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The government has approved the proposal for appointing four pre-shipment inspection companies for the period between September 2008 and December 2009 as the three-year contracts of the existing PSI agents expire on August 31.
   The cabinet committee on purchase gave the approvals at a meeting Thursday with finance adviser Mirza Azizul Islam in the chair.
    The country will not require any PSI system after 2009 as the capacity of customs department will be enhanced in all counts by then, Aziz said, referring to the recent automation and planned improvements in manpower and valuation database.
    ‘The PSI scheme will no longer exist beyond 2009 as alternative arrangement within the customs department will be made to avoid outsourcing,’ he told reporters after the meeting at the planning ministry.
   He expressed the government’s firmness in taking stringent action against any misdeed of PSI agents.
    The present government scrapped the contract of Cotecna, a Swiss-origin PSI firm, in January 2008 on allegations of helping unscrupulous traders evade duties through false declaration and under invoicing.
   The Internal Resources Division proposed the names of four PSI companies to inspect external trades with countries categorized in five blocs. The firms were selected by a high-powered committee of the revenue board about two weeks back through a competitive bidding, National Board of Revenue officials said.
   Society General Surveillance (SGS), a Swiss origin company, has been appointed for Bloc A and Bloc C.
   India falls in Block A, while 20 countries including Singapore and Malaysia as well as South Asian and Middle Eastern countries are bracketed in Bloc C.
    Bloc B comprises five countries including China and Thailand, and goes to Bureau Veritas, a French inspection company.
   OMIC of Japan has been chosen for Bloc D that groups 11 countries including Japan, Taiwan, Australia and Papua New Guinea.
   Eighteen countries including the USA, Canada, Germany and the United Kingdom have been grouped under Bloc E and Bangladesh’s trades with these countries will be inspected by British company Intertake Testing Services (ITS).
   Of the four companies, OMIC is the new one to be appointed for the next 16 months, while the remaining three companies are already in Bangladesh’s global trade scenario.
   The contracts will be signed shortly, NBR sources said.
   The government will have to pay about Tk 375 crore as service charges to the four companies during the contract period, according to a rough estimate of the finance ministry.
   Importers have to pay one per cent PSI fee on import value of goods to the government at the time of opening letters of credit to help the government pay to PSI agents, customs sources said
   The NBR grouped all countries in the globe into five blocs to facilitate the import inspection by the PSI agencies, a mandatory system introduced in the country since February 2000.
   The system was introduced in the country amid allegations of widespread corruption by the customs department and lack of logistics in the department to certify the import price of goods and ensure the quality.
   The chamber and business leaders demanded the continuation of the scheme until the capacity of customs department is enhanced and the required logistics are ensured in the ports.
   The finance adviser on Thursday said the process of strengthening the port capacity and enhancing customs efficiency had already started and the government would install container scanner at the Chittagong Port as part of its plan to upgrade the country’s prime seaport to the global standard.
   The responsibility of PSI companies is to quote the real import value, mention the quantity of goods and certify the quality, quantity and price at origin. The descriptions are included in ‘clean report of findings’ issued by PSI companies concerned.

The government has decided to return five public sector enterprises, including four mills, to the ministries concerned as the Privatisation Commission failed to disinvest or liquidate those over the last five years.
   The cabinet committee on economic affairs in its Thursday’s meeting at the Planning Commission approved the Privatisation Commission’s proposal to send the five government organisations back to their original ministries.
   ‘The commission wanted to return those as it failed to privatise those. We agreed to the proposal,’ finance adviser Mirza Azizul Islam told reporters after the meeting.
    The committee has not approved another proposal for privatisation of two state-owned companies —Karnaphuli Rayon and Chemical Mills Limited in Rangamati and Particle Board and Veneering Plant in Chittagong.
   The finance adviser said the commission could not produce bank and mortgage loan papers related to the two entities.
    Five government companies, which will go back to the ministries concerned, are Chittaranjan Cotton Mills in Narayanganj, Daulatpur Jute Mills in Khulna, Service Facilities Centre in Brahamanbaria, Textile Facilities Centre in Noakhali and Khulna Newsprint Mills at Khalishpur of Khulna.

