Trade with top 5 partners
surges 17 per cent
China becomes 2nd; India drops to 4th position
Asjadul Kibria
Bangladesh’s combined bilateral trade with the top five major trading partners during the last fiscal year increased to $11 billion, recording 17 per cent growth over the previous fiscal year.
A report, prepared by the Metropolitan Chamber of Commerce and Industry, showed that in the fiscal year 2005-06 the combined bilateral trade with five major trading partners stood at $10.99 billion, which was $9.4 billion in 2004-05.
In the last fiscal year China became the second largest trading partner of Bangladesh replacing India, which slid to 4th position from 2nd in fiscal year 2004-05, showed the MCCI estimation.
The trade deficit with China soared to around $2 billion in the last fiscal year from $1.86 billion in the previous fiscal mainly due to 28 per cent increase in import from China.
Export to China also increased by 16.9 per cent although the amount was only $65.4 million in the last fiscal year while import amounted to $2.06 billion.
On the other hand, export to India grew 75 per cent to $251.6 million in the last fiscal year against the export worth $144 million in the fiscal year 2004-05.
Provisional estimation also showed that in the fiscal year 2005-06 import from India dropped by 10 per cent to $1.79 billion which was $2 billion in the previous fiscal year.
Thus bilateral trade with India declined to $2.04 billion in the last fiscal year from $2.15 billon in the fiscal year 2004-05.
On the other hand, bilateral trade with China jumped to $2.12 billion from $1.67 billion during the period under review.
‘The prices of Chinese products are more competitive than those of India or other countries, which prompted enhanced import from China,‘ said Zaid Bakht, a research director of the Bangladesh Institute of Development Studies.
‘Our import basket from China is also well diversified due to lower prices of different consumer goods and industrial materials,’ he added.
Zaid was of the view that as Chinese currency is not adequately adjusted against major currencies including dollar, it gave the country additional advantage on price competitiveness.
As per the report, the United States continued as the largest trading partner with trade balance heavily tilted to Bangladesh.
The MCCI report, prepared on the basis of government’s different estimations, showed that bilateral trade with US stood at $3.34 billion in the last fiscal year which was $2.74 billion in the fiscal year 2004-05.
Bangladesh enjoyed a huge trade surplus worth $2.7 billion with the US in the last fiscal year while the figure was $2.1 billion in the previous fiscal.
Bangladesh’s trade with Germany also shot by 30.5 per cent in the last fiscal year mainly due to 31.3 per cent increase in export over the fiscal year 2004-05.
Bangladesh export to Germany soared to $1.77 billion in the last fiscal year from $1.35 billion in the previous fiscal year while import from Germany also surged to $321 million from $258 million, showed the MCCI data.
The United Kingdom remained the fifth largest trading partner of Bangladesh as the total trade with the country rose to $1.38 billion in the last fiscal year from $1.23 billion in the previous fiscal year.
The report also showed that Singapore became the sixth largest trading partner of Bangladesh with $896.2 million two way trade in the last fiscal year.
Japan ranked as seventh followed by France, Italy and South Korea as eighth, ninth and tenth top trading partners of Bangladesh in the last fiscal year.
Thai group mulls $120m investment
Nazmul Ahsan
The Indorama Group of Thailand has expressed its keen interest in investing $120 million in the country’s textile and power sectors, official sources said.
The proposed investment will produce pet resin for bottle, polyester staple fibre and resin for spinning industry to meet the local demand as well as for exporting, according to an investment proposal of the company.
Country’s mineral and beverage industry currently imports pet resin to produce bottles for their products, while polyester stable fibre and pet resin for spinning are also imported from China and Thailand for textile and export-oriented ready-made garments, industry sources said.
The Bangkok-based joint venture company between Thai and Indian investors also proposed to invest in a 50 megawatt power project to help meet the power demand for their proposed industrial units.
The proposed investment will be made in a ‘polyester complex’ by the company, although the venue is yet to be finalised, according to sources.
Indo Poly, previously known as Siam Polyester, was acquired in November 1997 at the height of the Asian financial crisis.
Indorama Group is a leading manufacturer of intermediate products focusing on wool, polyester, pet resin and specialty chemicals, according to the information posted on the web site of the group.
Prior to investment in the country, the management of the group sought a number of fiscal incentives both in customs and taxes, sources in the Board of Investment said.
The National Board of Revenue will have a meeting with the high officials of the company on November 16, where officials from customs, value added tax and income tax along with representatives from the BOI will be present, sources said.
