testing facilities to entrepreneurs and provide training on design, product development and marketing in exchange of minimum service charges.
   Industry leaders said some 200 finished leather exporters last year earned $220 million, two third of total earning from the sector, while footwear exporters earned only $87 million.
    ‘More than 80 per cent of India’s $3 billion exports came from footwear and highly value added leather goods,’ said M Naser Rahman MP, an industry leader.
   Leaders said many tanneries have turned sick following sudden stoppage of semi-raw leather export in mid 80s.
   They also urged that the government shift Hazaribagh tanneries to the under- construction leather industry estate at Savar, industries should be supported to make up for the losses due to the relocation.
   Barkatullah Bulu, the commerce advisor, Nasir Uddin Pinto, MP of Hazaribagh area, Tipu Sultan and Hurun Chowdhury-leaders of tanners and finished leather processors associations respectively also addressed the function.

The Federation of Bangladesh Chambers of Commerce and Industry has signed an MoU with the Federation of Indian Chambers of Commerce and Industry to promote cooperation and enhance bilateral trade between the two
   countries.
   The FBCCI signed the memorandum of understanding during the visit of the prime minister, Khaleda Zia, to India. A 40- member business delegation led by FBCCI president Mir Nasir Hossain accompanied the prime minister.
   Under the MoU, six task forces were set up on bilateral trade, Indian investment in Bangladesh, trade related infrastructure, removal of trade dispute, non-tariff barriers and activating programmes of Bangladesh-India Chamber of Commerce and Industry.
   These task forces will be co-chaired by leading businessmen from both Bangladesh and India. The task forces will work out time-bound and target oriented plan of action for speedy solution of the problems encountered.
   The business delegation also pointed out various barriers to trade between the two countries including non-tariff barriers, inadequate infrastructural facilities on the Indian side of the land ports.
   ‘Complicated certification procedures, stringent standard requirement, special labelling of jute goods, chemical test for textile, rigid phyto-sanitary requirement for perishable goods and inadequate physical infrastructure were impeding Bangladesh exports to India,’ FBCCI president Mir Nasir Hossain said.
   He also called for setting up committees to look into NTBs, customs issues, harmonization of codes, mutual recognition of certificates and easy opening of bank branches.

Leading drug manufacturer Beximco Pharmaceuticals Limited has launched Oseflu capsule, which, the company claims, will prevent and cure human cases of avian influenza (H5N1) causing bird flu.
   The capsule contains Oseltamivir 75 mg that ensures outstanding efficacy against pandemic strains of influenza including reducing the severity and duration of symptoms and the complications arising from any influenza infection and mortality.
   Regarding the launching of the drug he said, although no bird flu virus is still detected in Bangladesh, the country is at the risk of spreading of this virus as it has been detected in neighbouring India and Myanmar.

The SAARC Secretariat announced the formal enforcement of the South Asian Free Trade Area (SAFTA) agreement with effect from January 1, 2006, said a press release of SAARC Secretariat disseminated in Kathmandu on Wednesday.
   The Agreement on SAFTA was signed in Islamabad on January 6, 2004.
   All the member states have since completed the formalities including depositing of their Instruments of Ratification with the Secretariat. The entry into force of the agreement would be completed by January 1, 2016. The first round of customs duty reduction would take place as agreed by the member states in July and August 2006.
   The Nepalese daily the Rising Nepal quoted the SAARC secretariat that the 12th meeting of the Committee of Experts (CoE) on SAFTA, held in Kathmandu in 2005, successfully concluded the negotiations on the issues like sensitive lists, rules of origin, mechanism for compensation of revenue loss for LDC member states like Bangladesh, Bhutan, Maldives and Nepal and technical assistance to the LDC member states.
   India, Pakistan and Sri Lanka would bring down their customs tariff to 20 per cent by January 01, 2008 and the LDC members-Bangladesh, Bhutan, Maldives and Nepal would reduce their customs tariff to 30 per cent.
   It has also been agreed by the CoE that the first tariff reduction would be effected on July 01, 2006 by all member states with the exception of Nepal which will do so on August 01, 2006.
   It is said that India, Pakistan and Sri Lanka would bring their customs tariff down to the level of 0-5 per cent for the export products of Bangladesh, Bhutan, Maldives and Nepal by January 01, 2009.
   However, Bangladesh Bhutan, Maldives and Nepal are required to do so by January 01, 2016.
   The CoE is to meet once in every six months or more often as necessary. The meeting of the SAFTA Ministerial Council is scheduled to be held in Dhaka on April 20, 2006 preceded by the first CoE meeting on April 18-19, according to the press release.