Informed decisions of the investors diminish risks of investment at the capital market, said Faruq Ahmad Siddiqi, chairman of Securities and Exchange Commission, on Thursday.
   ‘Investment at the stock market brings profit, but it involves risks also,’ said Faruq Ahmad as chief guest while launching an investors’ awareness programme at Hotel Purbani in Dhaka on Thursday. The IDLC Finance and its subsidiary the IDLC Securities jointly organised the awareness programme.
   The SEC chief said, ‘Awareness programmes are very crucial for investors to make them cognisant on the methods of analysing fundamentals of securities.’
   He said the country’s capital market would be strengthened if the investors would take informed decisions and avoid investment on speculations.
   He urged the merchant banks and brokerage firms to arrange awareness programmes for their clients.
   The SEC, Dhaka Stock Exchange and Chittagong Stock Exchange organise investors’ awareness programme on regular basis, he mentioned.
   The SEC chairman said in last two years country’s stock market saw a robust growth with market capitalisation surging to around $14 billion from around $4 billion.
   ‘The market will see further growth in next two years with influx of more private sector and multi-national companies,’ he observed adding ‘Investors base will also increase accordingly.’
   Anwarul Huq, chairman of the IDLC Finance Limited – a joint venture multi-product financial institution and a leading merchant bank, said investors would gather knowledge from awareness programmes on different aspects of capital market investments.
   ‘The IDLC Finance has planned to launch an asset management company with a view to contributing long-term stability at the market,’ he said.
   Anwarul Huq was the special guest at the awareness programme where DSE president Abdul Haque was present as guest of honour.
   Abu Ahmed, professor of Economics at Dhaka University, presented the key-note paper at the event.
   In his key-note paper, Abu Ahmed explained the method of analysing fundamentals of a company and pointed out tips on stocks picking.
   IDLC Finance chief executive officer and managing director Anis A Khan gave welcome speech while general manager Arif Khan gave vote of thanks.

The first ever Arab economic summit, to be hosted by Kuwait in January, will focus on worsening poverty and unemployment in the Arab world, and boosting inter-Arab trade, a minister said on Thursday.
   ‘The summit will tackle the aggravation of poverty and unemployment and the deterioration of living conditions in the Arab world, besides boosting modest trade,’ Kuwaiti finance minister Mustafa al-Shamali said.
   The summit will also discuss investments, infrastructure projects and the issue of reforms, Shamali told the official KUNA news agency after chairing a preparatory meeting at Arab League headquarters in Cairo.
   A large number of Arab leaders are expected to attend the January 19-20 summit.
   The meeting in oil-rich Kuwait will be the first by heads of state of the 22-member Arab League to focus only on economic issues.
   Economic reports have said that Arab countries need to create more than 80 million jobs by 2020 and the number of Arab jobless is put at around 60 million.
   The reports also expect the Arab population, which currently stands at around 300 million, to double in 30 years.
   Arab countries kicked off a free trade zone at the beginning of 2004, but it has had little success in boosting inter-Arab trade.
   Shamali also said that committees preparing for the summit will select a number of economic projects to be discussed at the meeting out of some 300 that have been received so far by the Arab League.
   Arab leaders are also due to discuss water and food security as well as the environment.

Asian Development Bank has offered new ways to measure poverty in Asia and Pacific and fixed $1.35 a day as a new poverty line for the region.
   In a report released on Wednesday, the ADB provided a comparable rates of poverty using price data specific to the Asia and Pacific region, and, critically, to the poor. The report describes important methodological issues involved in generating internationally comparable estimates of poverty. ‘This is a landmark study for two reasons,’ says Dr Ifzal Ali, ADB chief economist. ‘For the first time a thorough sensitivity analysis of the internationally comparable poverty estimates has been carried out. Second, a poverty line that is relevant specifically to the Asia and Pacific region has been adopted.’
   The new poverty line, called the Asian Poverty Line, is roughly $1.35 a day. A person who earns less than $1.35 a day is considered a poor.
   ‘While the $1-a-day poverty line remains an appropriate benchmark for counting the extent of extreme poverty in Asia, and the developing world more generally, in a region that has witnessed rapid economic growth it might also be time to evaluate poverty incidence using a benchmark that reflects the region’s dynamism,’ says Dr Ali. A major contribution of the report is to examine the sensitivity of poverty estimates to different methods for evaluating purchasing power parities. PPPs are conversion factors that ensure a common purchasing power over a given set of goods and services.
   ‘PPPs are one of the most vital ingredients in generating internationally comparable estimates of poverty,’ says Dr Ali. But what PPP should be used? The report notes that the World Bank’s $1-a-day poverty estimates are based on PPPs developed for comparing household consumption across countries, known as consumption PPPs. From the perspective of poverty comparisons, however, it was considered more appropriate to use a set of PPPs that are based on comparisons of prices of goods and services that the poor purchase.
   The report, using original data collected specifically for its study, examines where the poor shop, what they buy, in what quantity, as well as the quality of the products they purchase. The report notes, for example, that there is a considerable difference in quality and price between packaged rice bought in a supermarket and rice bought in a wet market—where the poor traditionally shop. The prices paid for the products purchased by the poor are used to generate a new set of PPPs, called poverty PPPs.
   ‘Our aim in this study was to shed light on how alternative approaches to compiling purchasing power parities can influence internationally comparable estimates of poverty,’ says Dr Ali. Using consumption PPPs, the report estimates that in the 16 countries that participated in the study, 1.042 billion people would have been living below $1.35 a day in 2005. Under the more robust poverty PPPs, this estimate would drop to 843 million people.

