The government through a new import policy order 2009-2012 has decided to allow small businessmen to import some essential food items without opening letter of credit for ensuring smooth supply of the essentials in the local markets, official sources said.
   ‘Small importers will be encouraged to import essential commodities to ensure supply to the kitchen markets,’ a senior official of the commerce ministry said, adding that this would break the syndicate of food importers.
   The proposed three-year import policy order will be placed before the cabinet committee on economic affair tomorrow with the commerce ministry identifying eleven essential food items — rice, flour, edible oil, milk, onion, meat, potato, sugar and eggs — to be allowed initially.
   Sources said the government has taken that decision of allowing the import of essential foods without opening L/C after the price of sugar was deliberately increased by the cartel of sugar refineries during the month of Ramadan.
   Small importers cannot enter the sugar market as they cannot match the big investment of the refineries, the sources added.
   The country’s refineries before and during the Ramadan issued delivery orders of sugar at their will to destabilise the market and increased the mill gate price by 30 to 40 per cent which subsequently effected the wholesale market, sources said.
   Former commerce secretary Sohel Ahmed Chowdhury told New Age that the small importers of the essential food items would be encouraged to import as they would not need much money to open letter of credit.
   He, however, expressed doubts saying that,‘The government has taken the initiative to reduce the influence of the syndicates, but the global trade has become so complicated that small importers may not be able to cash on the situation.’

The Bangladesh Bank has decided to provide soft loan for producing potato seeds through tissue culture.
   A central bank circular issued last week advised all the commercial banks that the potato seed production through tissue culture would be given low cost loan facility under the guideline of the Agriculture and Rural Credit Policy and Programme for 2009-10 fiscal year.
   Earlier on July 14 this year, the central bank announced Agriculture and Rural Credit Policy and Programme to help boost the country’s crop productions and rural economy.
   The policy offers a range of financial supports to the agriculture sectors at low interest rates.
   The amounts of the loan, interest rate, time-frame and recovery policy for the potato seeds producers through tissue culture, however, have not been finalised.
   The BB rendered this responsibility on the banks and suggested them to discuss with the agriculture officials or with the Agriculture Extension Division of the respective areas to assess the feasibility of this agro industry before offering them loans.
   The banks are also advised to set the credit limit, rate of interest and recovery policy as per the suggestions of the agriculture officials.
   Producing potato seeds through tissue culture has increasingly been gaining popularity particularly in the country’s northern region.
   According to official sources, Bangladesh Agriculture Development Corporation has targeted to produce 25,000 tons of seed potato through tissue culture technology by 2012.
   Besides the government initiatives, some private companies are also planning to set up laboratories in the northern region for producing potato seed, using tissue culture technology.
   BADC officials said that the tissue cultured seeds are high yielding and virus and disease free and thus comparatively cost effective to produce potato. But the supply of quality potato seed is far below the demand, leaving most farmers no option than using low quality seeds.
   According sources, the BADC supplies only 12,000 metric tons of quality seeds against the annual demand of six lakh tons. Farmers are using the seeds to produce about 75 tons of potato a year.
   A Bangladesh Bank official said the soft loan facility would help increase production of quality potato seeds, which would eventually raise the potato yield and the income of potato farmers.

