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The Bangladesh Petroleum Corporation on Thursday said that, because of the higher prices of fuel oils in international market, it would be impossible to continue fuel import if the government did not increase prices in local market or provide subsidy.
   The BPC has fallen into deep trouble as fuel oil prices in the international market have been increasing almost every day for the last few days.
   The BPC’s chairman, Anwarul Karim, on Thursday met the energy secretary, AMM Nasir Uddin, and told him that BPC was facing huge difficulty in importing fuels because of the soaring prices in the international market and the huge loss it has been incurring by selling fuel oils in the local market at prices lower than the import cost.
   ‘It will be impossible to continue fuel import if prices are not increased in the local market or no subsidy is given to the BPC,’ he was learnt to have told the secretary at the informal meeting.
   The BPC’s monthly loss might cross Tk 250 crore this month as the prices of two major fuel oils — diesel and kerosene — have increased by around $20 per barrel in the international market since the prices of these fuels were increased in the local market in April, said sources in the energy division.
   The BPC incurred a loss of around Tk 160 crore in June, Tk 217 crore in July and Tk 240 crore in August as the oil prices continued to soar every month. The BPC sells diesel and kerosene at prices lower than the import cost.
   The price of crude oil in the international market hit a record high of $82.51 per barrel on Wednesday before dipping to $81.82 on Thursday. The BPC mostly imports refined diesel and kerosene, the prices of which are usually $10 higher than that of crude oil.
   The BPC every year imports around 18 lakh tonnes of diesel, 3 to 4 lakh tonnes of kerosene and 1.5 lakh tonnes of octane from Kuwait and India, and produces around 3.5 lakh tonnes of diesel, 1 to 2 lakh tonnes of kerosene and 1.5 lakh tonnes of petrol by refining imported crude oil at the Eastern Refinery.
   The crude oil price was around $60-$64 per barrel in the international market when the BPC increased the price of diesel and kerosene to Tk 40 from Tk 33 per litre in April.
   The BPC’s import cost of diesel and kerosene, including carrying and other charges and government taxes, was around $75 per barrel at that time.
   The BPC had hoped that its monthly loss would be reduced to around Tk 30 crore with the large price-hike of diesel and kerosene in the local market in April as it estimated that the loss in selling each litre of diesel and kerosene, after paying the government Tk 7-8 as tax, would be only Tk 1.
   But as per the BPC’s estimate the loss it incurred in selling diesel stood at Tk 12.64 per litre on September as the import cost of per barrel of diesel was $94.97, and in selling kerosene the loss was Tk 11.70 as the import cost was $93.80 per barrel.
   ‘After September 17, the crude oil price increased by $2 per barrel in the international market, so today BPC’s loss has increased further. If the current trend of fuel price increase continues in the international market, the overall loss of BPC this month will cross Tk 250 crore,’ said an energy official.
   He said that the energy division would again remind the finance ministry of its request to provide BPC Tk 2,200 crore to continue fuel oil import as the government is unlikely to increase fuel oil prices at present because of Ramadan and the high inflation rate.
   ‘We sent a proposal to the finance ministry, in the first half of August, either to increase fuel oil prices or to provide BPC Tk 2,200 crore for continuing fuel supply. But no action has been taken so far,’ he said.
   Energy secretary AMM Nasir Uddin told New Age that they were extremely worried over the soaring prices of fuel oils in the international market. ‘The BPC is passing through a hard time as it is incurring a huge loss in selling fuel at present prices in the local market as well as repaying its outstanding loans to the banks,’ he said, adding that they would discuss the issue with the finance ministry.

Stocks gained on Thursday for the second consecutive day due to fresh buying from the institutional investors after bear run in the first three days of the week, said market analysts.
   The general index of the Dhaka Stock Exchange gained 39.38 points or 1.57 per cent to close at 2554, while its blue chips index, DSE20, advanced by 47.23 points or 2.36 per cent to close at 2045.79.
   Chittagong Stock Exchange’s selective categories index gained 58.28 points or 1.38 per cent to close at 4269.65, while its blue chips index, CSE30, advanced by 94.27 points or 1.62 per cent to finish at 5911.76.
   ‘Recently the market has found a support level at 2500 points and a resistance level at 2600 points,’ said Yawer Sayeed, a stock market analyst, referring to the movement of the DSE benchmark index.
   Sayeed, also managing director of Aims of Bangladesh, said market found buyers at the support level and sellers at the resistance level.
   In the short or medium run, market movement should be between the levels, he forecasted.
   Strong participation of institutional investors has resulted in some sort of maturity of the market, he said.
   Salahuddin Ahmed Khan, chief executive officer of the DSE, said market saw fresh buying from the institutional investors after a bearish trend in the first three days of the week.
   Of the total 200 issues traded at the DSE floor on Thursday, 123 advanced, 62 declined and 15 remained unchanged, and out of 98 issues traded at the CSE floor, 57 advanced, 35 declined and six remained unchanged.
   Turnover at the DSE also increased to Tk 176.65 crore from the Wednesday’s Tk 127.26 crore and CSE turnover went up to Tk 21.53 crore from Tk 16.53 crore.
   Summit Power topped the turnover leaders at the DSE with total transaction of Tk 15.21 crore. Other turnover leaders at the prime bourse were Prime Bank, BRAC Bank, Power Grid Company Bangladesh, United Commercial Bank, Dhaka Electric Supply Company, AB Bank, Grameen Mutual Fund One, Aims 1st Mutual Fund and Southeast Bank.