Country’s lone private airlines GMG Airlines will operate flights to New Delhi and Guwahati very soon, said a top executive of the carrier.
   GMG plans to fly four times a week to the Indian capital as well as launch a daily service from Sylhet to Guwahati, capital of India’s northeastern Assam state.
   ‘We will be flying to Delhi within the next quarter with a Boeing 737-300 ....’ GMG chairman Shahab Sattar told Indian journalists in New Delhi on Wednesday, says a report of Kolkata-based Telegraph newspaper.
   The GMG also wants to increase frequencies between Dhaka and Kolkata, but awaits a bilateral pact to do so, said Sattar disclosing that they were in talks trying to convince the Indian government to lift the cap on flights between Dhaka and West Bengal state capital.
   At present GMG operates three flights weekly between Dhaka and Kolkata.
   Aviation experts feel that GMG’s plans has been bloomed following the advantage of a plan by both the Bangladesh and the Indian governments to give private carriers of two South Asian nations greater freedom over each other’s skies.
   Bangladesh has already cleared India’s Sahara Airline and Jet Air’s plans to link Kolkata with Dhaka through a daily Boeing-737 flight, although the carriers are yet to start regular flights.

Pakistan will help Bangladesh to grow heat resistant wheat and sort duration cotton under an agriculture cooperation agreement between the two countries.
   This was disclosed when the visiting Pakistan minister for food, agriculture and livestock, Sikandar Hayat Khan Bosan, made a courtesy call on the prime minister, Khaleda Zia, at her office Thursday.
   The Pakistan agriculture minister has been visiting Bangladesh as a follow up of the agreement signed between the two countries during the last visit of the prime minister, Khaleda Zia, to Islamabad.
   Under the agreement Bangladesh will help Pakistan in fish and vegetable farming.
   Cooperation in irrigation, water management, sugarcane farming and livestock development were also discussed in the meeting.
   The prime minister welcomed the Pakistan minister and said exchange of such visits will make bilateral cooperation meaningful and effective.
   She requested the minister to convey her best wishes to the president and the prime minister of Pakistan.
   Agriculture minister MK Anwar, prime minister’s principal secretary Kamal Siddiqui and acting high commissioner of Pakistan to Bangladesh Aiyaz Khan were present.

Bangladesh has again failed to reap any benefit from its participation in the largest IT fair of the world – CeBIT fair held in Germany from March 9 to 15.
   Though Export Promotion Bureau has been spending a lot since 1999 on this mission, the outcome is still zero, said EPB sources and several information technology businessmen preferring anonymity.
   Both EPB and Bangladesh Association of Software and Information Services hyped the fair a lot. It was earlier announced that this year nine IT firms from Bangladesh took part in the fair. But only three IT firms assisted by EPB, participated in it. They are Visual Magic Corporation, Daud IT and Reve Systems.
   Mostofa Jabbar, the owner of Ananda Computers said that he had informed BASIS and EPB that he would not participate in the fair but to his surprise he found his name as a participant in the fair in media.
   Other than them, Leads Soft and Doha Infotech participated in the fair from Bangladesh being invited by a Swedish organisation Sippo.
   One EPB official, requesting not to be named said, ‘Bangladesh government managed a special type of visa for the participants and they were found busy in Germany with shopping and touring by train rather than attending the fair.’
   Managing director of InfoSoft Shoeb Chowdhury, who attended CeBIT fair for the fourth time, said the only thing done by this fair is wastage of public money.
   He alleged, ‘BASIS - the IT related institution plays a disappointing role concerning the fair and the participant selection process is not a just one. And as a result, CeBIT fair have been an undone event for Bangladesh so far.’
   Three times participant of the fair, managing director of BDCom said, ‘I do not know any Bangladeshi IT firm has been benefited from CeBIT fair. Yes, you can be acquainted with a lot of foreign IT firms there. But that do not bring any profitable deal. But this fair is very attractive from traveling point of view.’
   Some IT businessmen seeking anonymity told the news agency, ‘India brought deals worth crores of Rupees from this fair but we failed to do so as we did not carry a well-thought plan with us’.
   He suggested Bangladesh should participate in the fair with a stronger team and specific plan and for that, if necessary, it can participate in the fair with an interval of two or three years.