The Dhaka and Chittagong stock exchanges have rescheduled trading and office timings for the month of Ramadan, said official sources.
   ‘During the month of Ramadan, trading at the Dhaka Stock Exchange will start at 10:00am and continue till 1:30pm,’ said an official of the DSE on Thursday.
   Chittagong Stock Exchange’s official website on Thursday reported that during the month of Ramadan, trading session at the CSE would follow the same schedule —10:00am to 1:30pm.
   Usually, the trading session at DSE and CSE starts at 10:00am and continues till 2:00pm.
   The bourses’ clearing houses, however, will receive or deliver shares till 2:30pm during the month, the sources said.
   The sources said the DSE and CSE offices would remain open from 9:00am to 3:30pm.
   After the month of Ramadan, normal office time and trading time will be followed, said the sources.
   Dhaka stocks closed up Thursday for the sixth consecutive trading day after a nine-week slump.
   The DSE general index gained 2.29 points or 0.08 per cent to close at 2765.46, while its blue chips index, DSE20, advanced by 1.93 points or 0.08 per cent to finish at 2425.89.
   Of the total 225 issues traded at the DSE, 100 advanced, 115 declined and 10 remained unchanged.
   Turnover at the DSE, however, decreased to Tk 246.11 crore from the Wednesday’s Tk 302.91 crore.
   Chittagong stocks dropped on Thursday with its selective categories index losing 5.37 points or 0.01 per cent to close at 5609.41.
   CSE blue chips index, CSE30, shed 8.42 points or 0.11 per cent to finish at 7845.11.
   Of the total 141 issues traded at the CSE, 51 posted gains, 82 dropped, and eight remained unchanged.
   Turnover at the CSE went down to Tk 40.64 crore from the Wednesday’s Tk 48.41 crore.

Commerce adviser Hossain Zillur Rahman thanked the Turkish government for including Bangladesh as one of the four priority countries in its new trade policy towards the east, in a recent meeting with Turkish trade minister Kursad Tuzman.
   The adviser also stressed the importance of direct flights between Istanbul and Dhaka, the foreign ministry said Thursday.
   Hossain Zillur was heading the Bangladesh delegation to the formal inauguration of the 77th Izmir International Fair.
   The flights will facilitate easy traffic for business delegations and tourists, the adviser said according to a foreign ministry statement.
   The Turkish trade minister, in their meeting Tuesday, assured the adviser that his administration would consider establishing direct flights soon.
   Zillur lauded the phenomenal economic growth of Turkey, the 17th largest economy in the world.

