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Export of drugs manufactured in Bangladesh will see big boost soon as major Bangladeshi drug makers, having secured vital accreditations for the European market, are preparing to export to this lucrative market.
   According to industry sources, Beximco the leading exporter that explored markets from the Fareast to Latin America, is set to acquire accreditations for Australia and countries under the Gulf Cooperation Council.
   Incepta and Renata are getting ready for the highly sensitive European market while Square, the local market leader, is working on several follow-up orders for buyers in UK after sending its first consignment a few months back.
   ‘We will ship our first consignment to Europe within three months,’ said Abdul Muktadir, managing director of Incepta that secured EU-GMP (Good Manufacturing Practice) certificate in December, 2007.
   Incepta is preparing consignments of anti-diabetics, anti-hypertency, anti cholesterol and naturopathic drugs to be procured by a major EU importer.
   ‘Just during the past one month we received four potential enquires from Europe,’ said the Incepta official which is third in the local market with sales worth about 300 crore ($43 million) in 2007.
   He, however, observed that it was not significant how much money Bangladeshi drug makers earned from the EU market. ‘Ensuring importers’ confidence and consistency is crucial now as global drug importers are desperately searching for reliable alternative sources to China or India. So a multibillion dollar market beckons Bangladesh.’
   Renata, another giant pharmaceutical, is preparing to export significant number of consignments, contracted with a major pharmaceutical company in UK, of steroids, apparently used in number of life saving drugs.
   ‘We will be able to ship our first consignment within in a couple of months,’ Monjurul Alam, head of the international business department of the Renata, told New Age on Tuesday.
   Renata’s export division, which at present markets drugs in Sri Lanka, Philippines, Hong Kong, Jordan and is eyeing the million dollar mark this current year, is enthusiastic about opportunities in the EU.
   ‘I see a drug import market worth billions of euros staring at Bangladesh,’ said Alam.
   At present multinational Novartis (Bangladesh) exports drugs to Germany and Austria.
   Ashfaque Ur Rahman, managing director of Novartis, which shipped mainly cardiovascular and neurological drugs worth about $17 million to Europe in 2007, expects entrance of more Bangladeshi companies into the European market would reap more benefits.
   ‘200 per cent!’ said Ashfaque when asked about European clients’ impression about the quality of Bangladeshi drugs.
   Around 30 Bangladeshi drugs makers explored markets in more than 50 countries including those in Africa, Latin America and Asia.
   According to the Export Promotion Bureau, export figures will surely reach $40 million with a growth of 50 per cent in the current fiscal to be closed at the end of this month.
   But, Nazmul Hasan, the chief executive of Beximco Pharmaceuticals, that eye more than $3 million as its 2008 export proceeds, said, ‘The current amount is almost nothing compared to the industry’s capacity and potential in the global market.’
   Nazmul said besides Beximco’s capacity to produce 4 billion pieces, only the large drug manufacturers are ready for manufacturing drugs for the export market, which would require at least 20 billion pieces. ‘If one tablet sells at 10 cents on an average we are ready to earn $2 billion.’
   Nazmul foresees that by mid-2009 Bangladesh drug makers will find global markets especially the advanced markets ripe for them.
   ‘By early next year, most of the patent related cases in WTO will be settled and drug markets will clearly see which items are beyond the purview of patents thus and open for LDCs to produce,’ he said.
   According to a WTO agreement, LDCs do not have to implement any kind of intellectual property rights before 2016 for medicines and drugs.

The finance adviser, Mirza Azizul Islam, Tuesday said the government is considering tax exemption on a part of corporate incomes to be spent in discharging corporate social responsibility.
   ‘The matter was not included in the budget, but there is scope of taking a decision in this regard beyond the budget,’ he told reporters, following a Dutch-Bangla Bank Limited function at Hotel Purbani.
   He, however, pointed out that some individuals or organisations do not properly utilise any incentive, forcing the authorities to take a restrictive approach. ‘Even then we are reviewing the issue.’
   DBBL organised the function to distribute stipend among 100 students who passed HSC examination, for helping them bear the educational expenses at the graduate level.
   Under the programme, each student would get Tk 2,000 per month and a lump sum of Tk 5,000 per year for buying books and other reading materials.
   Addressing the function, DBBL managing director Yesin Ali urged the finance adviser to exempt the CSR expenses from tax so the companies could expand their CSR programmes.
   He said the banks have to spend Tk 145 for every stipend of Tk 100 as the corporate income tax of bank companies is 45 per cent.
   DBBL executives said the bank spends around Tk 4 crore annually as stipends.