Two central effluent treatment plants are expected to go into operation next year in the export-processing zones in Dhaka and Chittagong to better manage toxic waste water, officials have said.
   Factories in the EPZs will get the facilities to share the centrally installed ETPs for treating waste water before discharge.
   The projects will be implemented under a private-public partnership, where Singapore-based D-Water CETP Eco System BD Ltd got the contract for constructing the unique plant in the DEPZ. Chittagong Waste Water Treatment Plants Ltd. will install another in the CEPZ.
   The Bangladesh Export Processing Zones Authority in partnership with the Bangladesh Investment Climate Fund (BICF) has initiated the schemes.
   The fund, with contribution from British aid agency DFID and the European Commission, is managed by the World Bank’s lending arm International Finance Corporation.
   Work on installation of the plant at DEPZ began in April, and it will use Electro Contaminant Removal (ECR) machineries, a state-of-art technology in treating waste water.
   Construction of the plant at CEPZ started in July, which will use the traditional bio-physical and chemical technology equipment.
   Peter Niederberger, IFC’s environmental consultant, told bdnews24.com that dyeing and washing plants in Bangladesh often discharge untreated toxic wastes into the water.
    ‘It affects the health and wellbeing of thousands of people in the communities nearby,’ Niederberger said.
   Most of the factories in Bangladesh do not have own plants, though they are required by law to have one, while allegations have it that many such plants installed in factories remain unused.
   Niederberger said they are giving technical assistance to Bepza so its staffs can assess and monitor the design, construction and initial start-up operations of the plants.
    ‘The plants are expected to provide treatment levels that meet the standard requirements of the Department of Environment,’ he said.
   He praised Bepza’s role.
    ‘Its commitment to improving the environmental conditions of its EPZs is commendable, and if it is successful, it may become a model for the rest of the country,’ he said.
   AKM Mahbubur Rahman, member (finance) of Bepza, told bdnews24.com that the dyeing and washing plants in the DEPZ are discharging around 1.20 crore gallons of waste waters every day.
   Though over 25 industries have their own ETPs, many do not operate the plants regularly, as the cost of operations is a bit higher. He said usually Tk 60 is needed to treat every 1000 gallons.
   Because of the negligence, the surrounding areas of the EPZs are facing massive environmental pollution, causing public health hazards.
   Once installed, Rahman said, the factories would require spending Tk40 for 1000 gallons to get service from the central plants.
   After the successful installation of the two projects in the country more such plants would be schemed in other EPZs and industrial areas, Rahman added.
   He said Bepza proposed the government to set up five CETPs for the industries in 2005, but the process was halted in 2007 under the caretaker government.
   Jamil D Ahsan, chairman of D-Water, told bdnews24.com this pioneer project would be implemented with the help of Eco System Ltd., a Singapore- based manufacturing company of effluent treatment plant machineries.
   Md Hasibul Islam, managing director of Chittagong Waste Water Treatment Plants, told bdnews24.com, ‘We’re developing the basic structure now. Hopefully the plant will go in operation by July next year.’
   Projected cost of the plants was estimated $ 5 million for DEPZ and $ 7 million for that of CEPZ.
   On June 23, the High Court ordered installation of ETPs for all industries, including the tanneries, by June 2010, following a petition by environmental and human rights groups.
   The court also directed the industries secretary to ensure that no new industry is set up without effective steps to check environmental pollution.
   Industries minister Dilip Barua on July 19 said that all new industries must get ETPs.
   The central bank in its recent refinance scheme of Tk 200 crore included low-interest loans for setting up ETPs.

Gold prices surged to levels approaching 1,000 dollars per ounce Thursday amid caution by financial market players and worries about the gaping US budget deficit.
   In late New York trade, gold was fetching 997.70 dollars per ounce after moving as high as 999.50 dollars on the New York Mercantile Exchange.
   That neared the highs of the year of 1,006.29 dollars reached on February 20.
   Gold, which is often seen as a hedge against inflation and economic turmoil, hit an all-time record price of 1,032.70 dollars in March 2008.
    ‘A surge in safe-haven buying as the equity market performance continued to deteriorate and the dollar weakened boosted prices,’ said Suki Cooper, analyst at Barclays Capital.
   Dax Wedemeyer at US Commodities said that ‘you have a lot of investors starting to pull some of their investments out of the equity market (and buy) gold, because they may think stock markets have run their course, they’re starting to lose momentum.’
    ‘There’s no doubt that there are both seasonal and long-term trends working in gold’s favor,’ said Josh Lipton of the financial website Minyanville.
   Because gold is priced in dollars, the rise could reflect waning confidence in the US currency at a time when US budget deficits are hitting record levels, some noted.

A migrant worker annually remit Taka 101,595 on an average in four to five instalments which is 2.4 times per capita GDP, a World Bank study said.
   The study revealed that migration involves large upfront costs that is 3 to 4 times per capita GDP but also has high annual returns in terms of remittances.
   Migrant workers sent $ 9.6 billion in remittance in last fiscal year. About 4.5 million expatriates sent this amount. The World Bank report said remittance inflow jumped rapidly but still the Bangladeshis are mostly unskilled.
   Bangladesh’s economic report said the remittance growth of the country depends critically on the number of workers going for work abroad but international oil price, exchange rate and GDP growth have also influenced the size of remittance inflow.
   According to the Bangladesh Bank and Bureau of Manpower, Employment and Training, the demand of Bangladeshi workers in global job market is increasing. The demand of female workers job market rose but due to language problem the country failed to catch up the Saudi Arabia, UAE, UK and Kuwait job market.
   The World Bank’s report suggested establishing a cell or a dedicated institution to monitor developments in the global market for foreign labour demand.