Malaysian government-linked companies have released their key operating targets, in line with efforts to improve their competitiveness to boost economic growth.
   The companies, which include top blue-chips listed on the country’s stock exchange such as Telekom Malaysia and Tenaga Nasional, as well as troubled carmaker Proton, outlined targets for revenue, return on equity and market share for the next two years.
   Top lender Maybank, the country’s biggest bank, said in a statement late Wednesday that it targets a return on equity of at least 18 percent in the year to June 2006, up from 17.4 percent the previous year.
   It also hopes to increase revenue 10 percent annually over the 2006-2008 period.
   State-owned power firm Tenaga is targeting a return on assets of 2.4 percent in 2006 from 2.2 percent in 2005, and is looking to reduce its unplanned outage rate to 5.0 percent from 6.1 percent.
   Telekom said it aims to increase revenue for 2006 to 17 billion ringgit (4.6 billion dollars), up from 13.9 billion ringgit.
   Proton said it hopes to consolidate its sales and distribution network to improve domestic market share to 45.8 percent in the year to March 2007 from an estimated 41.4 percent a year earlier.
   The barely-profitable carmaker also plans to increase exports as a percentage of revenue to 8.6 percent in the next fiscal year from an estimated 5.2 percent in the year to March 2006 well as generate sales growth of 12.4.
   Flag carrier Malaysia Airlines aims to reduce its net loss for 2006 to 620 million ringgit from the 1.27 billion ringgit loss booked in the previous fiscal year spanning the nine-month period to December 2005.
   The nine-month results represent its fiscal 2005 performance as the company changed its financial year-end to December from March beginning last year.

Japan plans to stockpile more rare metals used in high-tech goods because of concern that rising demand from the booming Chinese economy could create supply shortages, a report said Thursday.
   Japan set up a scheme in 1983 to hold emergency reserves of manganese and six other rare metals mainly used in steel products.
   It now intends to widen it to include platinum, indium and rare-earth elements to try to protect the competitiveness of Japan’s high-tech industries, the regional Tokyo Shimbun said without naming its sources.

While Hollywood celebrities and Silicon Valley executives have the cash to pay for
   trendy earth-friendly lifestyles, ordinary people don’t, a US think-tank warned on Wednesday.
   The onus was on businesses worldwide to lead a ‘green’ revolution by sharing technology and costs before authoritarian governments slapped them and citizens with life-altering regulations, according to panel members.
   ‘Perhaps I’m naive, but I don’t think the green con- sumer will be the answer,’ Patrick Atkins, director of energy innovation at Alcoa aluminum company, said during a Global Innovation Outlook forum led by IBM Corporation.
   ‘People need to reach a tipping point at which it clearly effects their lives, and then they will address the problem and galvanize the innovation of the world.’
   Executives from major firms such as Halliburton and Intuit packed an auditorium in the San Francisco Museum of Art, where academics and technology veterans brainstormed solutions to pollution and transportation woes.
   ‘Business has a key role to play,’ said Bjorn Stigson, president of the World Business Council for Sustainable Development.
   ‘Here we are. It is up to us to create a sustainable path in the world. If we don’t, I don’t like where we are going.’