Citi Foundation, a philanthropic arm of Citigroup, launched Citi Micro Entrepreneurship Awards-2007 at a press conference in National Press Club in Dhaka on Thursday.
   ‘Under the programme, Best Innovative Business of the Year, Best Woman Micro Entrepreneur of the Year, Best Micro Entrepreneur of the Year, and Best Microfinance Institution of the Year, will be awarded,’ said economist Wahiduddin Mahmud, chairman of a 15-member advisory council formed to guide the award process.
   Objective of the awards programme is to encourage micro entrepreneurs and micro finance institutions, said Wahiduddin, also chairman of Palli Karma-Sahayak Foundation.
   Citibank and Shakti Foundation will manage the awards and Shakti Foundation will act as secretariat of the awards programme, said Mamun Rashid, managing director and Citigroup country officer, Bangladesh.
   Winners will receive Tk 3 lakh each as prize money, he said.
   He said Citi Foundation introduced the awards in 2005. The foundation awarded four individuals/institutions in 2005 and five individuals/institutions in 2006 under the awards programme, he said.
   Advisory council members Akbar Ali Khan, former adviser to the caretaker government, Abu Ahmed, professor of economics at Dhaka University, M Nurul Islam, regional senior vice-president of ALICO of Middle East, Africa and South Asia-East region, Sarwar Ahmed, managing director of Syngenta Bangladesh Ltd, and Mahbub Hosain, executive director of BRAC, were present at the press conference.
   Mamun Rashid said the nomination process of the awards programme would start from September 25 and continue up-to November 8.
   The awards are expected to be announced at the end of December or early next year, he added.

The expert-level BIMSTEC trade negotiating committee will resume deliberations in Dhaka on September 24 to 26 after a long break, official sources said on Thursday.
   Commerce secretary Feroz Ahmed will open the first session of the trade negotiating committee at a local hotel. The seven-member Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation is negotiating a free trade agreement for the region for quite some time.
   As per the previous decision of the heads of state and government of the member states, the free trade zone was scheduled to be officially launched on July 1 this year.
   The member states - Bangladesh, India, Myanmar, Sri Lanka, Thailand, Nepal and Bhutan - have joined hands to set up the free trade zone for faster trade integration and economic development in the region.
   Of them, Nepal and Bhutan joined the bandwagon at a later stage. The move for a free trade zone, however, was apparently stalled last year following the political changeovers in Thailand and subsequent changes in Bangladesh.
   But the initiative to hold the meeting of the trade negotiating committee in Dhaka this month indicates that the regional leadership has decided again to go ahead with the free trade agreement.
   The most important contribution that the trade negotiating committee this time can make is to bring the process back on the track. It may help work out a timeline when the free trade zone will become operative, the sources said.
   Experts from the member states will attend the forthcoming meeting - to be the 15th such meeting - to resume discussion on various technical issues to pave the way for finalising the free trade deal.
   The meeting here will take up the issues from the points where they were left in the previous meeting held in New Delhi early last year, said the sources.
   These will include rules of origin, negative list of products of individual member states, local value addition content of exportable products, customs formalities and arbitration modalities.