According to the investment proposal, the intending Thailand-based joint venture company wants to make a hundred per cent foreign direct investment worth $120 million with the mentioned sectors.
The company sought zero tariff import duty for its raw materials to be used for the proposed investment and be given the similar fiscal facility for importing capital goods and construction materials to be used for the purpose.
The raw materials for which zero tariff facility was sought include pure terephthalic acid, monoehtylene glycol, isophthalic acid and titanium dioxide.
Currently, an import duty ranging between five and 12 per cent is applicable for the goods concerned.
Furthermore, the Indorama sought the government’s assurance that it would create tariff barriers for the import of similar goods it will produce from its plants.
The Indorama sought 15 years tax holiday for its proposed power plant and eight years for the polyester plant, the proposal said.
The NBR officials, when asked, said they would sit to discuss and apprise the foreign investor concerned on the existing fiscal facilities available in the country for such investment areas.
Free trade drive emerges as
Asia-Pacific summit focus
Agence France-Presse . Hanoi
The drive for free trade emerged Sunday as the early focus of the annual Asia-Pacific forum as senior officials opened a week of talks in Vietnam ahead of a summit of leaders from 21 key economies.
For communist Vietnam, though, the Asia-Pacific Economic Cooperation meeting is perhaps above all a chance for East Asia’s fastest-growing economy after China to underline its arrival on the world stage.
The banners are in place, security has been ramped up and a new convention centre built at a cost of nearly 270 million dollars to host Vietnam’s biggest ever diplomatic event.
It will culminate at the weekend with a summit drawing US president George W Bush—newly weakened after his party’s election pasting—as well as China’s Hu Jintao and Vladimir Putin of Russia.
A delegate said senior officials who met Sunday to haggle over the agenda were weighing up whether to draft a strongly-worded statement for approval on reviving stalled global trade talks.
‘APEC wants to give a push, to give the political will to the Doha round,’ said a Latin American delegate who did not want to be identified, referring to stalled World Trade Organisation talks on breaking down barriers.
Issuing a separate statement—rather than just including the issue in an end-of-summit communique—would underscore the region’s concerns, he added, warning of ‘debilitating consequences’ if not enough was done.
APEC nations are under pressure to consider a US-led drive for a free trade zone that would stretch across the Pacific.
The idea would be to harmonise the ‘noodle bowl’ of existing bilateral and regional free trade deals and offer an alternative if the WTO talks fail.
Meanwhile US, South Korean and Japanese envoys will meet here Wednesday as part of efforts to restart six-nation talks on disarming North Korea.
Separately, according to a diplomatic source, major APEC nations will also hold talks on regional security and political concerns which will include the threat posed by Pyongyang’s nuclear weapons drive.
China, the North’s closest ally, is reportedly blocking attempts to draw up an APEC statement on Pyongyang, feeling it may jeopardise the highly sensitive negotiations on restarting the six-party forum.
The diplomatic spotlight will really come into focus after Wednesday, when foreign and trade ministers gather, and Friday when the leaders convene for a weekend of bilateral and round-table talks.
Global automakers make
inroads into India
Agence France-Presse . New Delhi
France’s Renault has become the latest global automaker to steer towards India as it seeks to make big inroads into one of the world’s fastest-growing vehicle markets.
Renault, seeking to counter falling sales at home, said late last week it would build a plant in India with its Indian partner Mahindra and Mahindra to turn out half million cars a year by 2012.
India offers ‘important opportunities for growth and profitability,’ Renault chief executive Carlos Ghosn said as he announced the plant would assemble the no-frills Logan car.
Renault joined a clutch of big names such as US automaker General Motors, Germany’s Volkswagen and BMW, Japan’s Suzuki and Honda and South Korea’s Hyundai that are stepping on the accelerator to invest in India.
Analysts say it is easy to understand why the rapidly expanding Asian economy with its low-cost production base and population of 1.1 billion looks like the next ‘Promised Land’ for foreign automakers.
While the king of India’s potholed roads was once the bulky Ambassador, based on the 1950s Morris Oxford, economic liberalisation has opened the country to foreign carmakers and meant a host of different models are racing out of showrooms.
Some 1.1 million passenger cars rolled off assembly lines last year and number is forecast to nearly double to two million by 2010, while scooters and motorbicycles sales are forecast to grow from seven million to 12 million units in the same time, according to industry figures.