China’s banking sector, once considered the weakest link in the nation’s economy, has had a spectacular first half, with one lender now touting itself as the most profitable bank in the world.
   Profits have soared due to rising interest revenues and a cut in the income tax, analysts said, but they warned that a slowdown in the economy could hit borrowers’ ability to pay back loans in the second half.
   ‘The banking sector saw sharp and better-than-expected growth in the first half, but challenges remain,’ said Jin Lin, a Shanghai-based analyst with Everbright Securities in Shanghai.
   ‘In the second half, the most critical challenge for the banks will be a worsening in asset quality as ... we will be approaching a trough in the business cycle.’
   Industrial and Commercial Bank of China, the nation’s top lender, said last week it had become the world’s most profitable bank in the first half after earning 9.4 billion dollars, up 56.8 per cent over the same period in 2007.
   Some other banks reported even higher growth rates, with CITIC Bank posting an increase of 161.5 per cent — the biggest among all Chinese lenders that have released their interim reports so far.
   The outstanding performance of the banking sector contrasts starkly with more moderate growth in other industries, reflecting a slowdown in the Chinese economy.
   The average profit growth of the 1,178 listed firms who had published their interim results by Monday was 30.9 per cent.
   While impressive by most standards, it was still less than half the rate of the 70 per cent achieved in the first six months of 2007.
   Just a decade ago, economists warned that the banks were the sector that could cause the entire Chinese house of cards to collapse. But several factors have contributed to the turnaround, analysts and economists said.
   China’s tight monetary policy has strengthened the pricing power of banks amid robust demand for loans, with credit growth of 14.1 per cent in the first six months of 2008.
   The rate structure of the Chinese financial system has allowed banks to reap maximum benefit of the roaring loan demand, analysts said.
   While banks cannot raise the one-year deposit rate above the benchmark 3.33 per cent for average clients, they may hike the lending rate as high above the official 7.47 per cent as they think safe without scaring customers away.
   ‘There’s a very significant increase in net interest income,’ said Charlene Chu, Fitch Ratings analyst in Beijing.
   ‘(It’s) associated with higher pricing of loans as well as just pretty rapid growth in the loan book in the first half.’
   Another important reason why the first half was so lucrative was a reduction in the corporate income tax to 25 per cent from 33 per cent. The tax took effect in the beginning of the year and significantly brought down tax costs for the banks.
   ‘Some banks reported more than 100 per cent growth in the first half, which is partly linked to the tax cut,’ said Winnie Wu, a Hong Kong-based analyst with Merrill Lynch.
   ‘The high growth is for after-tax result. The pre-tax growth is not that high,’ she said.
   She said some of the banks that posted 100-per cent-plus after-tax profit growth probably saw a more moderate 70-to-80 per cent growth in pre-tax profits.
   More important, tax cuts are a distinct one-off, and there are already warnings from economists that bad loans are likely to rebound in the second half and in 2009.

Dubai-based port operator DP World posted on Thursday a 123 per cent increase in net profits in the first half of 2008, which hit 287 million dollars, despite a global economic slowdown.
   The world’s fourth-largest container port operator said its revenues grew by 32 per cent to 1,598 million dollars, compared to the corresponding period last year.
   ‘The business has performed very well in the first half of 2008 despite a deteriorating global financial and economic background, and these uncertainties remain,’ DP World chief executive officer Mohammed Sharaf said in a statement.
   ‘In the last few months the industry has reported early indications of weakening growth in some markets,’ he said, but insisted that DP world has ‘continued to perform ahead of the market.’

Southeast Asian nations and China aim to finalise an investment agreement by December, completing a free trade deal that already covers goods and services, the two sides said Thursday.
   In a statement issued after meetings between economic ministers from ASEAN and China, they said ‘substantive progress’ has been made on the ASEAN-China Investment Agreement.
   Ministers ‘underscored the importance of concluding the Agreement’ by December when the 10-member Association of Southeast Asian Nations holds its annual summit in Bangkok.
   The investment pact is one of three components of a free trade deal between ASEAN and China. Agreements covering trade in goods and trade in services were reached in 2004 and 2006.

The ASEAN regional bloc concluded free-trade pacts with India and Pacific neighbours Australia and New Zealand on Thursday, setting the stage for broader Asian economic integration, officials said.
   They hailed the agreements as important steps in Asia’s efforts to link its diverse markets more closely, but also said they hope the regional deals will give impetus to the stalled Doha Round of global trade negotiations.
   India and the 10-member Association of Southeast Asian Nations announced they had concluded a deal for free trade in goods. The accord covers billions of dollars in trade and a market of 1.7 billion people.
   ‘This is an important milestone for our region,’ said Indian Commerce Minister Kamal Nath.
   The pact follows six years of difficult talks.
   Ministers later also announced that ASEAN had concluded a wide-ranging free-trade agreement with Australia and New Zealand.
   ‘This is the most comprehensive free trade agreement that ASEAN has ever entered. It is the largest free trade agreement that Australia has ever negotiated,’ Australian trade minister Simon Crean told reporters in Singapore.
   The accord covers not only merchandise trade but also services, investment, financial services, telecoms, electronic commerce, movement of people, intellectual property, competition policy and economic cooperation, a joint statement said.
   ‘The ministers see the agreement as paving the way to enhancing the region’s economic integration and acting as an impetus to deepen and broaden the trade and investment among the 12 participating countries,’ the statement said.
   Talks began in March 2005. ASEAN, Australia and New Zealand hope to sign the deal in December once it receives domestic approval by the individual countries.
   ASEAN’s total trade in goods with Australia and New Zealand increased from 41.0 billion US dollars in 2006 to 47.8 billion last year, the joint statement said.
   With the new agreements, the Southeast Asian bloc of about 550 million people has forged free-trade links with all the key regional economies. It earlier inked deals with China, Japan and South Korea.
   ASEAN’s deal with Japan covers goods, services and investments. The bloc is broadening its trade and services pacts with China and South Korea to also cover investments.
   ‘We are in very good shape in terms of the progress of the overall ASEAN Plus One process,’ Indonesian trade minister Mari Pangestu said, referring to ASEAN’s separate free trade agreements with major trading partners.
   ‘We hope that this will lead... toward a really greater East Asia economic integration.’
   ASEAN’s members have already cut tariffs to between zero and five per cent on 90 per cent of goods and are moving to remove non-tariff barriers.
   This is part of ASEAN’s plan to establish a single market and manufacturing base by 2015 in a bid to remain competitive, especially with the rise of India and China.
   ASEAN secretary general Surin Pitsuwan said the bloc’s agreements with regional economies were a key move toward wider Asian cooperation.
   ‘I’m sure that this also will give some impetus, some encouragement, to the stalled Doha Round,’ Surin said, adding the ministers expressed hope global talks could move forward.
   The so-called Doha Round of global trade talks broke down in July because of a dispute between India and the United States over agricultural tariffs.
   Crean, the Australian minister, said the political will shown in reaching the agreement announced Thursday should provide a ‘demonstration effect and hopefully a very strong signal to the reactivation’ of the Doha talks.
   With the prospects for a global trading regime in limbo, some officials said, negotiations for regional free-trade pacts such as those pursued by ASEAN could gain momentum and lead to a massive Asia-wide free-trade zone.
   Other officials said this would not be easy.