Further liberalisation of global agriculture trade will make food grains further costlier for net importing countries like Bangladesh and worsen the poverty situation, economists warned.
   About 3.74 lakh new households will be plunged into poverty in the short term and 5.99 lakh new households will become poverty-stricken in the long term due to global agriculture liberalisation, said Selim Raihan, economics professor of Dhaka University who co-authored two research books with his colleague Abdur Razzaque.
   The country, as a net importer of farm products, will also face welfare loss of $56.5 million if there is full agriculture trade liberalisation, but India’s welfare gain will be $1,125 million as it is a net exporter, the research works show.
   But the things may turn positive if Bangladesh gets wider duty-free and quota-free market access to developed countries, the researchers felt.
   The books — ‘Multilateral and Regional Trade Negotiations: Quantitative Assessments of Potential Implications on Bangladesh’ and ‘Trade and Industrial Policy Environment in Bangladesh with Especial Reference to Some Non-Traditional Export Sectors’ —were launched Thursday at the CIRDAP auditorium. The research works on the WTO and trade policy of Bangladesh were sponsored by the UNDP Regional Centre in Colombo.
   Launching the books, senior economist Wahiduddin Mahmud said the prices of agriculture commodities would increase in the future.
   He said the prices of wheat, oil seed, pulse, soybean are on the rise in the ‘futures market’, where traders make agreements fixing the price and a future date of delivery.
   He pointed out that Bangladesh can become self-sufficient in food production but it may not be able to export food items due to land shortage.
   Professor Selim Raihan said that liberalisation of the global agriculture trade will make poverty in Bangladesh more acute as the country is a net importer of food items.
   The developed countries will import more from developing countries if global tariff is reduced and agriculture subsidies are eliminated, but Bangladesh will not be benefited since it has to import food-grains and other agriculture items, said Professor Selim Raihan.
   Economist Atiur Rahman said that even partial liberalisation will cause welfare loss and increase poverty in Bangladesh.
   ‘This stands against the notion of inclusive growth so ardently propagated by most world bodies including the WTO,’ said Atiur, who chairs Unnayan Shamannay, a local research organisation.
   Citing statistics, he pointed out that 68 per cent of the rural households go to the market to buy food.
   Since Bangladesh is a net importer, these rural buyers will have to pay higher price of imported food grains, he said.
   Selim Raihan said that if the country gets duty-free and quota-free market access to the developed world, then it will be benefited by $548 million at 1995 base prices.
   In the short run 1.14 lakh households will rise above poverty and in the long run 2.53 lakh households will get rid of poverty, he said.
   The programme was attended by former lawmakers, academics, researchers and students.

The Bangladesh Bank Thursday asked Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank to expedite disbursement of agriculture loans to help recover crop losses due to flood.
   ‘The two banks could not yet disburse loans as per their targets,’ a review meeting at the central bank was told. BB governor Salehuddin Ahmed chaired the meeting with chief executive officers of the two banks. Senior central bank officials were present.
   The Bangladesh Bank has decided to provide BKB with a funding facility of Tk 300 crore and RUKUB with Tk 150 crore to help achieve them their credit disbursement targets, a senior Bangladesh Bank official told the news agency.
   The central bank has warned the CEOs of the two banks that they would have to take the responsibility of any irregularity relating to agriculture loan disbursement.

RQM Forkan has recently joined the Prime Bank Limited as its deputy managing director.
   Prior to joining the Prime Bank, he was senior executive vice-president and chief operating officer of the Arab Bangladesh Bank Limited, said a press release.
   Forkan has a banking career of more than 33 years and he works in almost every areas of banking operations.
   He also worked with Eastern Bank Ltd as an executive vice-president and CEO for about three years since 2001.
   He started his banking career with the Grindlays Bank in 1973 and worked for 25 years in all the key areas of banking functions.
   During his long banking career, he visited many countries and had obtained exposure in the modern concepts of banking operations.

The forward-looking index of leading economic indicators fell 0.6 per cent in August, the Conference Board said Thursday, suggesting the housing and credit woes are taking an economic toll.
   The business research group said in its index of leading economic indicators, a gauge of activity in the coming six to nine months, fell to 137.8 after a revised increased of 0.7 per cent in July.
   The figure was worse than expected on Wall Street, where analysts had called for a stable reading.
   Ken Goldstein, a Conference Board economist, said he still expects economic growth to continue, albeit at a slow pace, but that there are ‘potential problems to overcome.’

China is unlikely to see slower economic growth even if it decides to make its currency, the yuan, more flexible, a senior US official said Thursday in Beijing.
   ‘For China, more currency flexibility will not restrain growth, nor will it lead to deflation,’ David McCormick, the US treasury under secretary for international affairs, said in a speech delivered at Peking University.
   ‘What currency flexibility will do for China is support and in fact be a necessary component of a growth strategy that brings higher consumption to Chinese households and more balanced, harmonious, and sustainable growth.’
   A stronger currency will mean better incentives for Chinese companies to produce for Chinese consumers, he argued.
   ‘By encouraging employment growth in less capital-intensive domestic-oriented industries, exchange rate appreciation will open up new opportunities for low and un-skilled workers,’ he said.
   China has been the target of intense criticism from the United States over the value of the yuan, with claims that the Chinese currency is massively undervalued to give Chinese exporters an unfair advantage.
   China de-linked the yuan from the US dollar in 2005, and has since allowed it to rise nearly 10 per cent against the greenback, a pace many Americans consider too slow.
   Meanwhile, a strengthening Chinese currency will cause the price of imports to fall, lessening inflationary pressure, McCormick argued.
   At the same time, currency reform will give Chinese policymakers greater freedom to use monetary policy to maintain price stability and avoid asset bubbles, he said.
   ‘This is of particular significance given China’s recent acceleration of inflation,’ he said.