Japan’s Toshiba Corp plans to bid for French nuclear group Areva’s power transmission and distribution unit, four sources with direct knowledge of the situation said, in a deal that could top $5 billion.
   Toshiba, which runs a far-flung electronics conglomerate, is banking on power generation for growth as it reins in investment in its recession-hit computer chip business.
    ‘If it manages to buy it for the right price, it would be a positive development,’ Deutsche Securities analyst Takeo Miyamoto said.
   But the health of Toshiba’s balance sheet is uncertain following a $5 billion capital hike in May, and its presence as the first foreign suitor for the up-for-sale business might sit uneasily with French government efforts to promote national industrial champions.
   Areva has put its transmission and distribution (T&D) business on the block and is seeking to sell 15 per cent of the group’s capital to fuel its nuclear expansion plans. The government will play a major role in both decision for the 91-per cent state-owned firm, already a global leader in nuclear technology.
   The political argument against a sale of T&D to Toshiba would be weakened if reported plans for an influx of Chinese money into the group prove correct. A Chinese sovereign fund is in talks to take a stake in the Areva, French daily Les Echos reported on Thursday.
   A French industry ministry spokesman did not immediately return calls for comment on how the state would view a foreign buyer for Areva’s T&D business.
   Toshiba’s shares fell 2.3 per cent after news that it might bid broke.
   First-round bidding for Areva’s transmission and distribution unit — No.3 in its field after ABB and Siemens — is expected to begin in mid-September.
   Declared bidders so far include French engineering groups Alstom and Schneider Electric, who are planning a joint offer. Axa Private Equity is considering making an offer with financial or industrial partners.
   French Economy Minister Christine Lagarde said this week she hoped Areva would reach a decision on the possible sale of the unit by the end of 2009.
   The business brought in about 38 per cent of Areva’s 13.2 billion euros in revenue last year.
   One Japanese source said the deal could be worth more than 500 billion yen ($5.4 billion), while another said the unit could fetch as much as 700 billion yen.

French auto maker PSA Peugeot Citroen is considering a tie-up with Mitsubishi of Japan, the financial newspaper La Tribune reported on Friday, and the price of PSA shares jumped.
   The paper, citing no source, said that Peugeot head Philippe Varin was ‘actively considering an alliance with Mitsubishi.’
   The two groups have already joined forces to develop an electric vehicle and have a partnership in Russia. The paper described a Peugeot-Mitsubishi alliance as ‘technically and geographically ideal.’
   The price of shares in PSA Peugeot Citroen jumped by 6.57 per cent to 19.87 euros here. The overall market as measured by the CAC 40 index was showing a gain of 0.53 per cent.
   Shares in rival French group Renault rose by 3.72 per cent to 29.87 euros, and stock in French tyre maker Michelin by 3.89 per cent to 51.44 euros.
   At Natixis Securities, analysts said in a note to clients: ‘The idea (of an alliance with Mitsubishi) is not new and could make sense for several reasons, particularly since BMW has totally ruled out any idea of a capital alliance.’
   Natixis said: ‘Peugeot sells mainly in Europe while Mitsubishi is present mainly in Japan.’ Mitsubishi also had a presence in the United States.
   At CM-CIC Securities, analyst Guillaume Angue said that the purpose was to make the French group more international and to ‘strengthen its presence on growing markets’ and he thought that an alliance was probable.
   Currently Europe accounts for 66 per cent of PSA Peugeot Citroen sales, he said. Mitsubishi seemed to be a reasonable target for PSA in terms of size because it had sold 1.06 billion vehicles last year compared to 3.26 billion by PSA.
   He said that PSA had limited financial means but that a deal could be arranged via an exchange of paper. PSA could make a private issue of up to 20 per cent of its capital.