Private carrier GMG Airlines has agreed to be one of the premium partners of Dhaka Travel Mart 2006 scheduled for next month. With this effect, the airlines signed a memorandum of understanding with travel magazine The Bangladesh Monitor on March 21.
   Ismail R Chowdhury, director, marketing and sales, GMG Airlines and Kazi Wahidul Alam, editor, The Bangladesh Monitor and Chairman, DTM 2006, signed the MoU on behalf of their respective sides.
   The Bangladesh Monitor, country’s premier travel trade journal is organising Dhaka Travel Mart 2006, the third international travel fair of the country to promote in and out-bound tourism in the country.
   Ismail R Chowdhury said, ‘People of Bangladesh want to travel, but they do not have information on the country’s different destinations. This is what Dhaka Travel Mart is doing: bringing the consumers and members of the travel, aviation and related trades together.’
   Kazi Wahidul Alam said, ‘We are happy to have GMG Airlines as one of our Premium Partners. Dhaka Travel Mart will definitely benefit with country’s only private sector airline joining us in holding the travel fair.’

China accused the United States on Thursday of severely undermining the world trade system and insisted US policies were to blame for the huge trade deficit between the two nations.
   China’s ambassador to the World Trade Organization, Sun Zhenyu, said in comments carried by the official Xinhua news agency that the United States often failed to comply with WTO rulings by citing national security concerns.
   ‘By interpreting and applying WTO national security clauses in an excessive way, it has again seriously undermined the credibility of the multilateral trade regime,’ Sun was quoted as saying from Geneva.
   Sun criticized the United States for recently imposing restrictions on foreign direct investment on account of apparent national security concerns.
   ‘These have dealt heavy blows to (WTO) members’ confidence in the business environment of the US,’ he said.
   Sun’s comments came as two US senators who have threatened sanctions against China for its trade policies were in China on a fact-finding mission and one month ahead of Chinese President Hu Jintao’s visit to Washington.
   Democrat Chuck Schumer and his Republican colleague Lindsey Graham came to Beijing after co-sponsoring a bill that would impose tariffs of 27.5 percent on Chinese imports unless China took steps to strengthen its currency.
   The senators have argued that the yuan is undervalued by as much as 40 percent against the dollar, making US companies uncompetitive against Chinese rivals. The exchange rate, the senators and other US critics contend, helped to drive up China’s trade surplus with the United States to a record 202 billion dollars last year.
   But Sun repeated Chinese accusations that the US restrictions on exporting high-tech products to China was a significant factor in the bilateral trade imbalance.
   ‘This policy not only harmed the interests of American exporters, but also made the trade deficit situation even worse between the two countries,’ he said.
   Meanwhile, the state-run China Daily newspaper, blamed the United States for the trade deficit.
   ‘Chinese economists side with many overseas peers in their belief that the underlying cause for the US trade deficit was its own flawed policies,’ the paper said in an editorial.

Tokyo land prices rose for the first time in 15 years in 2005, according to a government survey released Thursday that provided fresh evidence Japan is emerging from its deflation doldrums.
   The average price of residential property in Tokyo rose 0.8 percent in 2005 while that of commercial land increased 2.9 percent, according to the survey by the Ministry of Land, Infrastructure and Transport.
   The recovery is being driven by brisk demand for condominiums and office buildings as the world’s number two economy awakens from a decade-long slumber.
   ‘What we are now witnessing is the start of an adjustment in land prices that have fallen far beyond reasonable levels,’ said Junichi Makino, a senior economist at the Daiwa Institute of Research.
   ‘The survey clearly shows that the Japanese economy is now witnessing easing deflationary pressure,’ Makino added.
   The results supported those of an earlier survey released by the ministry in September which showed land prices in the capital had snapped a 15-year losing streak.
   However, the upswing in Tokyo has not spread across the entire country.
   Average land prices for the whole of Japan fell for a 15th straight year in 2005, although at a slower pace, with average
   residential and commercial property prices each down by 2.7 percent, according to the
   latest survey.