‘Indian domestic vehicle sales are growing by double-digit figures and when you compare that with anaemic rates in the US and Europe, you see why they’re coming,’ said Dilip Chenoy, head of the Society of Indian Automobiles (Siam).
GM, for instance, just reported flat second-quarter North American sales while car penetration in India is still at an enticingly low eight per 1,000 people compared with 16 in China and 780 in the United States.
An Indian government mission plan said auto manufacturers are aiming for sales of 145 billion dollars in 10 years or average 16 per cent annual growth, up from 36 billion dollars now.
‘This will double the share of the industry in the GDP to over 10 per cent, creating 25 million new jobs,’ said Heavy Industries Minister Santosh Mohan Dev.
Automakers’ hopes have been fired by growing disposable incomes of India’s middle class, estimated to number at least 300 million.
‘The appetite is driven by the local market and the perspective for exports,’ said Abhimanyu Sosat, analyst at Sushil Finance.
At the top end, BMW has announced plans to assemble cars in India for the category of the new rich. But most of the action is at the small car level as automakers target first-time buyers.
Honda plans to triple annual sales to 150,000 by 2010 and pump in 650 million dollars in investment over the next decade, mainly focusing on small cars.
Suzuki, which through its Indian unit Maruti controls 55 per cent of the Indian market, plans to double production to one million by 2010. Toyota says it also plans to sell a small car in India.
Ousted CEOs stay on as
exit deals worked out
Reuters . New York
The stock options scandal has led to the resignations of more than two dozen US executives, but some companies in the crosshairs don’t seem particularly eager to cast off their fallen leaders.
Some corporate chiefs are staying on the payroll for weeks, or longer, after stepping down in the wake of probes into options award practices.
Others have relinquished their executive posts but are being hired temporarily as consultants; deals that advocates of good corporate governance say can be rife with problems regardless of the circumstances of a CEO’s departure.
‘If you are an investor, you have no idea the extent of hours and the value you are getting for this consulting,’ said Louis Malizia, assistant director of the Capital Strategies Department at the International Brotherhood of Teamsters, a frequent critic of lofty CEO pay.
‘It’s very lucrative, and who knows the extent of the work?’ he said. Corporate America’s practice of doling out option grants to top executives is being examined by regulators, the IRS and the US Justice Department. Much of the focus is on backdating, which allows recipients the opportunity to reap extra profits.
When boards allow executives tied to options problems to stay on—even temporarily—they are sending a mixed message to investors about the seriousness of the problem, said Paul Hodgson, an analyst at the Corporate Library, a corporate governance research firm.
‘The whole point of them leaving in the first place is removing the taint of scandal from the company,’ he said. ‘If they are staying on as a consultant, then the taint has not been removed at all.’
In one of the highest-profile executive departures linked to options probes so far, UnitedHealth Group Inc. (NYSE:UNH - news) CEO William McGuire resigned as chairman and as a director last month after the company said it found evidence of backdated options.
But McGuire is keeping the CEO title until on or before December 1. The health insurer is trying to hammer out the terms of his departure, but as of earlier this week it said it still had reached no agreement with him.
No trading at DSE, CSE higher
Staff Correspondent
No share was transacted on the Dhaka Stock Exchange on Sunday as the bourse faced a quorum crisis due to the blockade programme.
Some 50 members logged into the DSE trading system out of 235 members.
‘Some 50 members logged into the trading system in the morning,’ said Salahuddin Ahmed Khan, chief executive officer of the DSE, adding that DSE requires at least 78 online members for starting transaction.
The Chittagong Stock Exchange, however, carried out share transactions valued at Tk 2.57 crore on Sunday, opening trading day of the week. Share prices on the bourse gained on the day.
All shares price index of the CSE gained 11.07 points or 0.32 per cent to close at 3518.24 on Sunday, while benchmark CSE30 advanced by 1.97 points or 0.06 per cent.
Turnover on the port city bourse, however, decreased to Tk 2.57 crore from the Thursday’s total of Tk 26.54 crore.
AB Siddique, chief executive officer of the CSE, said turnover declined as the investors’ turnout was very thin.
A member of the DSE said he expected that the share trading on the bourse would resume today as the first day of the blockade programme ended relatively peaceful.
Earlier, the DSE lost two trading days– October 29 and 30– and the CSE one trading day on October 29 to the blockade programme enforced by the AL-led alliance.