Dhaka stocks rebounded on Tuesday due to increased participation of institutional investors and significant rise in the share price of ICB Islamic Bank Ltd, now defunct Oriental Bank, as trading of its shares resumed, said market operators.
   The all share price index of the Dhaka Stock Exchange gained 78.04 points or 3.10 per cent to close at 2597.27. Its general index advanced by 71.67 points or 2.42 per cent to close at 3036.02 and blue chips index, DSE20, climbed up by 49.14 points or 1.97 per cent to finish at 2539.59.
   ‘Market witnessed increased participation of institutional investors, who bought shares to avail the lower prices of the stocks after recent fall,’ said Moin Al Kashem, senior vice-president of the Prime Finance and Investment, a merchant bank.
   Market remained volatile in first two days this week and throughout the last week due to selling pressure from investors, frustrated with the DSE’s market cooling measures. Being upset with the continuous fall in share prices, a group of retail investors on Sunday staged demonstration in front of the DSE building. A week before, the bourse also witnessed a half-an-hour demonstration by a group of aggrieved retail investors following fall in share prices.
   Moin said significant rise in the share price of ICB Islamic Bank also contributed to the Tuesday’s upward movement of the price indices, which also resulted in a ‘pull-effect’ brining increased number of retail investors to the trading floor.
   A DSE stock broker said investors rushed for the shares of the bank as the Swiss-based ICB Financial Group Holding bought 50.1 per cent stake worth Tk 350.67 crore in the bank.
   The group in February last purchased the stake in the bank as per the government’s restructuring plan for the financial institution. In May, the bank with new management started full operation as the government moratorium imposed on the lending operation of the bank was lifted.
   The SEC kept the share trading of the problematic Oriental Bank suspended from June 21, 2006 following a request from the Bangladesh Bank. The central bank took over the ailing bank in June 2006.
   On Tuesday, share price of ICB Islamic Bank rose by 100 per cent to close at Tk 1856.
   Share price of the bank was at Tk 928 on June 21, 2006. Face value of its share is Tk 1000 each.
   Of the total 232 issues traded at the DSE, 198 advanced, 23 declined and 11 remained unchanged.
   Turnover at the DSE also increased to Tk 247.41 crore from the Monday’s Tk 169.35 crore crore.
   LankaBangla Finance topped the turnover leaders with total transaction of Tk 19.89 crore.
   Square Pharmaceuticals, Beximco Pharmaceuticals, BRAC Bank, Aims 1st Mutual Fund, Shahjalal Islami Bank, Union Capital, AB Bank, Beximco and Lafarge Surma Cement were also among the top 10 turnover leaders.

The Bangladesh Engineering Industry Owners Association on Tuesday urged the government to withdraw the proposed Value Added Tax on repairing service in light engineering sector.
   The association leaders in a news briefing at Dhaka Reporters Unity said the proposed VAT on the repair service would have an adverse impact on the light engineering sector.
   Abdur Razzak, president of the association, in a written statement said there was no VAT on repairing service since the introduction of VAT in the country in 1991.
   But unfortunately, in the current budget the government has proposed VAT on repairing service, Razzak said.
   It is inhuman as repairing service is nothing but the wage of workers, and if imposed, it will make room for corruption, the president apprehended.
   At least six lakh people including owners, entrepreneurs, technologist and skilled and semi-skilled workers are directly involved in around 40,000 light engineering industries in the country.
   With our limited capacity, every year the light engineering sector is achieving 30 growths. In 2005-06 fiscal, about $236.45 million was earned from export in light engineering sector, which was up from $111.20 million in 2004-05 and $85.02 million in 2003-04, the president said, quoting the statistics of Export Promotion Bureau.
   Besides, the government in its export policy for 2007-2009 declared the light engineering sector as the highest priority sector and declared 10 per cent cash incentive to encourage export in this sector, he said.
   The association president rather urged the government to impose VAT on the repairing industries, which provide repair services after taking part in bidding in light engineering sector.
   Among others, the association vice-president, Abul Hashem, senior vice-president Anawar Hossain and former secretary general Abdul Hakim were present.