Protests that have brought chaos to Bangkok’s government district will shake investors already wary of a global slowdown and prolonged political uncertainty in Thailand, industry experts say.
   Many of the 35,000 protesters who stormed through the Thai capital earlier this week are now camped out in the main government compound — a sight unlikely to reassure investors considering pumping money into Thailand.
   The Stock Exchange of Thailand has lost nearly 18 per cent since the People’s Alliance for Democracy began protesting at the end of May demanding that prime minister Samak Sundaravej step down.
   ‘The political situation in Thailand now is not good at all. It is not good for investment or tourism,’ said Chen Namchaisiri, chairman of the Garments Industry Club, a member of the Federation of Thai Industries.
   ‘It is not going to be good for Thailand’s development in the long term.’
   The upheaval is the latest chapter in years of turbulent politics, which peaked with the 2006 coup that removed business-friendly prime minister Thaksin Shinawatra.
   Global factors including the slowdown of the US economy and soaring fuel prices have also taken their toll, and the central bank has revised down its economic growth forecast for this year from 5.8 per cent to 4.3 per cent.
   ‘This come at a time when investors already had their energy sapped by global economic uncertainty,’ said Song Seng Wun, a regional economist at CIMB-GK investment bank in Singapore.
   ‘So the political goings-on in Thailand is just going to be another excuse for them to say well, this is a reason for us to sit this out.’
   Samak’s election in December and the unveiling to his coalition government in February boosted investor confidence, he said, especially after a series of missteps by the military-installed government.
   But recent signs have been more sobering.
   Inflation in July hit a fresh 10-year high of 9.2 per cent, while gross domestic product growth dipped to 5.3 per cent in the second quarter of 2008, down from 6.1 per cent in the first quarter.
   Tourism too could suffer from this week’s crisis, analysts say, although it has only slowed slightly despite the 2006 coup, a string of bombings later that year, and more than a year-and-a-half of military rule.
   Foreign minister Tej Bunnag has attempted to play down the economic threat posed by the rallies by the PAD movement, which despite its name is trying to bring down the elected government.
   ‘While the demonstrations may have some effect on Thailand’s tourism industry and economy, the foreign minister hoped that the situation will not escalate and turn violent as this would not benefit the kingdom,’ his ministry said.

AB Bank signed a Tk1.81b credit facility agreement with Ananda Shipyard and Shipways Ltd at the bank’s head office in Dhaka on Thursday.
   President and managing director of AB Bank Kaiser A Chowdhury, and managing director of ASSL Group Afruja Bari, signed the deal on behalf of their respective organizations, said a press release.
   Chairman of ASSL Abdullah Bari, and deputy managing directors of AB Bank Niaz Habib and Faruq M Ahmed, were present at the deal signing ceremony.
   Ananda Shipyard and Shipways Ltd, the largest shipyard in private sector in Bangladesh, has undertaken a $12.50 million shipyard expansion project.
   With completion of the expansion programme, expected to be done by February, the ASSL’s output will reach to 30000 tonnes from the existing 10000 tonnes.