CORPORATE BRIEF
IBBL opens 173rd branch in Jessore
Business Desk
Islami Bank Bangladesh Limited has opened its 173rd branch in Jessore recently.
Abu Sayed Mohammad Sahadat Hussain inaugurated the branch at Chowgacha, Jessore on Wednesday.
The programme was presided over by AKMS Islam, director of the bank, says a press release.
The function was addressed, among others, by Abdur Raquib, executive president and Abul, Bashar Mohd Mofazzal Hussain, senior vice president and head of Khulna Zone, of the bank.
The bank also organised a seminar on ‘Islamic Economics and Banking’ at the bank
premises.
City Bank organises business meet
Business Desk
The City Bank Limited organised a business meeting at a city hotel on Saturday.
The executives of head office, regional managers and managers of branches of the bank attended the meeting.
The chairman of the bank, Deen Mohammad, the vice-chairman, Aziz Al-Kaiser, directors, Hossain Khaled Saifullah, Rafiqul Islam Khan, Mobarak Ali and Mohammad Shoeb, and the managing director (current charge), DH Choudhury, spoke on the occasion.
Fairever now available in Bangladesh
Business Desk
CavinKare, an Indian multinational in FMCG, has launched Fairever fairness cream exclusively for the Bangladeshi customers.
Cavinkare has also appointed MF Consumers Ltd as the distributor for the product, says a press release.
Fairever is a leading fairness cream brand in India as well as in various other countries where CavinKare has a footprint.
After a considerable amount of consumer feedback and R&D, CavinKare has come out with the right formulation for Bangladesh by launching Fairever, which contains orange peel paste, saffron and milk. Combination of the above ingredients especially Saffron helps in increasing fairness along with softening the skin. Fairever is available in SKU’s of 10ml sachet, 25gm and 50gm.
CavinKare is known for its wide and innovative product offering through successful brands like Nyle, Meera, Spinz, Indica and Fairever.
LG-Butterfly opens showroom
Business Desk
LG-Buttefly opened a showroom in Shewrapara in the city on Friday.
The showroom was inaugurated by the chairman and managing director of Butterfly Marketing Ltd, MA Mannan, says a press release.
The director finance, Syed Asaduzzaman, the director marketing and sales, Mustafizur Rahman Shazid, and director of the company, Mahbubur Rahman Sojib, and senior officials of the company were present on the occasion.
Asian currencies mixed
against weaker dollar
Agence France-Presse . Hong Kong
Asian currencies ended the week mixed, with some gaining ground against a weaker greenback, while others struggled as their central banks pondered tighter monetary policies.
JAPANESE YEN: The yen moved narrowly against the dollar in the past week while market players weighed the possibility of an interest rate hike in Japan.
The Japanese currency stood at 117.61-64 to the dollar late Friday, slightly down from 117.27-29 eight days ago. There was no trading on the previous Friday.
The yen hit the week’s high of 117.37 to the dollar at one point on Friday as Bank of Japan Governor Toshihiko Fukui issued a warning in parliament over increasing conversions of yen into other currencies in search of high investment returns, Kyodo News said.
In the so-called yen-carry trade, investors raise funds in yen and then convert them into other currencies for overseas investment. Such transactions have been increasing, as Japanese interest rates are lower than US and eurozone rates.
The yen also got a boost from Fukui’s remarks that he favoured an early rise in interest rates.
But some analysts predicted the dollar was unlikely to fall much further, particularly against the yen, given the higher level of interest rates in the US, compared with Japan.
Dealers were awaiting a batch of economic indicators next week, including Japan’s third-quarter growth figures Tuesday and US consumer prices for October Thursday.
AUSTRALIAN DOLLAR: The Australian dollar was expected to struggle against the greenback this week amid expectations the central bank had tightened monetary policy for the final time in the current cycle, dealers said.
The Australian currency was trading at 76.72 US cents at 5:00 pm Friday (0600 GMT), compared with the previous week’s 77.45 US cents.
Commsec chief equities economist Craig James said the Reserve Bank’s decision to lift interest rates 0.25 points for the third time in six months to a six-year high of 6.25 per cent had been widely anticipated by the market.
He said markets would be closely watching the bank’s half-yearly statement on monetary policy, issued Tuesday, for any hints that backed the prevailing view that rates would not rise again in the immediate future.
James said any indication the bank was adopting a more hands-off approach would leave the Australian dollar flat and could lead to a fall in the currency.