EU leaders gather for an economic summit Thursday aimed at giving a shot in the arm to Europe’s long-flagging economy, but resurgent protectionism will cast a long shadow over the talks.
   Plans to forge a joint energy strategy for the 25-nation European Union will also be high on the agenda of the two-day gathering in Brussels.
   While the United States and Japan are enjoying an economic resurgence, much of Europe is still struggling to stimulate growth, with latest figures for last year putting economic expansion in the eurozone at a paltry 1.3 percent.
   EU leaders hope to use the Brussels summit to galvanize efforts to push through reforms such as flexible jobs rules and ever-greater cross-border competition.
   ‘We need to create more job opportunities, particularly for young people trying to enter the market,’ said European Commission chief Jose Manuel Barroso on the eve of the summit.
   But europhiles, already depressed by last year’s French and Dutch rejections of the EU’s first-ever constitution, now lament that the bloc is drifting towards greater protectionism in national economic policy-making.
   A string of cases has underlined this in recent weeks, including Spanish efforts to block a German energy giant’s hostile takeover bid and French machinations to protect Suez from Italian group Enel.
   France is also a key opponent of plans to shake-up Europe’s vast services sector, amid fears that workers from the EU’s poorer ex-communist newcomer states will undercut their western European rivals.
   Tensions over the issue threatened to explode on the eve of the Brussels talks, when Italy, deep in campaigning for elections in just over two weeks, sought support for a draft statement denouncing protectionism.
   The statement was withdrawn barely 24 hours before the summit start, amid warnings that it would sour the atmosphere at a time when the EU needs above all to stay calm and present a united front, after last year’s traumas.
   An EU-wide business group, the European Round Table of Industrialists, lamented that the Union was turning back the clock on the single market, launched in 1993.
   ‘Europe has come a long way but is threatening to stop now that the need to work together is bigger than ever,’ said ERT head and Nokia chief executive Jorma Ollila.
   The EU reform drive is nothing new: the bloc launched its so-called Lisbon Strategy in 2000, at a summit in the Portuguese capital, aiming to become the world’s most competitive knowledge-based economy by the end of the decade.
   That target, set at the giddy height of the dotcom bubble, has been quietly dropped.
   But reform efforts have continued apace, with the complex original Lisbon aims reduced to the blunt goal of ‘Jobs and Growth.

France may be committed to protecting its culture from English and American intrusions but a senior trade official Thursday conceded the Gallic tongue had been overtaken in global business.
   ‘Of course English is the international business language,’ the head of France’s international investment body, Clara Gaymard, told reporters in Sydney.
   Gaymard, who is seeking to attract greater foreign
   investment from China, India, Australia and ASEAN nations, said that investors coming to France did not need to
   learn another language to do business.
   Many French companies such as car manufacturer Renault and gas company Total already held their board meetings in English, she said.
   ‘It’s a new reality; we have to make it known,’ she said.
   Gaymard, who heads the Invest in France Agency, said that France should no longer be seen simply as an Old World nation of wine and cheese lovers but as a highly productive modern economy with a well educated workforce.
   She said that while ‘France is always shown as a country of strikes and demonstrations’, in reality the loss of working days to labour action was much lower than in several other European nations.
   The cost of doing business in France was also less than in the United States, she added.
   Gaymard said she had come to Sydney for two days of meetings with Australian executives because of the growing interest from local investors, particularly in the financial sector, about investing in France.
   Some 80 per cent of Australian investment in Europe currently goes to Britain.
   But Australian investment in France is on the rise, most recently with Macquarie Bank successfully bidding with France’s Eiffage late last year for the privatisation of the Autoroutes Paris-Rhin-Rhone tollway—a deal that will see
   the Australian bank invest some 2.8 billion US dollars in the project.

Japan said Thursday its trade balance had swung back into surplus in February after the first deficit for five years in January as exports soared thanks to a strong global economy and a weaker yen.
   The improvement, which was short of forecasts, still fanned optimism that Japan’s economy is on a firm path to recovery after a slump stretching back over a decade.
   Japan’s trade account showed a surplus of 955.7 billion yen (8.5 billion dollars) last month, 11.8 percent lower than a year ago, the finance ministry said.
   The surplus was below market expectations for about 1.11 trillion yen.
   Exports rose 20.8 percent to 5.85 trillion yen while imports jumped 30.2 percent to 4.90 trillion yen because of high oil import costs. ‘A surge of some 20 percent in exports in February reflects the booming global economy, one example of which is growth in vehicle exports to North America,’ said Koji Kobayashi, senior economist at Mizuho Research Institute.
   ‘Exports are again having a positive impact on growth in the Japanese economy,’ he said.
   Kobayashi said the jump in exports was also partly due to a recovery after a weak January because of the Lunar New Year holidays.
   In February, exports to the United States rose 16.1 percent from a year earlier, with vehicles up 21 percent.
   Exports to the rest of Asia rose 22.5 percent to give a surplus of 757.5 billion yen in February after a deficit of 165.6 billion yen in January.