The Export Import Bank of Bangladesh Limited held its ninth annual general meeting at the Bangladesh-China Friendship Conference Centre in Dhaka on Tuesday. Md Nazrul Islam Mazumder, chairman of the bank, presided over the meetings.
   The shareholders in the AGM approved a 7 per cent cash dividend and a 25 per cent stock dividend for 2007.
   EXIM Bank directors AKM Nurul Fazal Bulbul, Md Abdul Mannan, Md Nurul Amin, Abdullah Al-Zahir Sapan, Mohammed Shahidullah, Md Abdullah, Habibullah, Nasima Akhter, and Mahbubur Rashid, independent director Muhammed Sekander Khan, managing director Kazi Masihur Rahman, sponsor and former directors Md Nazrul Islam Swapan, Md Altaf Hossain, Md Mazakat Harun, Aminur Rahman Khan, Al-Hajj Md Nur Hossain, Anjan Kumar Shaha, and Fahim Zaman Pathan, and additional managing director Ekramul Haque, among others, were present at the meeting.

New Zealand is facing its most challenging economic conditions for two decades, Finance Minister Michael Cullen said Thursday.
   Economic growth figures out next month are expected to show New Zealand slipped into recession in the June quarter in a second straight quarter of contraction.
   ‘Today New Zealand is facing a serious economic challenge generated by the global credit crunch and steep rises in global commodity prices,’ Cullen told a superannuation conference in Auckland.
   ‘These are the most complex and challenging set of economic forces we have confronted in at least two decades.’
   Cullen said New Zealanders faced pressures on household budgets due to high fuel and food prices and continuing high mortgage interest rates, despite the central bank’s quarter percentage point cut to the official interest rate last month.
   He said there would be relief with further cuts to interest rates and a cut to personal tax rates due to take effect in October.
   The government would maintain a tight hold on its spending to ensure further upward pressure was not put on interest rates.
   The central bank cut the official interest rate — for the first time in five years — by 0.25 percentage points in July to 8.0 per cent but the rate remains one of the highest in the developed world.
   Cullen said New Zealand had a poor savings record and this was reflected in a negative net international investment position equivalent to 86 per cent of gross domestic product.
   ‘Among rich, developed nations, only Iceland has a higher level of national debt on such a measure,’ he said.
   To address the poor savings record, last year the government introduced the voluntary KiwiSaver superannuation scheme for all workers, in which employee contributions would be topped up by employers and the government.
   A total of 770,000 workers — more than expected in a total population of 4.2 million — have so far joined the scheme.
   ‘What we are seeing through KiwiSaver is nothing short of a savings revolution in this country.’

The recent nationalisations of strategic sectors in Venezuela are frightening away foreign companies and turning the country into South America’s worst destination for foreign investment, analysts say.
   President Hugo Chavez’s decision to take over electricity, oil, steelmaking, cement and telephone enterprises over the past year may strengthen the ‘revolutionary’ drive towards building a socialist nation, but it also drives off multinationals which have the funds to boost economic activity.
   Several groups, notably US energy companies ExxonMobil and ConocoPhilips, have simply abandoned operations there.
   Others, such as cement makers LaFarge of France and Holcim of Switzerland, have quietly accepted discounted compensation for their expropriated Venezuelan subsidiaries.
   On Monday, Venezuela’s government said it was resuming negotiations with the Mexican cement group Cemex in an effort to reach a settlement over its seized subsidiary.
   The state domination of the country’s economy — which also extends to controls on prices and foreign currency exchanges that limit corporate competition and profitability — is severely dampening investment from outside, the analysts say.
   ‘Foreign investment should be at least three per cent of gross domestic product, around six billion dollars. We’re only at 10 per cent of that figure,’ one economist, Orlando Ochoa, told AFP.
   According to the UN Conference on Trade and Development, direct foreign investment in Venezeula amounted to 400 million dollars last year — the lowest amount recorded for any country in South America.
   In comparison, neighboring Colombia had investment of 8.2 billion dollars, and Brazil had 37.4 billion dollars.
   In fact, out of a list of 34 countries evaluated by UNCTAD, Venezuela comes second-last, only above Hungary, in terms of direct foreign investment.
   Experts say the wave expropriations have left a sense of legal insecurity for companies, making them feel their investments are vulnerable.
   The biggest companies left in the country are subsidiaries of the food groups Nestle of Switzerland and Cargill of the United States, Spanish telephone company Movistar, the US pharmaceutical groups Pfizer and Merck, the US automobile giant General Motors, and the Spanish bank Banco Bilbao Vizcaya, according to Venezuela’s National Investment Promotions Council.
   For Luis Vicente Leon, head of the Datanalisis polling firm, foreign corporate chiefs ‘develop investments with a view to expected returns and to being protected in terms of being able to repatriate the capital and to generate profits in the future.’
   In Venezuela, ‘the companies are exposed to the risk that the state could at any time declare them a public utility, and take them over or buy them,’ he said.
   Companies looking to invest in Venezuela also take into account the country risk evaluation, which according to finance ministry data has risen to 648 points — more than double that attributed to Brazil or Colombia, and the worst level of any South American country except Argentina.
   But some in the country see a positive side to the changing business environment.
   Alejandro Uzcategui, president of Venezuela’s Business Leaders’ Federation, said the exit of some international companies has left an opportunity for others to take their place.