Most Asian markets rose in cautious trading Friday as investors looked ahead to a key US jobs report for clues about the outlook for the world’s largest economy — an important export market for Asia.
   Trading has been jittery the last couple of weeks amid worries that the rally in global markets since March may have been overdone. China’s stock market, which has been particularly volatile, edged higher by the afternoon.
   Top finance officials from the Group of 20 gathering in London Friday were expected to stress their commitment to boosting the global economy, although there was likely to be disagreement over when exactly to scale back stimulus efforts amid growing signs of recovery.
   Investors were heartened by the modest advance Thursday on Wall Street, where markets broke a four-day slide. But many were holding back until the US Labor Department released jobs numbers later Friday. Economists expect the unemployment rate to edge up to 9.5 per cent from 9.4 per cent, while the number of layoffs is expected to slow to 225,000 from 247,000.
    ‘The movement seems to be very much sideways because the investors are waiting for more indications such as the US employment data to be released tonight,’ said Ben Kwong Man Bun, the chief operating officer at KGI Securities.
   ‘It’s stabilising a bit, but there’s too much uncertainty about whether rebound can be sustained,’ he said.
   Hong Kong’s Hang Seng index rose 105.69 points, or 0.5 per cent, to 19,867.37, while Australia’s S&P/ASX 200 index advanced 7.3 points, or 0.1 per cent, to 4,436.9. In mainland China, the Shanghai Composite index climbed 6.03 points, or 0.2 per cent, to 2,851.56, after surging 4.8 per cent Thursday.
   Japan’s Nikkei 225 index, meanwhile, slipped 27.53 points, or 0.3 per cent, to 10,187.11, and South Korea’s Kospi slid 0.3 per cent to 1,608.90.
   Markets in India, Thailand and the Philippines all advanced.
   US stock index futures were down slightly, suggesting a tepid open on Wall Street Friday.
   In New York Thursday, stocks gained in light trading. The Dow Jones industrial average rose 63.94, or 0.7 per cent, to 9,344.61, while the S&P 500 index climbed 8.49, or 0.9 per cent, to 1,003.24. The tech-heavy Nasdaq composite index rose 16.13, or 0.8 per cent, to 1,983.20.
   Oil prices rose, with benchmark oil for October delivery gaining 25 cents to $68.21 a barrel in electronic trading on the New York Mercantile Exchange.
   In currencies, the dollar edged up to 92.60 yen from 92.56 yen late Thursday in New York. The euro rose to $1.4264 from $1.4254.

Stocks edged higher at the close of trading Thursday, as Wall Street mulled data showing mostly better retail sales, a modest improvement in employment and ongoing struggles for the services sector.
   The Dow Jones Industrial Average climbed 63.56 points (0.68 per cent) to 9,344.23 in final trades amid volatile trading.
   The tech-heavy Nasdaq composite added 16.13 points (0.82 per cent) to 1,983.20 and the broad-market Standard & Poor’s 500 index was up 8.46 points (0.85 per cent) to a provisional close of 1,003.21.
   The Dow and S & P posted their first gains in five sessions as the market reacted to a series of economic data ahead of the release of key official August employment data on Friday.
    ‘The report will be the primary item of focus for participants, since many economists believe that it is a telling sign of the economy’s health,’ analysts at Briefing.com said in a note to clients.
   Before the opening bell Thursday, the Labor Department reported that new claims for US unemployment benefits fell to 570,000 in the week ending August 29 from the previous week’s revised figure of 574,000.
   Most analysts had expected the claims to drop to 565,000.
   The four-week moving average, which smoothes out week-to-week volatility, rose to 571,250 while the total number of Americans receiving unemployment benefits rose to 6.234 million.
   Most analysts believe the Friday report will show a loss of 225,000 jobs compared with a 247,000 decline in July and the unemployment rate rising to 9.5 per cent from 9.4 per cent.
   Frederic Dickson, chief market strategist for DA Davidson & Co., said employment trends ‘seem to top everyone’s list of what is important regarding the health of the economy.’