The state of Ukraine’s economy is a hotly debated issue here ahead of parliamentary polls this weekend, with one side saying it’s in dire straits, the other that it’s never been better, and analysts cautiously optimistic in between.
   Viktor Yanukovych, whose main opposition Regions Party is expected to be the top vote getter during Sunday’s poll, paints a bleak economic picture—in contrast to the growth spurt that occurred before the ‘orange revolution’ in 2004 when he was prime minister.
   He points to gross domestic product (GDP) growth that stood at 2.4 percent in 2005, compared with 12.4 percent the previous year, industrial production that grew by 3.1 percent, compared with 12.5 percent, agricultural production that stayed flat compared to a spectacular spurt of 19.1 percent and rising goods prices.
   ‘Economic policies of these authorities can only be called financial recklessness and economic irresponsibility,’ Yanukovych said recently in Kiev.
   President Viktor Yushchenko, the former central banker who assumed power after leading ‘orange’ protests against a corrupt regime vowing to bring prosperity through reforms, says the economy has never looked better.
   He emphasizes that real wages grew by 20.1 percent last year, compared with 19.6 percent in 2004, that inflation slowed to 10.3 percent, compared with 12.3 percent, and that hard currency reserves have doubled.
   ‘I think that 2005... was one of the mot successful years for Ukraine in areas of the economy and the social sector,’ he said recently.
   Experts, meanwhile, are striking a cautiously optimistic note.
   Yushchenko’s promise of turning Ukraine into a new investement Klondike has not borne fruit, mostly because investors became wary of the government of his former ‘orange revolution’ partner Yulia Tymoshenko and her vows to review past questionable privatizations, and because investors were waiting to see the nation’s political landscape after this weekend’s parliamentary poll.
   ‘Everyone was working with a view... to the legislative election,’ Igor Burakovsky, director of the Institute for Economic Research in Kiev, said recently.
   Analysts say that the slowdown in GDP growth was partly due to external factors—world prices on metals, Ukraine’s main exports, fell during the past year—and point to several positive signs for economic growth since Yushchenko came to power.
   The re-run privatization of Krivorizhstal, the nation’s top steel maker, was hailed for its openness and set a positive precedent, as did the sale of two top Ukrainian banks to European counterparts, they say.
   Furthermore, Ukraine received market economy status from both the European Union and the United States, and signed the key bilateral accord with Washington on its bid to join the World Trade Organization (WTO).
   Finally, the system where business groups close to the former regime were given preferences, stifling competition, has virtually disappeared under Yushchenko’s watch.
   ‘The state is doing the right thing by not interfering in the development of the private sector,’ said Yekaterina Malofeyeva, an analyst with Russia’s Renaissance Capital brokerage in Kiev. ‘It’s very much different here than in Russia, where the Kremlin controls everything.’
   Lastly, analysts say that the sharp increase in gas prices for energy-dependent Ukraine that followed a gas war with Russia earlier this year will in fact force much-needed reforms in one of Europe’s most energy-inefficient countries.
   ‘At low prices Ukraine has not had sufficient incentive to reduce energy intensity and vulnerability to energy supplies,’ the World Bank said in a recent note on Ukraine.

A Thai court Thursday ruled against the government’s plan to privatise the kingdom’s largest utility, saying the energy giant’s planned initial public offering (IPO) would be politically influenced.
   The verdict, which was greeted by an eruption of applause from anti-privatization activists in the courtroom, is another setback for Prime Minister Thaksin Shinawatra, who has invested significant political capital in privatisation.
   The utility’s IPO was initially scheduled for November, in what would have been Thailand’s biggest listing.
   But the court had previously ordered suspending the planned sale of 16 percent of stock, or 1.2 billion shares, worth an estimated 34 billion baht (871 million dollars) following complaints from consumer groups.
   ‘The Supreme Administrative Court ruled that the privatization process of the Electricity Generating Authority of Thailand (EGAT) is illegal,’ the court said.