Japan’s top executives have become more confident for the first time in a year, a survey showed Thursday, providing some welcome good news on Asia’s largest economy after a slew of gloomy data.
   The government said its index of business confidence among large Japanese companies rebounded to 6.2 in the three months to September from minus 0.9 per cent in the previous quarter.
   The index had now returned to the same level as the first quarter of the 2007 but it remains below a high of 10.5 seen a year ago.
   It was also well short of a figure of 12 predicted by respondents in the previous survey.
   Analysts gave the rebound a cautious welcome, noting that the survey was taken after credit turmoil erupted on global financial markets due to the fallout from rising defaults in US sub-prime mortgages to risky borrowers.
   But they said that the central bank’s survey of business confidence, known as the Tankan, which is more closely watched, may still reveal a weakening of business confidence next month as the index is calculated differently.
   ‘Today’s survey at least confirmed that the key basis for the economic recovery in Japan has not fallen apart,’ said Mamoru Yamazaki, chief economist at RBS Securities.
   ‘But given the subsequent spread of the sub-prime loan problem, the appreciation of the yen and emerging concerns about the US economy in the wake of a poor US jobs report, the headline number for large manufacturers is likely to decline in the September Tankan survey,’ Yamazaki said.
   The finance ministry said it was unclear whether the sub-prime loan problems and the stronger yen had affected the result of its survey.
   ‘We think that the underlying solid trend in the corporate sector is intact, given increased shortage in labor and the fact that companies still see profit growth,’ a ministry official said.
   The index is calculated by subtracting the percentage of large firms reporting worsening business conditions from the percentage of those reporting an improvement.
   Respondents expect the headline index to rise further to 9.2 in the fourth quarter, but to dip to 8.6 in the first quarter of next year.
   Concerns about the health of the Japanese economy have grown since the government reported gross domestic product shrank in the three months to June for the first time in three quarters due to falling corporate capital spending.
   Japan’s combined capital investment is now expected to expand by 1.5 per cent in 2007, less than half the 3.3 per cent rise predicted in the previous survey, the finance ministry said.
   The survey covered 14,567 companies, of which 78.5 per cent responded.

China, facing the spectre of inflation, has frozen the prices of key products subject to government price controls or regulation, the nation’s top planner announced.
   ‘In principle, there will be no new price-raising measures this year,’ said a statement posted on the website of the National Development and Reform Commission.
   The vast majority of prices are outside government control in China, but the measure is nevertheless likely to affect important items for which the central government still sets the price, such as water, electricity and oil products.
   The statement said that any unauthorized price hikes on such goods or services are strictly forbidden.
   China, which only a few years ago was concerned about falling prices, is now faced with inflation rates not recorded for years.
   The consumer price index rose 6.5 per cent year-on-year in August, the highest monthly rate in a decade.
   For the full year, China’s inflation is expected to hit 4.2 per cent, well above a government target of three per cent, the Asian Development Bank said earlier this week.
   Inflation is becoming a more salient issue as China’s ruling Communist party prepares to hold a key meeting to select top officials for the party and government for the next five years.
   Price stability in the run-up to the 17th Party Congress is widely seen as a top policy objective, as inflation has historically been a major source of public discontent.
   Soaring food prices, and especially the price of China’s favourite meat pork, have been widely blamed for the steep spike in inflation.
   However, the higher prices are also seen as reflections of more general issues in the economy, including bottlenecks emerging in an economy that is seeing double-digit growth for the fifth consecutive year.
   ‘The consumer price index is a kind of barometer for the economy as a whole, and it’s closely linked to investment and industrial production,’ said Qi Jingmei, an economist at the State Information Center, a think tank.
   Even if price controls do nothing to dismantle bottlenecks, they will keep local governments from price hikes that have no solid base in supply and demand conditions, she argued.
   ‘It serves as a warning to the local governments to be cautious on price rises. The message is, ‘Don’t raise the price because the government next door is doing it’.’
   Price controls are considered a somewhat old-fashioned policy tool in China’s increasingly free-wheeling market economy, and the jury was still out on whether they would have any real effect.
   ‘It’s by no means certain that this will be enough to stop consumer prices from continuing their rise,’ said Shi Lei, a Beijing-based macroeconomist with TX Consulting.