The dollar was steady in Asia Friday as investors held their breath ahead of key US jobs data, amid concern markets may have become over-confident about prospects for a quick economic recovery.
   The dollar was stable at 92.63 yen in Tokyo afternoon trade against 92.64 yen in New York late on Thursday. The euro was little changed at 1.4263 dollars after 1.4252 and at 132.09 yen from 132.04.
   Currency traders took to the sidelines ahead of the August non-farm payrolls report, which is expected to show that the US economy shed 230,000 jobs last month, down from 247,000 in July.
    ‘If realised this would be the least negative reading since August 2008,’ noted Rabobank International analyst Adrian Foster.
   But even recent upbeat economic data have failed to impress financial markets, reflecting concerns that stocks may have risen too far, too fast given the still-uncertain outlook for the global economy.
   Worries about the weak labour market were stirred by numbers showing new claims for unemployment benefits in the United States remained stubbornly high at 570,000 in the week ending August 29 — worse than markets had expected.
   An improvement in the jobs market is seen as vital for a recovery in consumer spending — a key driver of overall economic growth.
   There is ‘doubt about whether US households will increase spending much and contribute to a sustainable economic recovery,’ NAB Capital strategist John Kyriakopoulos wrote in a note.
   The euro failed to get more than a short-lived boost after the European Central Bank left its record low interest rates unchanged at 1.0 per cent and offered a cautiously upbeat economic outlook.
   ECB head Jean-Claude Trichet ‘disappointed expectations by saying the recovery would be bumpy and upgrading growth forecasts only marginally,’ Kyriakopoulos noted.
   Investors will also focus on a weekend meeting of finance ministers and central bank chiefs from 20 major economies in London for clues on whether they will scale back emergency stimulus measures and curb executive bonuses.
    ‘This meeting is unlikely to be a headline grabber but any comment on ‘exit strategies’ for major central banks would be received with interest,’ said Foster.
   Against Asian currencies, the dollar rose to 1.4416 Singapore dollars from 1.4408 a day earlier, to 10,135 Indonesian rupiah from 10,115, to 32.91 Taiwan dollars from 32.88 and to 34.07 Thai baht from 34.03.
   At the same time it fell to 48.69 Philippine pesos from 48.78 and to 1,241.55 South Korean won from 1,245.95.

Oil rebounded in Asian trade Friday ahead of the release of a closely monitored US jobs report that will give fresh clues on the health of the world’s biggest economy, analysts said.
   New York’s main contract, light sweet crude for October delivery, advanced 14 cents to 68.10 dollars a barrel.
   Brent North Sea crude for October delivery was five cents higher at 67.17 dollars.
   The US jobs report, seen as an indicator of economic momentum, will give analysts further clues on whether the American economy is recovering from a recession that began in December 2007.
    ‘Commodity markets will be watching the US employment report for August to be released tonight,’ the Commonwealth Bank of Australia said in a report.
   A smaller-than-expected decline last week in the number of US new claims for unemployment benefits, reported by the Labour Department Thursday, put investors on alert.
    ‘The data are a sobering reminder that the labour market, and consumer spending, will be a drag on growth prospects,’ said Patrick O’Hare of Briefing.com.
   A Credit Suisse report that predicted Asian economies would continue to rebound firmly from the global slump, boosted by improving domestic demand and exports, is likely to bode well for oil demand.
    ‘Asian economies have come a long way from rock bottom and we think there is more spring in the bounce,’ Credit Suisse analysts said in the report.
    ‘Domestic demand played a big role in output growth in many of Asia’s economies in recent months. We now think exports may kick in stronger and sustain industrial output growth for longer.’
   Meanwhile, an upcoming OPEC ministerial meeting in Vienna next week to decide on the oil cartel’s production levels will be closely watched by the market.
   Angola, a member of the Organisation of the Petroleum Exporting Countries (OPEC), has said the cartel should maintain production at existing levels during the September 9 meeting.

China’s foreign exchange regulator said Friday it planned to raise the limits on securities investment by foreign institutions to one billion dollars from 800 million dollars.
   The draft rules, which govern the Qualified Foreign Institutional Investor, or QFII programme, were published on the State Administration of Foreign Exchange website.
   The QFII programme, launched in 2003, is the main way foreign institutions can invest in yuan-denominated equities in China, where the authorities keep strict control over capital flows.
   The new rules are aimed at ‘attracting mid- and long-term investments,’ the foreign exchange watchdog said, adding it would accept opinions on the changes over the next two weeks.
   The agency also slashed the lockup period on investments made by qualified foreign pension funds, insurance companies, and mutual funds down to three months from one year previously.
   The changes come after China’s benchmark stock index slumped 6.74 per cent on Monday, the biggest single one-day fall in 14 months due to concerns over slower lending and a new share supply glut. It sank 22 per cent in August.