Japanese Prime Minister Junichiro Koizumi, who has previously opposed a rise in the sales tax, indicated Thursday that a hike may be needed in the future to balance the government budget.
   In an apparent softening of his position, Koizumi called for a full debate on Japan’s current taxation system and how to cut its massive national deficit.
   It was ‘difficult’ to balance the primary budget only by cutting expenditure, Koizumi told a parliamentary session.
   ‘We may have to ask a lot of people to share the burden,’ Koizumi said. ‘I want to deepen discussions on the entire tax system including the consumption tax, income tax, corporate tax and property tax.’
   Koizumi has ruled out raising the sales tax during his administration, which expires in September 2006.

President Roh Moo-Hyun on Thursday pledged his support for a free trade agreement (FTA) with the United States, urging South Koreans to have confidence in an opening market.
   Despite protests here from farmers and others opposed to the FTA, South Korea and the United States have agreed to begin trade talks in June, and hope to conclude them in March next year.
   “We must actively open up our market for growth,” Roh told a town hall meeting carried by South Korean major Internet portals.
   South Korea’s economy relies heavily on exports of auto, ships, memory chips, cell phones and other industrial goods.
   “The US market is important. Let’s make our service sector more competitive by exposing it to openness. Let’s have confidence,” Roh said.
   But South Korean farmers and other critics say an FTA with the US will open the country to cheap imports, driving their farms out of the market.
   Film makers are also angry at the government for halving a protectionist quota for
   homegrown movies, a precondition requested by the United States for the FTA negotiations.
   The quota, which required South Korean cinemas to show domestic movies on at least 146 days a year, will be cut down to 73 days from July 1.

Deadlocked talks between China’s largest steel firm and the globe’s biggest suppliers of iron ore will restart next week without any interference from Beijing, state press reported Thursday.
   The talks on the price of iron ore contracts for the next 12 months will start on Monday, Xinhua news agency said without giving a location, as negotiators race to beat an April 1 deadline.
   Baosteel, which is leading the discussions for all Chinese firms, is trying to secure the cheapest possible price from the world’s three largest exporters—Australia’s Rio Tinto, Anglo-Australian miner BHP Billiton and Brazil’s Companhia Vale do Rio Doc.
   The talks have broken down amid much acrimony with China insisting it will not tolerate a repeat of last year’s arrangement in which Chinese firms agreed to a 71.5 percent hike in the price of the commodity.
   China wants to keep this year’s price rise limited to around 10 percent but mining groups want a sharper rise of up to 30 percent, analysts have said.
   China’s commerce ministry and main economic planning body, the National Development and Reform Commission, said last week the government was prepared to intervene in the talks to ensure a fairer price.
   ‘If the price is at an unacceptable level that cannot be accepted by the Chinese side, (the) Chinese government will take necessary measures to avoid any damage to the interests of the nation and enterprises,’ they said.
   However after much criticism from abroad, including the Australian government, that intervention from Beijing would breach global trade rules, Beijing signalled a more conciliatory note on Thursday.
   ‘The Chinese government continues to express great ‘concern’ for the process and outcome of the talks, but stands by its policy of not directly interfering in the negotiations,’ Xinhua quoted an unidentified official close to the discussions as saying.
   Nevertheless, analysts have said measures could be taken outside the talks, such as denying permission for imports of iron ore above certain price ceilings.
   The government official quoted by Xinhua also said the global suppliers must understand China’s resolve on the price issue.

World oil prices rose on Wednesday following news that US crude stockpiles fell unexpectedly last week, dealers said.
   New York's main contract, light sweet crude for delivery in May, rose by 30 cents to 62.07 dollars per barrel in electronic deals before the market's official opening.
   In London, the price of Brent North Sea crude for May delivery gained 58 cents to 62.08 dollars per barrel in electronic trade.
   The US Department of Energy (DoE) had said on Wednesday that crude oil inventories slipped by 1.3 million barrels last week to total 338.6 million.
   Analysts had bet on a rise of 2.8 million barrels.
   Despite the unexpected fall, oil prices in New York had finished 57 cents lower at 61.77 dollars per barrel on Wednesday.
   'The inventory data ... was bullish, yet the market in New York settled on the downside,' said Purvin and Gertz analyst Victor Shum on Thursday. 'It shows you how unpredictable oil pricing can be from day to day.'
   It was the first time that US crude supplies had fallen since early February, but they are still nearly nine per cent above their levels a year ago.
   Gasoline (petrol) stocks fell by 2.3 million barrels over the week to 221.6 million barrels, the DoE said. Analysts expected them to fall by only one million barrels.