The United States is prepared to negotiate a multilateral trade deal on the basis of a WTO proposal calling for big cuts in agriculture subsidies, a government official said Wednesday.
   But a spokeswoman for the office of the US trade representative, Sean Spicer, said other countries ‘must step up to ensure the strongest possible market access outcomes’ in agriculture as well as manufacturing and services.
   The comments in Washington came after a high ranking WTO official said in Geneva that US officials had accepted WTO proposals as a basis for negotiations.
   ‘They said they were prepared to negotiate within the range of numbers put forward in the agriculture paper, provided everybody else would work within the same parameters,’ said the WTO’s chief agriculture negotiator, New Zealand ambassador Crawford Falconer.
   In July, Falconer published a series of proposals for WTO members which suggested that the United States reduce its agricultural subsidies to between 12.8 to 16.2 billion dollars.
   Washington had previously refused to cut its farm support to below 23 billion dollars.
   The proposals from Falconer aim to unblock stalled global talks on a new trade agreement, known as the Doha trade talks.
   In Washington, Spicer said Washington made its intentions known at the recent summit of APEC Asia-Pacific Cooperation members.
   ‘The US is committed to a balanced and ambitious outcome,’ he said in a statement.
   ‘We made it clear at APEC that we are prepared to negotiate on the basis of the current agriculture and industrial good texts in Geneva. The US will lead but others must step up to ensure the strongest possible market access outcomes implied by the texts in agriculture, manufacturing and in the services negotiations.’

The European Union on Thursday welcomed as a ‘positive move’ what it saw as a new US willingness to negotiate in world trade talks, raising hopes of progress in the Doha round of negotiations.
   ‘It’s a positive move which we welcome,’ said the spokesman for EU trade commissioner Peter Mandelson, who represents the 27-country bloc in the World Trade Organisation talks.
   The spokesman, Peter Power, said it demonstrated a ‘US commitment to negotiate on the basis of the Geneva text and we urge all partners to do likewise.’
   ‘Unless the US is committed then there is no future,’ he said.
   In Geneva Wednesday, WTO chief agriculture negotiator, New Zealand ambassador Crawford Falconer, said the United States had accepted a proposal by the WTO for cutting state subsidies in the agricultural sector.
   The Doha negotiating round, aimed at tearing down trade barriers, was launched in 2001 and was meant to have been concluded by 2004 with a new global deal to increase trade to the benefit of poor countries.

The United States on Wednesday showed a new willingness to negotiate in global trade talks, a high-ranking WTO official said, raising hopes of progress in the stalled Doha round of negotiations.
   The World Trade Organisation’s chief agriculture negotiator, New Zealand ambassador Crawford Falconer, said the United States had accepted a proposal by the WTO for cutting state subsidies in the agricultural sector.
   Farm support has been a key stumbling block for the 151 WTO members as they attempt to come to a deal to lower global trade barriers and increase the flow of goods and services internationally.
   ‘They (the US) said they were prepared to negotiate within the range of numbers put forward in the agriculture paper, provided everybody else would work within the same parameters,’ Falconer told AFP.
   In July, Falconer published a series of proposals for WTO members that called on the US to reduce its agricultural subsidies to between 12.8-16.2 billion dollars.
   Washington had previously refused to cut its farm support to below 23 billion dollars.
   ‘I had never heard them say that before. It’s not a small thing,’ said Falconer, adding that US farm trade negotiator Joseph Glauber had informed the WTO of the US position during talks at the organisation’s headquarters in Geneva.
   ‘It’s certainly a positive sign,’ he said.
   The Doha round of trade talks was launched in 2001 and was meant to have been concluded by 2004 with a new global deal to increase trade to the benefit of poor countries.
   The negotiations have been held back by squabbles between rich and poor countries and disagreements between the United States and the European Union.