Wal-Mart tries to improve fashion trends
Associated Press . New York
This holiday season, a big challenge at Wal-Mart is convincing shoppers like Portia Goodman and Karen Wade to buy fashion instead of just basics.
‘I buy more at Target than I do here,’ said Goodman, a 31-year-old graduate student from Riverside, Ill., who
was recently shopping for candy at a local Wal-Mart with her son.
‘I think they should be more like Target.’ At Target, known for its cheap chic offerings, Goodman is attracted to apparel by designer Isaac Mizrahi and favors athletic gear by Champion.
As for Wade, a 47-year-old from LaGrange, Ill., she shops at Wal-Mart for ‘shirts and jeans because the price is good.’
Such reluctance from these consumers comes more than a year and a half after Wal-Mart Stores Inc. has worked hard to improve its image with new fashion brands, a trendspotting office in Manhattan, and fashion shows during New York’s Fashion Week.
The company’s fashion faux pas, such as stocking up on too many trendy items like skinny jeans, was a big factor behind disappointing sales for September and October, and is expected to weigh down business in the critical fourth quarter, the company acknowledged late last month.
The upgrading of its fashion is part of the company’s larger campaign to expand into better quality, trendier merchandise to revitalize anemic sales and sluggish profit growth, a strategy that has gotten mixed grades from its customers so far.
Wal-Mart, which has built its reputation on selling basics like socks and detergent, made a push into $2,000 flat-screen TVs and other trendy electronics, 600-thread count sheets and organic foods.
The goal is to pry more money from the hands of its wealthier customers, diversifying beyond its core-low income shoppers who are more vulnerable to economic downturns.
But while the company’s electronics business is ‘making progress,’ organic foods and home furnishings have gotten mixed reactions, according to company’s CEO and president Lee Scott in a recent address to investors.
Huge bill awaits Asia for ‘Iron Silk Road’
Agence France-Presse . Busan, South Korea
Eighteen nations have committed themselves to the huge project of integrating Asia into a single railway network—and now must find a way of footing the bill.
China, Russia and 16 other countries ranging from prosperous South Korea to impoverished Nepal on Friday signed an inter-governmental accord to establish the Trans-Asia Railway, aiming to promote trade and balanced development.
Transport ministers from 41 countries, not all of whom are involved in the railway project, ended a two-day forum Saturday by resolving to explore every avenue of finance for transport needs in general in the Asia-Pacific region.
They vowed to mobilise ‘financial sources for the development of the (entire) transport system, its maintenance and operation from all possible sources, including private-sector partnership and other financial arrangements.’
No one has done detailed costing of the TAR—Laos, for example has no railway tracks at present—but it will certainly be vast. And there are many competing claims for cash in the region.
The UN Economic and Social Commission for Asia and the Pacific, which organised the meeting, forecasts that investment in all infrastructure—not just transport, but power, gas, water, oil and other facilities—will require 224 billion dollars per year in the next 10 years.
But the Bangkok-based agency says funds are already short, even before the TAR gets under way.
‘We have a shortfall now (for all infrastructure projects) which is in excess of 20 billion dollars in the region,’ Barry Cable, director of UNESCAP’s Transport and Tourism Division, told reporters.
But he remained optimistic, saying UNESCAP was closely working with international financial institutions—including the World Bank, the Asian Development Bank and the Islamic Development Bank.
‘They can contribute to the economic development in the region.’
He said undoubtedly the largest financier of infrastructure would be governments, but also stressed a range of other options exists—including private or public-private investment funds.
Asia’s huge savings, deposited mostly in US Treasury bonds and elsewhere in America, could be used to establish an Asian infrastructure fund, he suggested.
‘The fund could perhaps transcend the portfolio of the Asian Development Bank and the World Bank. The fund could perhaps be necessary to establish an infrastructure development bank, something like the ADB and the World Bank, but to focus on infrastructure development,’ Cable said.
The 81,000-kilometre (50,200-mile) TAR network, first mooted by the UN in 1960, is dubbed the ‘Iron Silk Road’ after the ancient trade route. It would link capitals, ports and industrial hubs across 28 Asian countries all the way to Europe.
The network would connect trans-Asian railway networks with Russia and Mongolia in the north, Malaysia and Indonesia in the south, South Korea in the east and Turkey in the west.
UNESCAP chief Kim Hak-Su has said it would ‘link the hinterland areas in the deep interior of the Asian continent with Asia’s bustling maritime cities and European markets’ to ease uneven economic development.