German unemployment fell further in August, but the biggest European economy is flirting with recession and its job market will probably feel the effects later this year, analysts said Thursday.
   The number of jobless people declined by 40,000, surprising analysts who had expected a drop of just 10,000 after a decrease of twice that number in July.
   Unemployment dipped to 7.6 per cent of the workforce from 7.7 per cent in July, according to adjusted figures released by the national employment agency.
   At the end of August, Germany had a total of 3.196 million unemployed, the lowest level since February 1993 when the country was in recession.
   Capital Economics economist Ben May called the figure ‘a rare piece of good news for the economy,’ and said it underpinned the view ‘that Germany is still in better shape than most other eurozone economies.’
   But Andreas Rees of UniCredit Markets warned that ‘the clock for the German labour market is literally ticking. It is only a matter of time before the economic slowdown will be felt.’
   Germany’s economy contracted by 0.5 per cent in the second quarter of 2008, the first time in four years that activity decreased, and a possible third quarter contraction would put it back into recession.
   UBS economist Martin Lueck said: ‘We expect clearer traces of the economic slowdown to become visible later this year’ in the job market. He noted however that the August decline ‘was in line with the trend established over the past two years.’
   At Global Insight, Timo Klein expected unemployment ‘to fall modestly further during the latter months of 2008 and possibly even in early 2009, despite the dampening influence from the slowdown in economic growth.’
   Lueck said the reasons employment has resisted slowing economic growth could include labour reforms and that fact that ‘there has been no excessive hiring in the current cycle’ that would normally be corrected during a downturn.
   ‘The labour market has become more flexible, mostly through deregulation of temporary employment,’ he added, and ‘temp staffers are now serving as a cushion’ and might be finding new jobs before they become unemployed.

The euro gained further against the dollar Thursday on market speculation that eurozone interest rate cuts are unlikely in the near future, dealers said.
   In morning London deals, the European single currency rose to 1.4765 dollars from 1.4737 in New York late on Wednesday.
   Against the Japanese currency, the dollar dropped to 109.08 yen from 109.47.
   The euro climbed further away from six month lows of below 1.46 dollars, reached on Tuesday in the wake of downbeat consumer confidence and business sentiment surveys in Germany, Europe’s biggest economy.
   ‘Anticipation of a quick rate cut by the ECB now seems to be fading on the back of comments by bank members and this has helped lift the euro away from recent dollar lows,’ said CMC Markets analyst James Hughes.
   The euro has been buoyed by comments from European Central Bank policymaker Axel Weber, who indicated the bank was unlikely to lower interest rates any time soon.
   Up to now, markets have been expecting rate cuts from the ECB and hikes from the US Federal Reserve to narrow the rate differential in the two regions.
   The dollar was also being pressured by a fresh rise in oil prices on concerns that Tropical Storm Gustav could hit oil and gas installations in the Gulf of Mexico, dealers said.
   Market players were looking ahead to another batch of US economic indicators, including second-quarter economic growth and a home price survey due Thursday.
   Dealers said the greenback could get a boost from the snapshot of economic second-quarter growth amid hopes it would be revised upwards from an earlier estimate of 1.9 per cent.
   But the market impact was unlikely to be huge as the growth figures were considered a lagging indicator, they added.
   Meanwhile a report by the Japanese Nikkei business daily that the US, European and Japanese authorities drew up an emergency plan in March to rescue the plunging dollar brought some relief to markets, dealers also said.
   In the event no joint intervention took place.
   But the report ‘suggests a more stable dollar in the long run, which should help keep overall foreign exchange market volatility low’ and encourage risk appetite, a Tokyo trader told Dow Jones Newswires.
   Elsewhere on Thursday the British pound remained close to two-year lows versus the dollar as a survey from the Nationwide bank revealed that house prices continued to slump in August.
   ‘The sharp decline in house prices persisted into August as weak buyer confidence and tight lending criteria continued to weigh on the market,’ said Capital Economics analyst Seema Shah.
   In London trading on Thurday, the euro changed hands at 1.4765 dollars against 1.4737 late on Wednesday, at 160.92 yen, 0.8030 pounds and 1.6136 Swiss francs.
   The dollar stood at 109.08 yen and 1.0937 Swiss francs.
   The pound was at 1.8377 dollars.
   On the London Bullion Market, the price of gold increased to 832.75 dollars per ounce from 827 dollars late on Wednesday.