Dubai launches next week the first metro network in the Arab Gulf region but it remains to be seen whether motorists in the congested city state, where petrol is subsidised, will be won over.
   The first line of a two-line luxury, driverless, automated metro system is set to open for business on Wednesday, but transport authorities now say only 10 of its 29 stations will be ready for the symbolic date of 09/09/09.
   The challenge will now be to lure motorists enamoured with their petrol-guzzling cars to leave them behind and ride the metro in a city where traffic jams have always been a nightmare for road authorities.
   There are more than one million vehicles registered in Dubai, with cars and buses accounting for some 88 per cent of the total, according to the Roads and Transport Authority.
   This represents a car for nearly every two residents in Dubai, which is home to almost 1.6 million people — mostly expatriates, according to official figures and more than two million according to estimates.
   Petrol is also subsidised across the oil-rich United Arab Emirates and, until recently, car loans were easy to obtain.
    ‘Dubai Metro aims to ease traffic congestion and reduce travelling time, which in effect will reduce air pollution caused by cars and improve air quality,’ RTA said in a statement.
   But none of these issues seem of any concern to Emirati banker Saeed Ali, who is not ready to give up his 4X4 for the fancy blue metro trains which are already pacing the mostly elevated tracks in preparation.
    ‘I don’t think that I’ll use the metro... I prefer to use my car,’ said the 24-year-old, although there is a metro station near his house and another near his office.
    ‘There are many things in our life that we would need to abandon if environmental concerns were to be taken in consideration, not just cars,’ said Ali.
   He said it takes him 20 minutes to get to work and prefers that to having to cope with crowds waiting to ride the metro.
   Several expatriate car owners agreed that driving is more convenient and comfortable than having to walk to and from metro stations in Dubai, which can be miserable most of the year due to high levels of heat and humidity.
   But many low-paid expatriates who rely on public transport or car-pooling, are ecstatic about the metro and cannot wait to enjoy the ride.
    ‘Definitely, I will use the metro’ said Bilal Ahmed, a 29-year-old Pakistani salesman who rides the bus to move around town.
    ‘Time is very important for our business. Buses are always late and we have to wait for hours for an empty one to come,’ he said.
   Ahmed spends 4.50 dirhams (1.2 dollars,0.85 euros) to travel by bus some 25 kilometres (15 miles) from central Dubai to the Jebel Ali industrial zone.
   The RTA says that metro fares will be affordable for everyone. A trip from one end of the 52-kilometre (32 mile) Red Line to the other will cost 5.80 dirhams.
   The Red Line — which will be followed by a Green Line when the metro system is completed — will run from near Dubai Airport to Jebel Ali, the region’s largest port and free zone area.
    ‘It will be easier to get to work,’ said Rahul Sharma, 32, an Indian salesman at a jewellery shop who car-pools with 24 other people, and spends 250 dirhams on transportation per month.
    ‘We are ready to pay more for the train if it would save us time,’ said Sharma, adding that it currently takes him 90-minutes to cover 30 kilometres to get to work each morning.
   Most of the time is wasted picking up the other members of the car-pool, he said.
   Dubai began building the metro network in 2005 after awarding the project to a consortium led by Japan’s Mitsubishi Heavy Industries. The metro will be operated and maintained by UK support services firm Serco.
   But the building cost has nearly doubled from an initial 16 billion dirhams to 28 billion dirhams, the RTA said on Sunday.
   RTA chief Mattar al-Tayer said the surge in cost was due to modifications to the original plan, which included extending the route and adding on new stations.
   The project is financially ‘guaranteed by the Dubai government,’ Tayer said and the authorities have raised cash by allowing private sector enterprises to name many stations, with 490 million dollars secured so far.
   Dubai has been struggling with mounting debt as a result of the global financial crisis that brought years of economic growth to a halt.
   The remainder of the stations on the Red Line will open by February while the 23-kilometre (14-mile) Green Line, which has 18 stations and was scheduled to open in spring 2010, will now open in the summer of 2010.
   The Dubai Metro appears to simulate the emirate’s passion for luxury.
   Golden shell-shaped stations were designed to evoke a Gulf tradition of pearl diving, while all window-covered walkways leading to the stations are air-conditioned.
   Each train has a first-class coach — not a common treat in metro networks.
   Other oil-rich Gulf countries have meanwhile announced plans to build passenger railways, including the vast desert kingdom of Saudi Arabia which has plans for a 444-kilometre (275-mile) high-speed railroad linking the two Muslim holy cities of Mecca and Medina through the Red Sea port of Jeddah.
   The Saudis are also building a 20-kilometre (12.5-mile) driverless monorail system in Mecca, to shuttle pilgrims to holy sites and alleviate congestion during the annual hajj pilgrimage.
   Saudi Arabia is the only Gulf Arab country to currently have a rail link, with a 450-kilometre (280-mile) route between Riyadh and Dammam, in the Eastern Province.
   The Gulf Cooperation Council is meanwhile still studying a plan to build a rail network connecting its six members — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Japan’s premier-in-waiting Yukio Hatoyama said Friday that free markets alone cannot solve the world’s problems, calling for a balance between regulation and free-wheeling capitalism.
   ‘We are now realising that there is a problem with the simple idea that everybody can be happy by leaving everything to the market,’ Hatoyama told a meeting of the World Economic Forum here.
    ‘There is a role by governments that cannot be justified by market fundamentalism. But strict regulations are not always good. A balance between the market and regulations is required,’ he said.
   Hatoyama, whose Democratic Party of Japan (DPJ) scored a landslide victory in last weekend’s general elections, has vowed to put the interests of ordinary people before those of corporate Japan.
   He raised eyebrows with a recent essay that portrayed Japan’s economy as the victim of US-led globalisation and what he described as ‘unrestrained market fundamentalism and financial capitalism that are void of morals.’
   But Hatoyama, whose party’s election manifesto called for a free trade agreement with the United States, also hit out against protectionism at Friday’s forum.
    ‘We should not forget about our main objective — liberalisation of trade and investment,’ he said.
   In contrast to the outgoing, business-friendly conservatives who have ruled for most of the past half century, the DPJ has pledged to shift the focus to households with cash allowances for families and better worker protection.