Twelve of the world’s 30 landlocked countries are in Asia.
Continent-wide problems include switching between different gauge tracks, where to stop, how to handle quarantine and immigration paperwork, and how to safely ferry cargo and people across many borders.
But Asia, home to 60 per cent of the world’s population and generating 26 per cent of the world’s economic output, deserves better transport, Kim has said.
It boasts 13 of the world’s top 20 container seaports but has fewer than 100 ‘dry ports’—inland container depots. Europe, by contrast, has 200 and the United States 370.
‘Transport, the inter-connectivity process, provides an opportunity for these inland areas to become part of the new economic growth. But you have to invest in capacity, you have to invest in efficiency and you have to invest in the development of logistics and facilitation,’ Cable said.
G-20 to discuss energy security
Reuters . Canberra
The Group of 20 meeting of finance ministers and central bankers will discuss ways to ensure energy and resource security in light of strong demand from China and India, Australian Treasurer Peter Costello said on Sunday.
Costello will host the G-20 summit in Melbourne on Nov 18 and 19, with finance ministers and central bankers from the world’s biggest economies, including China and India, the United States, Japan and Britain.
Costello said the meeting would bring major oil producing nations Saudi Arabia and Russia together with major customers, including China and India, which are experiencing growing demand for energy and resources.
‘How does the world satisfy those economies that there will be continuity of supply at realistic prices, with no need to lock up supplies, without cartel activity which would rig those international markets?’ Costello told Australian television.
‘If we can get an agreement on adequate supply, adequate security, proper international pricing, then I think we can actually ensure that what could otherwise become jostling and instability over resources over the next couple of decades will be taken out of the system.’
The Australian Bureau of Agriculture and Resource Economics predicts continued strong demand for oil in China, with crude oil consumption forecast to increase 6.5 per cent in 2006 and to rise a further 5.5 per cent in 2007.
Resources demand from India has also increased due to strong economic growth, forecast at 8 per cent in the financial year to the end of March 2007 after hitting 8.4 per cent in 2005/06.
S Korean workers protest at
labour reform bill, FTA
Agence France-Presse . Seoul
Some 30,000 workers rallied here Sunday to protest labour reform bills and free trade talks with the United States as a militant labour union called for a nationwide strike this week.
The Korean Confederation of Trade Unions said it would launch a four-hour strike Wednesday and step up industrial action in coming weeks, unless the government and parliament replied to its demands by Monday.
KCTU is opposed to a new bill, awaiting parliament’s approval, under which businesses would be granted greater freedom to use temporary or part-time workers to cut costs.
The government has insisted the bill would protect the rights of temporary and sub-contracted workers by banning discrimination against them in terms of wages and other conditions.
KCTU, which boasts 800,000 workers, wants new legislation to protect the labour rights of 5.5 million non-regular workers, including temporary and part-time workers.
The International Monetary Fund said such workers in South Korea accounted for 37 per cent of the country’s workforce, 2.5 times higher than the average for OECD (Organization for Economic Cooperation and Development) countries.
‘Let’s go for a general strike,’ chanted the crowd as they rallied on a plaza next to City Hall, while some 9,000 riot policemen armed with shields positioned themselves on nearby street corners.
ASEAN untapped by international investment community
Agence France-Presse . Manila
Despite a potential market of some 600 million people, the ASEAN region is still largely untapped by the international business community, business leaders say.
In the four years from 2001 to 2005 some 50 billion flowed into the Association of Southeast Asian Nations region compared to 274 billion to China, according to the Manila-based Asian Development Bank.
Total net foreign direct investment into the region last year amounted to 23.9 billion dollars of which 60 per cent went to the island state of Singapore.
‘Compare this to the 60 billion dollars invested in China last year and you get some idea what the region is up against,’ says economist and president of the Philippine Business Leaders Forum, Michael Clancy.
‘Business has failed to focus on the opportunities that a common ASEAN market will create,’ Clancy said. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Clancy’s group, which is a country associate of the Economist Intelligence Unit, will manage this year’s ASEAN Business and Investment Summit (ASEAN-BIS) in the central city of Cebu next month.
Established four years ago by the ASEAN leaders it now forms an integral part of the annual summit.
Donald Dee, head of the Philippine Chamber of Commerce and Industry (PCCI) and national host of the ASEAN-BIS said: ‘ASEAN is on the way to becoming a common market of almost 600 million consumers.’