Tamijuddin Textiles showcaused
   The Securities and Exchange Commission has issued show cause cum hearing notice to the directors, managing director and company secretary of Tamijuddin Textiles Mills Ltd for non-submission of half yearly financial statements for the half-year ended on December 31, 2005.
   
   Apex appoints directors
   Apex Footwear has appointed Samson H Chowdhury, chairman of Square Group of Companies as an independent director and Adelehi Sergio (a foreign national and also leading shoe manufacturer of Italy), Niaz Ahmed Choudhury (deputy managing director of Apexpharma Ltd) and Syed Gias Hussain (deputy managing director of the company) as shareholder directors.
   
   Yearly profit
   As per audited accounts as on December 31, 2005, Al-Arafah Islami Bank has reported net profit of Tk 26.29 crore with a positive earning per share of Tk 387.80.
   As per audited accounts as on December 31, 2005, Uttara Finance reported net profit of Tk 19.07 crore with a positive earning per share of Tk 144.50.
   Half-yearly profit
   As per un-audited accounts for the half-year ended December 31, 2005, Perfume Chemical Industries Ltd reported net profit of Tk 0.9 lakh with a positive earning per share of 0.10.
   
   Dividend
   Mutual Trust Bank Ltd has recommended 14 per cent cash
   dividend and 10 per cent stock dividend for the year 2005.
   The annual general meeting of the bank is scheduled to
   be held on May 23 at 11:00 am at Bangladesh-China Friendship Conference Centre at Agargaon in Dhaka. Record Date
   is on April 16. There will be no price limit on the trading
   of the shares of the bank on March 27 following its corporate declaration.
   
   Representative withdrawn
   Hillcity Securities Ltd (CSE member no # 037) has informed that they have withdrawn their authorized representative, Iftekhar Ahmed Mehedi, with effect from March 20.
   * Trading of the shares of United Leasing Company will resume on March 27 after Record Date.
   * Trading of the shares of Prime Finance will remain suspended on record date on March 27.
   * Chittagong Vegetable will be placed in category B from existing category Z with effect from March 27 as the company paid 6 per cent dividend for the financial year 2004-2005.
   Source: DSE, CSE

China Eastern to fly from Dhaka daily
China Eastern Airlines has announced daily Flight between Dhaka-Kunming-Beijing from March 27. China Eastern (MU) flight will leave Dhaka at 1:30 p. m instead of 4:30 p. m to allow most passengers same day connection to other Chinese cities and regional destinations of Far East/Asia, said a press release Thursday. The Airlines has announced new competitive fare effective from March 27. Travel group of 10 persons or above shall enjoy further lower fares, the press release added.
— BSS

Coca-Cola, PepsiCo settle ad lawsuit
PepsiCo Inc.’s Gatorade unit on Wednesday said it reached an agreement with Coca-Cola Co to settle a lawsuit that accused Coke of false advertising in a new campaign for its PowerAde Option sports drink. PepsiCo’s Stokely-Van Camp Inc. subsidiary, which owns the Gatorade sports drink brand, had filed the lawsuit on Monday in US District Court in Chicago.
— Reuters

Hutchison Whampoa profit beats forecast
Hutchison Whampoa, the ports-to-telecoms conglomerate controlled by Hong Kong tycoon Li Ka-shing, Thursday reported an 11 per cent rise in 2005 net profit, just beating forecasts. The company said net profit rose to 14.34 billion dollars (5.1 billion US dollars) from 12.9 billion dollars in 2004, slightly ahead of the market consensus estimate of around 13.90 billion dollars.
— AFP