OPEC president Chakib Khelil on Tuesday rebuffed calls from oil consuming countries to increase supply, saying the cartel had already done what it could on high prices.
   ‘OPEC has already done what OPEC can do and prices will not come down,’ Khelil told journalists as he arrived for a meeting with EU energy officials in Brussels.
   Ahead of a summit between producers and consumers in Jeddah last weekend, OPEC heavyweight Saudi Arabia had promised to lift its oil production by 200,000 barrels per day.
   However, Saudi Arabia’s increased output, to counter the fears of inflation-hit consumers, exposed divisions within OPEC at the summit, with Khelil and others opposed to a production hike.
   ‘Other member countries don’t want to increase their production because, as they’ve said many times, from our perspective we don’t see any shortage in the market,’ OPEC secretary general Abdullah al-Badri said.
   Oil prices rose towards 138 dollars a barrel on Tuesday, closing in on record highs amid lingerong concerns about supplies from the cartel.
   In the face of calls from consumer countries for an oil output hike, al-Badri insisted that ‘the market is full of oil,’ blaming ‘other factors’ for the high price of crude, including refinery problems and hedge funds piling into the market.
   Khelil blamed high prices on the US ‘subprime crisis and the ensuing impact of the dollar devaluation and the influx of funds that were loooking for good returns that they could not find in other investments.’
   He estimated that hedge fund zeal for positions in the oil market added 40 dollars to crude prices.
   With oil supply currently greater than demand, Khelil said that the course oil prices take in the coming months depended on the dollar’s exchange rate and geopolitical tensions.
   ‘The market is probably waiting to see how the dollar is going to evolve in July, and how the geopolitical situation is going to evolve with the threats on Iran,’ Khelil said.
   ‘If you can answer those questions, I can answer the question on price.’
   EU Energy commissioner Andris Piebalgs urged OPEC to do away with the grouping’s production ceiling in order to provide relief to the market.
   ‘In my opinion, there is no reason to keep ceilings on production,’ he told journalists.
   ‘If there are no ceilings, markets will adapt much faster,’ he added. ‘In this respect we could expect prices to go down, not going up as the tendency has been till now.’
   French Energy Minister Jean-Louis Borloo, whose country takes on the European Union’s rotating presidency in July, stressed that high oil prices were a concern for consumers and producers alike.
   ‘There’s not the producers on one side and consumers on the other,’ he said. ‘We’ve entered a period where we really have to agree on a global energy pact because our interests are clearly linked.’
   ‘We’ve got to decrease our energy needs. Producer countries have to participate, there needs to be clarity and transparency about needs and supply,’ he told journalists.

The Securities and Exchange Commission has decided not to exercise its authority to make the bank declassify their shares.
   The commission did not feel that it is necessary to exercise its sweeping power of 2CC clause and ask the banks to declassify shares, said a high official of the regulatory watchdog body on Tuesday after a meeting of the SEC with the Bangladesh Bank and chairmen of different banks.
   Under the 2CC clause of the Securities and Exchange Ordinance, 1969, the SEC has power to impose conditions it thinks fit on any listed companies.
   The central bank on March 30 sent a letter to the finance ministry informing them that there is classification of banks’ shares and the commission should instruct the banks to declassify them.
   The finance ministry, consequently, on May 5 sent a letter to the SEC, asking it to instruct the listed banks to declassify their shares.
   The banks’ chairmen informed the meeting that the banks had not declassified their shares and the SEC was not interested to use its power, said the commission official.
   When drawing attention to the finance ministry’s letter, he said as far as share market is concerned there is no problem in the transactions of bank shares.
   Earlier in April, the SEC chairman claimed that listed banks do not classify their shares into sponsor and general investors, which goes against the central bank’s observations.
   Banks have continued to categorise their shares for general investors and sponsors, who still dominate the boards, Bangladesh Bank said in the letter to finance ministry.
   The central bank’s observation was also supported by the chairman of a private bank, who stated that the bank’s board comprised 11 directors from category A shares representing sponsors and 2 from category B representing general investors.
   The representation of general shareholders is limited and only 1 or 2 general shareholders are included in the boards in each private bank, said the letter.
   The central bank said it appeared that the listed banking companies were not complying with the 2005 instruction of the Dhaka Stock Exchange, which requires the bank to declassify their shares.
   Banks also continued to maintain categories for sponsor and general shareholders, which is not allowed by the Company Act, 1994.