China is preparing to send more farmers to Africa as rural labourers find it increasingly difficult to find jobs in the nation’s urban centres, state press reported.
   At a meeting in southwest China’s Chongqing city, the head of China’s Export-Import Bank Li Ruogu pledged to help finance African emigration as part of the city’s urbanisation scheme, the People’s Daily reported on its website.
   ‘With the establishment of the rapid urbanisation project, several million farmers will have to move,’ the paper quoted Li as saying on Tuesday.
   ‘Chongqing can organise a group of the rural workers and send them to Africa to open up agricultural lands. The China Export-Import Bank will fully support this with investment, project development and product sales.’
   China’s commerce ministry on Thursday refused to say how many contracted Chinese workers have been sent to Africa, but according to state press reports, up to 200,000 Chinese-born mainlanders currently live in South Africa alone.
   Meanwhile, according to the Beijing Youth Daily, there are about 7,000 farmers from northern China’s Hebei province who are tilling the soil in 18 African nations.
   Li said the bank had a good track record with numerous agricultural projects on the African continent.
   Li was in Chongqing to offer foreign trade support as part of central government efforts to boost the city’s urbanisation scheme that hopes to bring 12 million farmers into the region’s urban areas by 2020.
   China is currently undergoing an unprecedented urbanisation process with up to 150 million rural migrant workers finding work in urban centers over the last 20 years or so and nearly the same amount expected to descend on cities in coming decades.
   China’s booming economy has been largely fuelled by cheap labour that stems from its population of 1.3 billion people, the world’s largest.
   The nation already sends out hundreds of thousands of construction workers worldwide that accompany a vast army of businessmen.

Grameenphone Ltd signed a Tk 200 crore loan agreement with a consortium of 16 local financial institutions at a function held in a city hotel on Thursday.
   Standard Chartered Bank is the lead arranger of the syndicated loan, said a press release.
   Senior officials of the financial institutions and Grameenphone were present at the loan agreement signing ceremony. Erik Aas, chief executive officer of Grameenphone, was also present.
   Since its inception in March 1997, Grameenphone built cellular network in the country with base stations in more than 5000 locations. Grameenphone has so far invested more than Tk 9000 crore up to June 2007, the release said.
   The Tk 200 crore term loan is being financed by Agrani Bank, Bank Asia, Citibank NA, IDCOL, IFIC Bank, Jamuna Bank, National Bank, Pubali Bank, SABINCO, Sonali Bank, Standard Bank, Standard Chartered Bank, Trust Bank, the City Bank, United Commercial Bank and Uttara Bank.
   The mobile operator Grameenphone has recently crossed 15-million subscriber mark, said the release.

The Bata Shoe Company (Bangladesh) Ltd has inaugurated a sales outlet at Savar in Dhaka.
   JD Hearns, managing director of the Bata Shoe Company (Bangladesh) Ltd, inaugurated the sales centre recently, said a press release.
   MA Quader, marketing manager, SAM Yousuf, retail manager, Ziauddin Ahmed, store operations manager, and other officials of the Bata Shoe Company (Bangladesh) Ltd, were present on the occasion.

The EU needs greater competition in its energy markets to deliver lower prices to consumers and make energy supplies more secure, the OECD said Thursday in an economic survey of the European Union.
   The call echoed proposals made this week by the European Commission for major gas and electricity suppliers to give up their power grids and gas pipelines in the hope of infusing more competition into the sector.
   The OECD said that ‘the network needs to be effectively separated from the generation and supply activities and national markets should be linked together better to create regional or pan-European energy markets.’
   ‘The EU’s recent Energy Policy for Europe is an important step in the right direction,’ the Paris-based economic research body said in the report, which also called for more competition in telecoms, transport, ports and postal services in the 27-nation bloc.
   But it noted that the energy sector is an area where there has been a tendency to try to protect national companies.
   This highlights ‘a clash in view between those who believe that national energy champions are the best way to guarantee a secure supply of energy and to retain some buying power over foreign suppliers, and those who argue that a liberalised, integrated European market is not only more efficient but is also more secure.’
   The OECD report did not specifically mention France’s tie-up earlier this month of Suez and state-owned Gaz de France to create a world energy champion in a sector that Paris was eager to protect from foreigners.
   The Organisation for Economic Cooperation and Development said that the European sectors that have been liberalised the most, such as air transport and telecoms, have delivered lower prices and better service for consumers and other firms alike.
   The report was the OECD’s first economic survey of the European Union. It assesses the effectiveness of EU-wide policies in boosting growth and living standards among member countries.

Now backed by the United States, the socialist former French finance minister Dominique Strauss-Kahn is set to sail to victory next week in the race to become the International Monetary Fund managing director.
   The United States weighed into the two-man contest on Wednesday, one day ahead of Strauss-Kahn’s interview with the IMF board.
   US treasury secretary Henry Paulson urged the IMF Board to back the Frenchman as a replacement for Rodrigo Rato.
   ‘The US is supporting Strauss-Kahn because we believe he will work to make the bold reforms necessary to lead a strong and relevant Fund into the future.’
   Strauss-Kahn had already been widely seen as the favourite against Josef Tosovsky, a former Czech prime minister and central bank chief who was surprisingly nominated by Russia.
   Rato is to step down after the 185-nation institution’s annual meeting in late October. The former Spanish finance minister announced in June he would leave nearly two years early, citing personal reasons.
   The 24-member IMF executive board, which interviewed Tosovsky on Tuesday, will announce the results of a vote on September 28.
   With 16.83 per cent of the voting rights, the United States is the largest shareholder in the IMF. The 27-nation European Union has 32.09 per cent of the votes.
   Russia has only 2.70 per cent of the voting rights. The Czech government is supporting Strauss-Kahn.
   Aleksei Mozhin, the Russian director on the IMF board, said that Russia was counting on developing countries to support Tosovsky.
   ‘We count on a very broad support among the developing countries,’ he told AFP.
   ‘We are very proud of this nomination,’ said Mozhin. Tosovsky was ‘selected exclusively on the basis of merit and his professional background.’