He said structural changes put in place in recent years coupled with the quickening pace of ASEAN economic and political integration is making the region an attractive investment destination with its young and growing population.
This year, for the first time, the ASEAN business leaders summit will open its doors to the wider global business community.
‘Our intention is to be inclusive rather than exclusive,’ Dee said.
‘Multinationals and other foreign businesses operating within ASEAN are legitimate stakeholders in developments within the region and we want them to contribute to the dialogue process,’ Dee added.
According to Clancy, the achievements and opportunities of Southeast Asia, dominated by ASEAN, tend to be neglected in the boardrooms of London, New York and Dubai.
Despite China’s overcapacity it is still attractive to investors, but China has failed to deliver on its early promises and the expected consumer market continues to elude major corporations, he says.
The rapid rise of local firms has meant that for many global companies seeking a slice of the Chinese market an investment in China has meant falling prices, falling margins and in some cases total loss of competitiveness.
‘Many companies are finding that there is a hidden cost of doing business in China,’ Clancy said.
‘One survey recently suggested that many companies were worried about their inability to conduct due diligence on local partners or suppliers.
‘Cost and quality of living for expatriate staff remains a problem and finding and retaining talent is a growing problem.
‘Problems of intellectual property protection abound and supply chain management is also a major concern for many companies,’ Clancy said.
‘Increasingly, global companies are coming to the realization that while an Asian presence is essential to their global growth strategy, total reliance on either China or India to provide that presence is undesirable.
Ford CEO says ahead of
schedule on buyouts
Reuters . Detroit
Ford Motor Co. is ‘a little bit ahead’ of schedule in settling buyout offers with its 75,000 unionized factory workers, the automaker’s chief executive told the Detroit Free Press in an interview published on Saturday.
Alan Mulally, who took over as Ford’s top executive about six weeks ago, was also quoted by the Detroit News as saying that the embattled No. 2 US carmaker needs to make its North American operations profitable by 2009.
‘We have got to turn around North America and be profitable by 2009,’ Mulally was quoted as saying. ‘Because if not, you just keep losing cash and pretty soon you run out.’
Both interviews were given on Friday, according to the newspapers.
All of Ford’s blue-collar workers represented by the United Auto Workers union have been offered buyout packages to leave the company’s payroll. Those offers, which are central to Ford’s plan to cut costs in response to its sliding market share, are open to consideration until Nov. 27.
‘I would say we are a little bit ahead (of schedule),’ Mulally told the Detroit Free Press. ‘We’re getting a really good response about the way we’re doing it and that they have choices and they can do it in a timely manner and move on or stay.’
Microcredit helps a New York
immigrant succeed
Agence France-Presse . New York
Shunned by banks and nursing a bad credit history, Rhoda Lohier is living her dream of running a small New York beauty salon, thanks to an innovative ‘microcredit’ programme.
The small loans granted to Lohier by Project Enterprise, a US foundation that works on combating poverty, helped her expand her budding beauty business, and enabled her to repair equipment and purchase a new machine.
However, Lohier, an immigrant from Haiti, says the microcredit programme has not only given her much needed seed finance, but also boosted her pride and confidence.
‘It is priceless,’ she says of the revolutionary programme.
Tiny business loans known as microcredit have been around for some thirty odd years, but are more common in developing countries than the world’s richest nation.
Interest in using such loans to help people step up the economic ladder and build a small business, however, has mounted since Muhammad Yunus, who is considered the ‘godfather’ of microcredit, won the Nobel Peace Prize in mid-October.
Yunus was to join several thousand delegates for the second Global Microcredit Summit in Halifax, Canada from November 12-15 at an international meeting which will also be attended by government leaders and microfinance specialists.
Campaigners believe microcredit can help lift tens of millions of the world’s poorest people out of poverty.
Yunus’s microcredit Grameen bank has made millions of loans in his native Bangladesh, but the success of offering small loans to help aspiring business people has spread to Manhattan.
‘It’s much more than the 50-dollar loan you get in Bangladesh to buy a cow ... but it allows immigrants to start a business without the credit history issue,’ Lohier explains of the loans she has received.
‘I had a very bad credit history,’ she says, adding ‘when you’re a small business, it’s your personal credit that matters, and I didn’t have a lot of collateral.’
Individuals do not normally have to offer collateral in order to gain microcredit.
Lohier says she set up her beauty business, primarily for black women, after she got fed up with experiencing bad treatments.