The Bangladesh Electrical Merchandise Manufacturers Association will organise a three-day electrical products fair today at the Sonargaon Hotel in the Dhaka city with the view to introducing buyers with locally manufactured products.
   The association president, Enayet Hossain Chowdhury, disclosed this at a press conference at Dhaka Reporters Unity on Tuesday, adding that commerce and education adviser Hossain Zillur Rahman is expected to inaugurate the fair.
   The co-organisers of the fair are IFC-South Asia Enterprise Development Facility and Light Engineering Products Business Promotion Council, Enayet said.
   The fair, second of its kind, will remain open to visitors from 10:00am to 8:00pm with no entry fee. A total of 92 stalls will be set up at the fair where 60 companies will take part. The products to be exhibited in the fair are electric cables, household electric appliances, tube light and incandescent bulb, voltage stabilisers, capacitor, IPS-UPS, super enamel copper wire, electric motor, electric fan, electric accessories, transformer, sub-station equipments, light fittings, energy-saving bulbs, energy meter, varnish and others.
   On the sideline, a seminar on the electrical industry will be held at Surma Hall of the hotel, the association president said.
   He also congratulated the government for including electrical and electronic products as special development sector for its betterment.
   ‘Some electrical products are exported in Nepal and Bhutan while we also export transformer and sub-station equipments to the Middle East on a limited scale,’ Enayet said.

Subsidies pose an increasing fiscal burden that emerging Asian economies should move away from, the former International Monetary Fund chief said Tuesday.
   Rodrigo Rato said subsidies only resulted in market distortion, and that their beneficiaries included wealthier segments of society least in need of assistance.
   He said doing away with subsidies would not be easy because of social and political pressures, but maintained that keeping prices artificially low was not feasible.
   'I know that poses a big challenge in societies with a huge amount of people that live with very low incomes but
   the experience in the world is that subsidies are not the response to social policies,' said Rato.
   He said subsidies 'benefit everybody, rich and poor, and I think that emerging economies have to understand, and I think they do, that subsidies have to be substituted by other, more efficient, social policies.'
   China on Friday became the latest Asian nation to curb energy subsidies by increasing retail petrol and diesel prices as much as 18 per cent, moving to close the gap between state-set domestic prices and soaring world oil costs.
   Faced with ballooning subsidy bills, Malaysia recently raised fuel prices by 41 per cent and Indonesia by around 29 per cent leading thousands to protest in both countries. Taiwan and India have also raised energy costs.
   Some countries such as Indonesia also subsidise rice for the poor. Its price and that of other staple grains has soared too.
   'High commodity prices pose certainly a threat to countries as current account deficits increase and subsidies become very costly fiscally,' Rato said in a public lecture.
   Rato is now senior managing director of investment banking at Lazard, a global financial advisory and asset management firm. His term as International Monetary Fund managing director ended last October.

AKM Abdul Hye joined has been promoted to the post of general manager of the Rupali Bank Ltd recently.
   Prior to this, he was the divisional head of various divisions in head office and zonal head of two zonal offices, said a press release.
   He received professional training both at home and abroad.
   Hye did Mcom in Accounting and Bcom (Hon's) degree under Dhaka University. He obtained diploma in banking from IBB and passed Intermediate stage certificate course of 'costing' (with distinction) and 'book keeping and accounting' under London Chamber of Commerce and Industries.

Malaysia will not be adversely affected by interest rates and inflation, despite surging oil and food prices and recent fuel hikes in the country, a minister said Tuesday.
   The comments by second finance minister Nor Mohamed Yakcop come less than a month after the government raised pump prices by 41 per cent in a deeply unpopular move aimed at reducing its subsidies bill, which would have reached 17 billion dollars this year.
   'I don't see a major challenge going forward in interest rates and inflation,' Nor Mohamed told state news agency Bernama.
   'Certainly in a demand pull situation it will be relevant for interest rates to work. At the moment, it is more of a cost push,' he added.
   The minister said he was uncertain if the central bank would use interest rates to curb inflation.
   'I don't really know. Bank Negara will have to say if interest rates is the best way,' he was quoted as saying by Bernama.
   Last month, the central bank said the country's key interest rate would remain unchanged at 3.50 per cent. Malaysia's inflation rate rose to a 22-month high of 3.8 per cent last month from 3.0 per cent in April and 2.8 per cent the month earlier, driven by higher food prices, while for the first four months of the year, it averaged 2.7 per cent. Nor Mohamed said the government was maintaining its growth forecast of between five and six per cent for the year.
   'Our growth rate will be good because the first quarter is over seven per cent. The second half could be slightly affected but overall I think we should get between five and six per cent,' he told Bernama.