Technology firms dominated as Taiwan led China in a list of the best 200 Asian companies with annual revenues of below one billion US dollars, Forbes Asia business magazine said Thursday.
   Taiwan had 41 small and mid-sized companies named as winners against China’s 23, the publication said in a statement unveiling this year’s ‘Best Under A Billion’ ranking. Taiwan and China split in 1949 at the end of a civil war.
   South Korea had 21 companies on the list, trailed by Singapore with 20, India 17, Australia 12, Malaysia nine, Thailand five, New Zealand four and Pakistan two. The Philippines and Sri Lanka had one each.
   Nearly all 41 Taiwanese companies on the list are from the information technology sector, Forbes Asia said. Eight out of 10 companies on the overall list are making their debut this year.

India would become the third largest economy in the world by 2035 if it continues to grow at the current rate of over nine per cent, member of the economic advisory council of India GK Chadha said in Varanasi on Thursday.
   ‘Sustained nine per cent growth of Indian Economy will make India the third largest economic power of the world in the next quarter of a century,’ Chadha said at a seminar in Banaras Hindu University.
   Chadha, who was also the former vice-chancellor of Jawaharlal Nehru University, said that the present growth rate of the Indian economy is satisfactory and if it is sustained, the country will emerge as an economic super power very soon. The country’s GDP grew by 9.4 per cent in 2006-07 fiscal and in the first quarter of the current financial year, it clocked 9.3 per cent growth.
   ‘By 2025, world will be a bi-polar society wherein China will be the most influential country and by 2035, India would become the third largest economy, making the world tri-polar,’ he said.

China will kick-off in October a new plan to tax state enterprises to cool the pace of investment activity and boost government coffers, state press said Thursday.
   The government will start to take 10 per cent of the after-tax profits earned by the oil, coal, power, chemicals, telecommunications and tobacco industries, a report by Caijing magazine said Thursday.
   Other state enterprises will hand over five per cent of their after-tax profits. Scientific research institutions and military enterprises will be exempt from the plan for three years, it said.
   The plan, which has reportedly been under debate for some time, will mark the first time in a decade that state enterprises have been obliged to pay after-tax profits to the government.
   The government will jump start the plan next month by collecting 17 billion yuan from the 2006 profits of 169 state-run firms.

The euro on Thursday surged to a new record of 1.4065 dollars as a hefty cut to US interest rates took a toll on the US currency.
   Markets were also nervously awaiting statements on the American economy by US officials later in the day.
   The euro has hit new highs regularly since a half-point cut in the benchmark US interest rate on Tuesday. It rose to 1.3988 dollars during Wednesday’s trading in Europe before falling back to 1.3949 dollars.
   At about 0800 GMT, the euro stood at 1.4040 dollars in London trading.
   Congressional testimonies were due later Thursday by Federal Reserve chairman Ben Bernanke and treasury secretary Henry Paulson.
   ‘In the wake of the Fed’s rate decision, and ahead of Bernanke and Paulson’s testimonies on the sub-prime crisis today, further dollar weakness is evident at the European open, with the euro rising to above a record high of 1.40 dollars,’ ABN Amro economist Melinda Smith said.
   On Tuesday, the US Federal Reserve cut its Fed Funds rate by half a percentage point to 4.75 per cent to boost the flagging United States economy and ward off the global credit squeeze.
   A reduction US rates undermines the dollar because assets in other countries become more attractive for investors.
   ‘The dollar remains very vulnerable and further near-term weakness is likely,’ said Derek Halpenny, senior currency economist at the Bank of Tokyo-Mitsubishi in London.
   He added that US economic data would ‘be crucial in determining future Fed action.’
   Roller-coaster volatility has gripped financial markets since early August as concerns about high-risk home lending in the United States have prompted investors to reassess their overall risk exposure.
   ‘In the wake of the Fed decision, it is likely that any negative US data will fuel rate cut speculation and put the dollar under renewed pressure,’ Commerzbank economist Gavin Friend said.
   The European single currency — the common currency of the 13-member eurozone — was created on January 1, 1999.
   The 12 countries that joined from its inception were: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
   Slovenia joined on January 1, 2007, following its admission to the European Union in 2004, becoming the first former communist state to adopt the euro.