Beijing mulls ‘underground town’
Agence France-Presse . Beijing
Beijing planned to direct some of its frenetic development underground to ease congestion and other urban growing pains plaguing the city, state media reported Sunday.
City planners have identified 17 key areas of the city for subterranean development, and envision an eventual ‘underground town’ spanning 90 million square meters by 2020, Xinhua news agency said.
The plan would quadruple the amount of underground space now being utilized in the city, which is currently at about 30 million square meters, Xinhua quoted Shi Xiaodong, a designer with the Beijing Municipal Institute of City Planning and Design, as saying.
The plan would help ease traffic congestion, tensions over land use in downtown areas, and environmental problems, Xinhua reported.
The areas targeted for subsurface development included the thriving Wanfujing shopping area and the bustling central business district.
Underground floor space had expanded by three million square meters in Beijing annually, and accounted for 10 per cent of the city’s total floor space completed each year, Shi said.
About 30 per cent of the new space developed annually was used for commercial and cultural purposes, with the rest devoted to parking and other traffic use, Xinhua said.
France sees brisk rise in trade with India
Reuters . New Delhi
France and India are likely to surpass a target to take their two-way trade to 8 billion euros a year by 2010, the French ambassador to New Delhi said on Friday.
Dominique Girard said small and medium enterprises would fuel the growth as they were keen to tap India’s booming market.
‘I think this will be reached ahead of target as our trade with India is already growing by more than 26 per cent (annually),’ Girard told Reuters on the sidelines of a conference.
The two countries had set a target of doubling trade in five years during French President Jacques Chirac’s India visit in February.
India’s exports to France - at about 2.2 billion euros - are mainly textiles, farm and marine products, chemicals, metals and gems and jewellery. It imports goods worth 1.8 billion euros, mainly machinery, transport equipment and iron and steel.
The envoy said French firms were planning major investments in India’s nuclear energy, space technology, infrastructure, automobiles, IT, pharmaceuticals and agri-business sectors.
Tata group eyes more
opportunities in China
Reuters . Mumbai
Tata Sons, the holding company of the salt-to-software Tata group, has set up a liaison office in Shanghai to scout for more opportunities for its group companies, a senior company official said on Friday.
‘The idea is to improve connectivity,’ said R Gopalakrishnan, an executive director of Tata Sons.
‘We already have a presence in China through some of our companies, now we are looking at increasing our presence in these areas and entering new areas,’ he said.
These could include hotels, auto, software services, steel and chemicals, he said.
‘We would look at China as a market and as a competitive sourcing base,’ he said.
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BIZLINE
Warid, GP sign interconnection agreement
The Warid Telecom International Limited has recently signed an interconnection agreement with the Grameen Phone Limited. The chief executive officer of Warid, Muneer Farooqui, and the managing director of Grameen Phone, Erik Aas, signed the agreement on behalf of their respective companies, said a press release Sunday. The interconnection agreement will facilitate subscribers of both operators to have clear and uninterrupted access between the networks when they will be formally in operation.
— BSS
BSB wide area network
inaugurated
Functions of 14 branches and three regional offices of Bangladesh Shilpa Bank have come under the wide area network to facilitate information exchange process between the branches and head office easier. The chairman of the board of directors of the bank, Prof Abu Ahmed, Sunday inaugurated the network, set up in cooperation with BD Ltd, said a BSB press release. The managing director, Mokhtar Hossain, and the general managers, Dr Nazmul Bari, Imran Hossain, AKM Nazrul Islam, M Khalilur Rahman Chowdhury and M Khorshed Alam and the assistant general manager, FM Mohiuddin, were present in the function.
— UNB
Eurozone figures
to show
robust growth
Economic data to be released this week are expected to highlight continued robust growth in the 12-nation eurozone, underpinned by recovering sentiment in Germany and tame inflation. Third-quarter eurozone gross domestic product is forecast to have risen a provisional 0.7 per cent from the second quarter and 2.8 per cent year-on-year. Respective second quarter figures were 0.9 per cent and 2.7 per cent.
— AFP
Vietnamese in
US eye home
investments
Vietnam’s emerging economy, boosted this week by an invitation to join the World Trade Organisation, many Vietnamese in the US are openly discussing business opportunities in their old country. The shift reflects the growing support among many Vietnamese-Americans for strengthening economic ties with Vietnam, even as some continue to criticise the country’s human rights violations and deep-seated corruption.
— AP
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