Federal Reserve policymakers open a two-day meeting Tuesday looking for a new message to keep inflation expectations in check, without having to boost interest rates, economists say.
   The US central bank headed by chairman Ben Bernanke finds itself in a tough spot, with the US economy teetering on the brink of recession but signs of price pressures that are heating up dangerously.
   The Federal Open Market Committee, set to announce a decision on Wednesday around 1815 GMT, is widely expected to hold the federal funds rate steady at 2.0 per cent.
   The central bank has slashed rates since last September by 3.25 percentage points in an effort to reignite growth, but officials are signaling that cycle of cuts is probably over, and that inflation is now the biggest threat.
   Joseph LaVorgna, senior economist at Deutsche Bank, said the language of the Fed statement will be under close scrutiny.
   ‘In light of recent hawkish comments from various policymakers, the focus will be on the tone of the official meeting statement and a possible shift in the balance of risks,’ he said.
   ‘We expect the recently accentuated inflation concerns among policymakers to be more formally noted in the official rhetoric, thereby striking a slightly more hawkish tone. However, we do not believe the Fed will go so far as to adopt an explicit tightening bias.’
   Many analysts say the US economy is still too fragile to be able to absorb higher interest rates amid a horrific housing slump, high oil prices and tight credit conditions.
   John Praveen of Prudential International Investment Advisers said that although financial markets are pricing in rate hikes in the second half of the year, he does not expect any.
   ‘With rising unemployment and job losses, steady core inflation, continued stress in financial markets, and no signs of a bottom in the housing market, we do not expect the Fed to tighten,’ he said.
   Moreover, many say the Fed does not want to risk being seen as injecting itself in politics during a presidential campaign and will most likely refrain from any major actions until the election is over.
   ‘The Fed normally does not raise interest rates preceding a national election,’ said David Kotok at Cumberland Advisors.
   In the meantime, the Fed is trying to ‘jawbone’ public expectations in what amounts to a bluff on hiking rates.
   ‘The Fed is now battling inflation expectations, not inflation itself,’ said Joel Naroff at Naroff Economic Advisors.
   ‘The first step in that war is jawboning, which is going on like crazy. We will not likely see the next action, rate hikes, until late in this year at the earliest.’
   But some economists say the Fed is trying to set the stage for rate hikes.
   Despite economic headwinds, says Aneta Markowska at Societe Generale, ‘investors expect that the Fed will embark on a rate hike cycle as soon as September.’
   Brian Wesbury at First Trust Portfolios argues that the Fed must begin hiking rates soon to get ahead of inflation, since monetary policy’s impact comes with a lag of several months.
   ‘We now believe the Federal Reserve is nearing an aggressive move upward in short-term interest rates, one that will ‘shock and awe’ those who believe the Fed will eventually embark on only modest increases in the federal funds rate, if it does so at all,’ Wesbury said.
   He said the Fed will take note of ‘increasing signs that inflation expectations, which have already leapt upward in consumer surveys, are filtering into investors’ decisions.’
   Wesbury said he expects no change at this week’s meeting but that the Fed will likely prepare financial markets for a hike later this year.
   ‘We now anticipate that the Fed will lift the funds rate from 2.0 to 3.0 per cent by the end of 2008 and then 5.0 per cent by the end of 2009, with more rate hikes to follow in early 2010,’ Wesbury said.

Just six months after Lupe Alvidrez bought a brand new pickup truck for his wife, he drove back to Odessa, Texas to buy her a small car to drive instead.
   After looking at their fuel bills, he realised they would save about 300 dollars a month even after they made payments on both vehicles.
   ‘Sometimes you make a goof and sometimes you don’t. This just had to be a bad one I guess,’ the welder told AFP.
   ‘We figured out we were paying close to a thousand dollars a month worth of fuel.’
   Norma Alvidrez drove more than a hundred miles a day to get to work and then to check on her patients in rural West Texas.
   The truck was a treat to replace her bulky minivan, but she’s much happier in her little Honda Civic, even if it gets a bit bumpy on the country roads, Alvidrez said.
   Rural residents have been particularly hard-hit by high fuel prices because they tend to have lower income levels and often have to drive for miles to get to the nearest store, doctor or even to visit their friends and family.
   They usually don’t have access to public transit and
   also tend to drive larger
   vehicles because of cultural preferences and towing and hauling needs.
   That’s especially true in the Lone Star state, where ad lines and tee shirts proclaim ‘Everything’s bigger in Texas.’
   Not too long ago, one out of every four vehicles sold in Texas was a pickup truck, and roads were clogged with hulking sports utility vehicles.
   Texas produces 20 per cent of the nation’s oil and fuel prices have typically been well below national averages.
   But even in the heart of the oil fields, petrol is now selling for more than four dollars a gallon.
   Fuel costs are expected to account for 4.2 per cent of average US disposable income by the end of the summer, said Brian Bethum, chief US financial economist for Global Insight. That’s up from just 3.7 per cent in the first half of the year and fast approaching the record 4.5 per cent set at the peak of the OPEC oil crisis in early 1981.
   In some rural counties, average fuel costs now account for as much as 16 per cent of median income, according to a report by the Oil Price Information Service.
   And there are 661 US counties where fuel accounts for at least eight per cent of median income.
   Some people are cutting back on going out. Others are trimming their grocery bills by cutting back on meat or fresh vegetables. There have also been reports of gas being stolen out of parked cars and people switching jobs to shorten their commutes.
   An Odessa car dealership has started offering ‘guaranteed trade-ins’ in television ads touting the fuel economy of its Hondas, Mazdas and Kias: Asian brands many self-proclaimed rednecks would not have been caught dead driving a few years ago.
   ‘It’s been pretty crazy,’
   said Anthony Wood, sales manager for Kelly Grimsley Auto Group.
   ‘We just got a truck full of Hondas pull up and I don’t expect to see them next week. We can’t keep ‘them.’
   One customer was even willing to learn how to drive a stick shift so she wouldn’t have to wait any longer to switch out of her sports utility vehicle, Wood told AFP.
   Randall Roberson, an appliance technician, has had to stop taking his daughter on fishing and hiking trips because he can’t afford the extra fuel.
   ‘I was fixing to get me a camel or a burro or something,’ he joked as he filled up his tank.
   ‘I’ve got my house paid for and my truck paid for but have to watch my money a lot better or walk.’