India’s trade minister reminded WTO members Friday of the work needed to clinch a new global free-trade pact next year as ministers from more than 30 countries wrapped up a two-day meeting here.
   The head of the World Trade Organization Pascal Lamy and Australian Trade Minister Simon Crean have both talked of entering an ‘end-game’ for negotiations, but India’s Anand Sharma stressed the challenges ahead.
   ‘Now we have some idea how to fast-track these negotiations but a lot of technical work needs to be done,’ Sharma told reporters.
   ‘We have a long way to travel before we can safely say we are in the end game.’
   The Doha round of WTO negotiations began in 2001 with the aim of creating a new free-trade pact that would boost global commerce to help developing countries.
   Deadlock between the major trading blocs, anchored on disputes over farm subsides in rich nations and tariffs on industrial goods in developing ones, has dashed repeated attempts to forge a new pact.
   The last push in July last year in Geneva ended in failure but with new governments installed in Washington and India there was renewed hope for another drive for success sometime next year.
   India’s disagreement with the United States over subsidy protection for poor farmers was widely blamed for the collapse of talks in Geneva.
   In a statement released after the first day of talks here, ministers from the 35 countries attending pledged swift action to conclude the round to boost the ailing world economy.
    ‘This crisis actually gives all members a stronger sense of urgency to conclude the Doha round negotiations,’ China’s Commerce Minister Chen Deming said Thursday, calling a trade deal the best bulwark against protectionism.
   The two days of informal talks are also seen as preparation for further progress at a meeting of leaders of the Group of 20 wealthy and emerging nations in Pittsburgh later this month.
   Elsewhere, a new study by Washington think-tank the Peterson Institute for International Economics calculated a Doha accord could bolster global gross domestic product by up to 700 billion dollars a year.
   But in July, top industrial nations and five emerging economies, including India and China, agreed to put the Doha round back on track and conclude a deal in 2010.
   India took the initiative, seeking to inject momentum into the negotiations by getting ministers to gather in New Delhi to set a roadmap for meeting the deadline.
    ‘There was a unanimous affirmation (at the meeting) of the need to expeditiously conclude the Doha round, particularly in the present critical global economic situation,’ said the statement issued by India Thursday.
   It made no mention of a timeframe, but Lamy said he believed agreement could be achieved next year as long as there was political will.
    ‘The meeting can be the real beginning of the end-game,’ said Lamy.
   While Lamy said 80 percent of the work on a new deal was finished, Sharma cautioned there were still many unresolved issues, especially on farm subsidies and market access for industrial goods.
   Sharma also told developed nations the development mandate was ‘the bedrock of the Doha round’ and could not be compromised.
   Celso Amorim, External Relations Minister of Brazil, one of the other big trade players, said developing countries ‘have no more room for further concessions’ to rich nations.
   Developing countries such as India, which has 235 million farmers, are hesitant to open their markets to what they fear will be cheap crops from overseas.
   As ministers met Thursday, thousands of farmers and social activists blocked a main thoroughfare in New Delhi to demand the government ditch Doha.
    ‘The rich countries with their subsidies will destroy Indian farmers,’ Ajmer Singh Gill, a senior leader of Indian farm group Bharat Kisan Union, told AFP.
   The United States and the European Union are reluctant to abandon large agricultural subsidies that command widespread political popularity.