Oil prices were lower in Asian trade Thursday as investors took profit following a record-setting rally, but are expected to remain high amid tight supplies and weather concerns, dealers said.
   Diplomatic sabre-ratting over Iran is also contributing to market concerns because
   of its potential impact on geopolitics in the oil-producing Middle East region, they said.
   At 0715 GMT, New York’s main futures contract, light sweet crude for October delivery, was trading at 81.83 dollars a barrel, down 10 cents from its record close of 81.93 dollars in late US trades Wednesday.
   The contract hit an all-time intra-day high of 82.51 dollars on Wednesday after the US Department of Energy said crude oil reserves had tumbled the previous week, underscoring supply tightness.
   Brent North Sea crude for November delivery was down 36 cents to 78.11 dollars. It had also jumped to 78.47 dollars in intra-day trading Wednesday, just shy of its all-time high of 78.64 dollars in August 2006.
   ‘Investors are taking profit,’ said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
   ‘Oil prices have increased about 20 per cent over the past 18 trading days. That’s a very sharp rise so some pullback is not surprising.’
   Shum said prices remained underpinned by supply tightness, weather concerns during the peak hurricane season that could threaten oil production facilities in the US Gulf of Mexico region and geopolitical tensions.
   Highlighting supply concerns, the US DoE said crude inventories in the world’s biggest energy consumer plunged by 3.8 million barrels to 318.8 million barrels in the week ending September 14.
   That marked the 10th consecutive weekly drop and was almost double analysts’ consensus forecasts for a fall of about 2.0 million barrels.
   US gasoline stockpiles rose by 400,000 barrels last
   week, confounding market expectations for a drop of 1.0 million.
   Distillates, including diesel and heating fuel, have advanced by 1.5 million barrels, which tallied with forecasts for a 1.23 million barrel gain.
   ‘We have the usual mix of factors — weather, geo-
   politics and current tightness in supply supporting prices,’ Shum said.
   ‘In the near term, there is limited downside risk to the oil market. We’ve got really strong oil market fundamentals and many investors have returned to the market because of these fundamentals.’
   A decision by the Federal Reserve to cut key interest rates by a bigger-than-expected 50 basis points to boost the US economy has also perked up the oil market.
   ‘The feeling is that if US economic growth remains healthy, oil demand will also remain good,’ Shum said.

Standard Insurance inks deal with CRAB
The Standard Insurance Ltd has signed an agreement with the Credit Rating Agency of Bangladesh Limited for credit rating of the insurance company. Dr Masihur Rahman, managing director of the Credit Rating Agency of Bangladesh Ltd, and AM Md Amanullah Chowdhury, managing director of the Standard Insurance Ltd, signed the agreement on behalf of their respective organizations at a function in the city recently. AKM Mosharraf Hussain and Md Atiqur Rahman, directors, and Md Kowser Munshi, company secretary, of the Standard Insurance Ltd, and HS Sohrawardhi, manager of CRAB, and other senior officials from both the organisations were present on the occasion. Under the agreement, CRAB would provide credit rating services to the Standard Insurance Ltd.
— New Age

CSE revises its blue chips index
The index committee of Chittagong Stock Exchange on Thursday revised the composition of its CSE 30 Index effective from the September 23, said a press release. As per the revised composition, CSE-30 Index includes Square Textiles, Square Pharmaceuticals, Advanced Chemical Industries, Beximco Pharmaceuticals, Apex Foods, Confidence Cement, Heidelberg Cement Bangladesh, Singer Bangladesh, Apex Adelchi Footwear, Bata Shoe Company (Bangladesh), Eastern Housing, Miracle Industries, BOC Bangladesh, AB Bank, National Bank, Pubali Bank, Islami Bank Bangladesh, Al-Arafah Islami Bank, Prime Bank, Dhaka Bank, Southeast Bank, Mutual Trust Bank, Bank Asia, Mercantile Bank, Uttara Bank, Eastern Bank, Export Import Bank of Bangladesh, Bangladesh Online, Uttara Finance and Investment and Usmania Glass Sheet Factory. The thirty companies hold 33.21 per cent of the total paid up capital of the CSE, said the release.
— New Age

Hong Kong gold closes lower
Hong Kong gold prices closed lower on Thursday at 723.50-724.00 US dollars an ounce, down from Wednesday’s close of 725.10-725.60 dollars an ounce. It opened at 721.50-722.00 dollars an ounce.
— AFP