Ireland’s economy will plunge into recession in 2008 for the first time in 25 years as it suffers from downturns to the consumer and construction industries, a leading economic think-tank said on Tuesday.
   The Economic and Social Research Institute slashed its estimate for Irish gross domestic product growth to minus 0.4 per cent this year, down from its last forecast of 1.8 per cent.
   In its quarterly commentary the ESRI said it also expects gross national product — the government’s preferred measure of economic growth — to drop to minus 0.4 per cent from its forecast of 1.6 per cent made three months ago.
   The Institute said the last time Ireland had experienced negative GDP was in 1983 and the last time there had been negative GNP was in 1986.
   GNP is regarded by the government as a more accurate barometer of the country’s economic performance as it strips out substantial profits earned by multi-national companies in Ireland which are then taken out of the country.
   The ESRI said the forecasts for 2008 ‘represents another in a series of downward revisions’ for the year.
   ‘In earlier commentaries, our downward revisions were related to an acceleration in the construction downturn.
   ‘This time, it is our revised forecast for consumption that contributes most to the overall revision. We now expect consumption to grow by just 1.0 per cent in 2008.
   ‘This is a dramatic slowdown from the last three years when consumption growth has averaged over six per cent,’ the ESRI added.
   The commentary expects a modest upturn in 2009 with GDP growing at 1.9 per cent and GNP by 2.0 per cent.
   A spokesman for the Institute describes it as one of their ‘gloomiest’ ever forecasts and the commentary says ‘a number of stark implications’ arise from the predictions.
   ‘We expect the general government deficit could be 2.8 per cent of GDP in 2008 and 3.9 per cent of GDP in 2009.
   ‘Hence, we expect that the three per cent deficit limit under the Stability and Growth Pact will be breached in 2009.
   ‘On average across the year, the number employed in 2009 will be lower than the corresponding number in 2007.
   ‘We expect net outward migration to resume in 2009, at a rate of 20,000,’ added the think-tank.
   One of the main expressions of Ireland’s extraordinary conversion from a poor agrarian economy to a dynamic and high-tech power house is a massive rise in property prices.
   Ireland is known for its so-called Celtic Tiger economy, which refers to a period of double-digit growth during the 1990s which placed the eurozone-member among the richest nations in Europe.
   Major US companies with bases in Ireland include hi-tech giants Apple, Dell, Google and Microsoft.

UAL Corp, parent of United Airlines, said on Monday it plans to lay off 950 pilots as it prepares to cut domestic capacity to offset soaring fuel prices.
   ‘As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult but necessary step to reduce the number of people we have to run our business,’ the No 2 US carrier said in a statement.
   The latest layoffs involve nearly 15 per cent of United’s 6,518 pilots. The carrier has said it plans to cut its staff by 1,400 to 1,600 as it aims to reduce domestic capacity by 14 per cent in the fourth quarter. The airline industry has been battered by record high fuel costs, and major carriers are groping for stability through capacity cuts that enable them to run leaner operations and charge higher fares.
   A spokesman for the Air Line Pilots Association, the union that represents United pilots, was not immediately available for comment.
   ‘We continue discussions with ALPA and all of our unions on ways to mitigate involuntary furloughs, and we are working to notify all of our employee groups about furloughs as soon as we know the impact of our capacity reductions,’ UAL said.
   UAL, which has 55,221 employees, lost $537 million in the first quarter and has held merger talks with rivals to try to bolster its competitive position amid rising fuel costs. The carrier recently said, however, that it does not plan to merge with another airline but will enter into a global cooperation with Continental Airlines.
   UAL’s downsizing is consistent with recent steps taken by AMR Corp’s American Airlines, which said last month it would cut its domestic capacity by 11 per cent or 12 per cent in the fourth quarter and eliminate more than 1,000 jobs.
   In March, Delta Air Lines, which plans to merge with Northwest Airlines, said it would cut 2,000 jobs through voluntary retirement and reduce domestic capacity by 10 per cent this year.