World oil prices rose Thursday on storm concerns in the rig-heavy Gulf of Mexico and simmering geopolitical tensions between Russia and western nations, analysts said.
   The Gulf of Mexico accounts for 26 per cent of US crude production and 11 per cent of natural gas output. New York’s main contract, light sweet crude for delivery in October, gained 74 cents to 118.89 dollars per barrel in electronic deals.
   London’s Brent North Sea crude for October won 71 cents to 116.93.
   ‘Oil futures were still higher on Thursday, extending gains from yesterday on persistent concerns that Tropical Storm Gustav could develop into a major hurricane as it reaches the Gulf of Mexico,’ said Sucden analyst Andrey Kryuchenkov.
   Kryuchenkov added: ‘The market also remains well support by persistent geopolitical tensions surrounding Russia’s standoff with NATO and the EU over its actions in Georgia.’
   ‘Moscow has escalated tensions further by recognising the independence of two breakaway regions of South Ossetia and Abkhazia.’
   Tropical Storm Gustav took a turn on Thursday, moving south as it crept toward Jamaica in a new track that could spare the hurricane-scarred US city of New Orleans.
   Gustav reformed to the south early Thursday and became ‘a little stronger,’ blowing winds of 85 kilometers 53 miles per hour, the US National Hurricane Center said in its latest advisory.
   The eye of the storm, which has already left 22 people dead in Haiti and the Dominican Republic, was expected to pass ‘very close’ to Jamaica later Thursday, the center said.
   Gustav, which struck Haiti as a Category One hurricane on Tuesday, could regain hurricane strength by Friday, it warned.
   ‘Oil markets are waiting for Gustav,’ said PetroMatrix analyst Olivier Jakob.
   ‘It is still potentially going towards the oil assets of the US Gulf but current forecasts are not showing it to be the mother of all hurricanes.’
   In 2005, hurricanes Katrina and Rita damaged or destroyed about 165 oil platforms of about 4,000 located in the Gulf.
   Energy giant Royal Dutch Shell said Wednesday it had begun ‘evacuating personnel not essential to producing and drilling operations in the Gulf.’
   Meanwhile, the market has shrugged off the latest US weekly report on energy inventories.
   The US Department of Energy had said Wednesday that crude stockpiles had fallen by 100,000 barrels last week, instead of the 2.2 million barrel increase forecast by most analysts.

President urges Qatari businesses to invest in Bangladesh
President prof Iajuddin Ahmed on Thursday urged the Qatari businessmen to invest in Bangladesh. He underlined the need for increasing trade relations between the two countries through proper utilisation of the existing trade and economic potentials. The president made the call while outgoing Qatar ambassador to Bangladesh Ibrahim Mohamed A Al-Abdullah made a farewell call on him at Bangabhaban. Welcoming the ambassador, president expressed satisfaction at the existing excellent bilateral ties between the two countries and hoped that the relations would be strengthened further in the days to come. Prof Iajuddin said, ‘Qatar can import more our world-class products from Bangladesh, including pharmaceuticals, readymade garments and vegetables.’ Referring to 80,000 Bangladeshi workers now working in Qatar, president appraised the envoy of availability of skilled doctors, engineers, and teachers, who could contribute to Qatar’s national development. Through the outgoing ambassador, the president invited Qatar Amir to visit Bangladesh. The outgoing ambassador apprised Prof Iajuddin that the Bangladeshi workers had been contributing to Qatar’s development.
— BSS

Hong Kong gold closes higher
Hong Kong gold prices closed higher on Thursday at 833.80-834.30 US dollars an ounce, up from Wednesday’s close of 829.60-830.10 dollars. It opened at 829.00-830.00 dollars.
— AFP