The global economy ‘appears to be emerging’ from a steep slump and countries should plan to wind down stimulus efforts, International Monetary Fund chief Dominique Strauss-Kahn said Friday.
   ‘The global economy appears to be emerging at last from the worst economic downturn in our lifetimes,’ Strauss-Kahn said in a speech in Berlin.
   The risks of the fragile recovery stalling appeared to be diminishing, as several advanced economies — including France and Germany — had already returned to growth and emerging economies were ‘recovering even more strongly,’ he said in prepared remarks.
   But he warned that problems in the financial sector could persist or even intensify, particularly if efforts to restore banks to health are not completed.
   In light of the fragility of the recovery, Strauss-Kahn cautioned there was ‘a real danger’ countries may end their extraordinary monetary and fiscal crisis measures prematurely.
    ‘Having said this, the time is right for policymakers to formulate their exit strategies,’ he added.
   The former French finance minister said that international coordination of exit strategies would perhaps be even ‘more important’ than the well-coordinated crisis response.
    ‘Greater clarity in communicating policy intentions to the public is also essential to shore up confidence,’ he said.
   Strauss-Kahn was due to travel to London later Friday for a two-day meeting of finance chiefs from the Group of 20 developed and developing countries in advance of a September 24-25 summit in the northeastern US city of Pittsburgh, Pennsylvania.
   The global recovery, Strauss-Kahn said, would likely be ‘relatively sluggish,’ with unemployment continuing to rise through next year.
    ‘A jobless recovery remains a risk. Having so many people out of work has significant economic costs, ranging from lower private demand to a decline in potential growth if structural unemployment rises,’ he said.

Seven European countries on Friday called on G-20 leaders to put together strict limits on bonuses to bank executives, calling excessive payouts not only ‘dangerous’ but also ‘indecent, cynical and unacceptable.’
   In a joint opinion piece in Swedish daily Dagens Nyheter the finance ministers of Sweden, France, Spain, Germany, Italy, Luxembourg and the Netherlands said risks related to payouts should be surveilled very strictly.
    ‘Bonuses guaranteed for more than a year should be banned. Bonuses should be paid out over a number of years and should mirror the individual’s and the bank’s actual performance over time,’ the ministers wrote.
   They urged ministers attending Friday’s Group of 20 meeting in London to join in the work to draw up tighter rules, saying they would ‘obviously be more effective if they are adopted at an international level.’
   The London meeting of finance ministers is meant to lay the groundwork for the summit of leaders of the world’s 20 largest economies to be held in Pittsburgh on Sept. 24 and 25.
   ‘We have to stop some financial actors from returning to the same destructive behaviour as before,’ they wrote. ‘We have to be very clear: this behaviour is not just dangerous, it is indecent, cynical and unacceptable. It is a punch in the face of all the people who are quickly becoming unemployed.’