Iranian president Mahmoud Ahmadinejad on Monday again dismissed calls for oil producers to ramp up production in response to high prices, saying the market was oversaturated with more crude than it was consuming.
   ‘I feel that oil prices are going up artificially. There is a game going on behind it,’ said Ahmadinejad in an interview with state television focused on his controversial handling of the economy.
   ‘The market is now oversaturated and oil is being pumped beyond consumption. Consumption growth is less than production,’ he said.
   Iran, the number two producer in OPEC after the oil cartel’s kingpin Saudi Arabia, has responded much more coolly than the kingdom to calls for producers to hike production in response to record prices.
   Saudi Arabia’s King Abdullah on Sunday condemned oil ‘speculators’ at a summit of leaders that debated the spiralling price of crude, which has doubled over the past year.
   The king also announced Saudi output had risen to 9.7 million barrels per day from 9.45 million barrels earlier, amid growing calls from consumer nations for the feverish rise in crude prices to be brought under more control.
   Tehran has always insisted that the oil price is not being driven by fundamentals and has been caused by factors such as the rapid devaluation of the dollar.
   In Monday’s interview, Ahmadinejad said that if Europeans were so worried about high petrol pump prices they should allow Iran to set up its own petrol stations on the continent which would not charge the usual hefty taxes.
   ‘Now the European countries are earning more in taxes than the oil’s real price. If the Europeans allow us we are willing to set up gas stations there and sell gas at lower prices,’ he said.

High oil prices are eating into Japanese corporate earnings, which may prompt firms to reduce their business investment, Japan’s economic and fiscal policy minister said Tuesday.
   ‘It’s not only corporate sentiment that is worsening, oil prices are having a real negative effect on corporate profits, especially small and medium-size businesses,’ Hiroko Ota said at a press conference.
   Amid the worsening business climate, companies may cut their spending on new equipment and factories, she said.
   ‘For now, it’s still just sentiment toward spending that is weakening, but it is likely that spending, too, will slowly be affected.’
   A government survey released Monday showed sentiment among top Japanese executives at the worst level in at least four years, adding to concerns about the outlook for Asia’s largest economy.

Japan’s Toyota Motor, in a close race with General Motors for the title of the world’s top automaker, may suffer a decline in US sales for a second straight year, a top executive warned Tuesday.
   The Japanese auto giant has previously said it aims to exceed last year’s US sales of 2.62 million vehicles in 2008.
   ‘But we cannot help but say it’s difficult to top last year’s figure,’ vice president Tokuichi Uranishi told a meeting of shareholders in the central city of Nagoya, according to a company spokesman.
   Sales of automobiles, particularly large vehicles, are slumping in the United States due to soaring fuel prices and slack consumer spending amid a weaker economy and mortgage crisis.
   Toyota suffered a two-per cent decline in sales in the United States last year following a 12-per cent gain the previous year.
   The company said earlier this month that it would cut production at three US plants in Texas, Indiana and Alabama.

The dollar fell against the euro in European trading on Tuesday, on the eve of the Federal Reserve’s latest decision on US interest rates.
   The European single currency rose to 1.5569 dollars in morning London trade from 1.5513 dollars in New York late on Monday.
   Against the Japanese currency, the dollar increased to 108 yen from 107.87.
   ‘The focus for the market will be on the FOMC decision tomorrow,’ said Barclays Capital foreign exchange analyst David Woo.
   Market players were looking ahead to the Federal Open Market Committee’s two-day meeting slated to begin on Tuesday at which US interest rates are expected to be left unchanged at 2.0 per cent.
   With the result already priced in, ‘all of the players
   are now paying attention to the policy statement, trying
   to gauge how seriously the
   Fed will hint at a future rate hike,’ said Resona Bank senior client manager Shigeru Nakane.
   The Fed has slashed its key rate by 3.25 per centage points since the subprime, or high-risk, mortgage crisis erupted in mid-2007.
   While market players have scaled back their expectations of a series of US rate hikes this year, they still see a chance of one or two quarter-point rate rises by the end of 2008 to keep inflation under control, dealers said.
   The euro meanwhile rebounded moderately on Tuesday after sliding overnight on weak economic indicators, including Germany’s key Ifo business climate index,
   which dropped to an 18-month low in June due to high oil prices.
   ‘It appears that the eurozone economy is slowing and expectations could recede that the ECB will continue raising interest rates,’ Resona Bank dealer Keiichi Iguchi told Dow Jones Newswires.
   ‘The euro may remain on a downward trend for the time being.’
   It was a mixed day for European economic data published on Tuesday, with Italian consumer confidence below market forecasts and a French business confidence index reading beat expectations.
   In London trading on Tuesday, the euro changed hands at 1.5569 dollars against 1.5513 late on Monday, at 168.11 yen, 0.7917 pounds and 1.6212 Swiss francs.
   The dollar stood at 108 yen and 1.0413 Swiss francs.
   The pound was at 1.9669 dollars.
   On the London Bullion Market, the price of gold rose to 899.57 dollars per

Oil prices rose towards 138 dollars a barrel on Tuesday, closing in on record highs, as OPEC’s president rebuffed calls from oil consuming countries for increased supplies from the cartel.
   New York’s main oil futures contract, light sweet crude for August delivery, jumped 1.20 dollars to 137.94 dollars per barrel in electronic deals.
   Brent North Sea crude for August climbed by 1.19 dollars to 137.10 dollars.
   ‘OPEC has already done what OPEC can do and prices will not come down,’ the cartel’s president Chakib Khelil told journalists Tuesday as he arrived for a meeting with EU energy officials in Brussels.
   Saudi Arabia, the leading member within the Organization of Petroleum Exporting Countries, said at a weekend summit of oil consumers and producers that it was hiking daily output by more than 200,000 barrels to 9.7 million.
   The move was expected but the world’s lynchpin crude producer said it could significantly raise output again if necessary.
   ‘Everybody’s waiting to see exactly what OPEC can or cannot do,’ said David Johnson, an oil analyst with Macquarie Research. On June 16, crude oil futures hit record highs: 139.89 dollars per barrel in New York and 139.32 in London.
   Analysts said oil prices have been underpinned by recent attacks against foreign oil installations in Nigeria, and by a weak dollar which makes oil priced in the US unit more attractive for foreign buyers.
   Militants blew up a key Chevron supply pipeline over the weekend in the latest attack targeting the African country’s oil industry, company and military sources said.
   The US oil giant was forced to shut down operations after the attack in the Niger Delta, halting output by 120,000 barrels per day, an industry source said.
   The Anglo-Dutch oil giant Shell has added that it cannot promise to deliver 225,000 barrels per day for June and July following an unprecedented raid on its offshore Bonga oilfield in Nigeria.
   Unrest in the Niger Delta has cut total oil production in one of Africa’s biggest producers by a quarter over the past two years.
   ‘Overall, the market remains well supported, despite Saudi Arabia’s promise to pump more oil,’ Sucden analyst Andrey Kryuchenkov said on Tuesday.

Emirates to start 18 additional flights in India
Emirates in its Indian operation will add 18 additional flights per week, effective from the July 1. Accordingly, being an international carrier in the Indian skies, Emirates will have 132 flights per week, the maximum among the other airlines. The flights will fly form India’s capital, New Delhi, and its information technology hubs, Bangalore and Hyderabad to enhance the booming trade between the two countries, stated a press matter of the Dubai based airlines. Especially, aiming at the holiday season, the new frequencies will be introduced between July and October. The enhanced capacity — 18 flights per week — will provide the corporate travellers smooth connections to international business hubs such as New York, London, Frankfurt, and Paris via Dubai. ‘Having fuelled strong economic and trade ties between the Middle East and India since the start of its services in 1985, Emirates is well-poised to support India’s blistering growth in the 21st century with its efficient, reliable and increased air links.’
— New Age

CCH goes to trial of automation system
Chittagong Customs House goes to trial operation of its automation system at the port for realising tax from today (Wednesday) and will implement full operation by June 30. Implementation of the automation system would increase revenue income by Tk 5,000 crore annually, Customs officials said, adding that it would also bring an extra momentum in country’s export-import business. They informed that the taxation functions under the automation system would be completed in six phases instead of 42 phases under the current manual system. A team of 22 IT specialists accomplished the project during the past one year involving over Tk 1 crore, sponsored by the Chittagong Chamber of Commerce and Industry.
— New Age