Monday, 8 September 2008


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Investors move away from Bric

4th September 2008 17:13
Investors are turning away from Brazil, Russia, India and China (Bric) in favour of the Middle East and North African (Mena) stock markets.

According to Alexander Shalash, head of emerging market equities at Swiss wealth management firm Julius Baer, Mena is providing an attractive alternative to countries in the Bric region.

He told the Times that "North Africa has 'come of age'" with a rash of inward investment providing a positive economic outlook.

"Local industries are developing thanks to inward investment and there's more confidence due to economic reforms, a better banking climate and a growing credit sector," he said.

Several Mena countries have enjoyed strong economic growth over recent months. Morocco has enjoyed growth of eight per cent this year, while Egypt and Tunisia have recorded growth of seven and six per cent, respectively.

However, caution has been advised to investors looking at the Egyptian market where a 51.5 per cent rise in the stock market from August to April was offset by a fall of 20.3 per cent.

Oliver Bell from Pictet's Mena fund, added to the Times: "Egypt remains a worry, although clear value opportunities are appearing and some of the froth appears to be coming out of the more expensive regional markets and stocks."

Leveraging knowledge, India now a $1 trillion economic powerhouse

Leveraging knowledge, India now a $1 trillion economic powerhouse

August 14th, 2008 - 7:10 am ICT by IANS -

A file-photo of Manmohan Singh
By Arjun Sen
When Jack Welch, former chief of General Electric, the world’s second largest company, said a few years ago that “India is a developed country as far as intellectual capital is concerned”, it was time to sit up and take notice. Welch made his remarks at the beginning of the new millennium when he was still at the helm of General Electric. Seven years down the line, India has overshot expectations to clock several consecutive years of high-speed growth.

Now, as India enters its 62nd year of independence, the country is well on the path to leveraging this intellectual capital and transforming itself into a global knowledge economy powerhouse - having already clocked $1 trillion in gross domestic product (GDP) during 2006-07.

“I am happy to say India has experienced vigorous growth at an average of 8.8 percent per year for the past four years,” Prime Minister Manmohan Singh told the 15th Summit of the South Asian Association for Regional Cooperation (SAARC) - the eight-nation South Asian regional forum - in Colombo earlier this month.

India is also well on its way to fulfilling the projections made by the world’s top investment bank Goldman Sachs that it will emerge as the third largest economy in two decades and the world’s second largest economy by 2050, behind China but exceeding the US.

Even the otherwise conservative head of India’s central bank, Reserve Bank of India Governor Y.V. Reddy, while moderating India’s economic growth projection for the current fiscal, said the pace of growth would remain fast by any global standard.

“We continue to remain the second-fastest growing economy in the world,” Reddy said, while reviewing the performance of the Indian economy and the central bank’s monetary policy earlier this month.

Over the past 17 years, since India embarked on the path of economic reforms, there have been six governments and five prime ministers, but the economy has moved in just direction - a sustained eight-percent-plus economic growth.

“I am happy that in these past 17 years, despite the many changes in government with different political parties wielding power in New Delhi and in the states, there has been no reversal of the processes of economic reform and liberalisation,” the prime minister said.

There are other facets of India as well that speak volumes about its resurgence as a growing and emerging economy between 1990 and now.

-GDP grew from Rs.5,150 billion to Rs.42,830 billion ($1.7 trillion)

-GDP growth expanded from 4.9 percent to 9.1 percent.

-Per capita income almost doubled from $390 to $740.

-Foreign exchange reserves jumped from barely $1 billion to $310 billion.

-Inflows from foreign funds rose from $1 million to over $60 billion.

-Foreign direct investment shot up from $97 million to $25 billion.

-Exports jumped from $18.1 billion to $155 billion.

-Software and services exports rose from $50 million to $40 billion.

-Mobile phone subscribers base grew from one million to 286 million.

-Food grain output rose from 176 million tonnes to a record 230 million tonnes.

Among the key factors driving this growth is its human capital where India is estimated to have the fourth largest reservoir of scientific talent pool. This has enabled the creation of a formidable knowledge economy.

“Today, the world looks at India - and the enterprising people of India - with respect and admiration,” the Cambridge- and Oxford-educated economist-prime minister said recently.

“By creating an environment in which the creativity and genius of the Indian people has been able to find freer expression, we have strengthened India’s global standing,” added Manmohan Singh, considered the architect of the country’s reforms programme.

As a result, the country has logged a phenomenal 33.7 percent average annual growth in its knowledge-intensive software and services industry over the last few years, taking its revenues from a mere $12.4 billion in 2002-03 to $52 billion in 2007-08.

Similarly, in knowledge process outsourcing, India is growing at around 25-27 percent and gross revenues are expected to shoot up to over $10 billion by 2012 from the current $4 billion, according to the Associated Chambers of Commerce and Industry of India (Assocham), a leading industry lobby.

Even in telecommunications - where the country’s tele-density was abysmally low even five years ago - some 8-10 million subscribers are being added to the network every month. India has also overtaken the United States, with as many as 286 million subscribers, and ranks just below China.

“If the last few years of telecom were exciting in India, it will be even more exciting in the coming years,” said Nripendra Misra, chairperson of the industry’s watchdog, Telecom Regulatory Authority of India.

“In terms of numbers, we would easily achieve the target of 500 million by 2010.”

In other knowledge-intensive industries, especially pharmaceuticals and biotech, Indian companies such as Ranbaxy Laboratories, Dr. Reddy’s Laboratories and Biocon are steadily climbing the global corporate pecking order to emerge among the top 5-10 global players.

To leverage the potential, the prime minister also announced three years ago the formation of the National Knowledge Commission (NKC) under noted technocrat Sam Pitroda - the man responsible for ushering in the telecom revolution in India in the eighties.

The broad goal of the commission was to recommend ways to convert India’s demographic advantage of having the world’s largest set of young people - estimated at over 300 million - into knowledge capital by following a knowledge-oriented development path.

“The time has come to create a second wave of institution-building and of excellence in the field of education, research and capability building so that we are better prepared for the 21st century,” Manmohan Singh said.

The commission’s recommendations have resulted in the government attaching top priority to education, reflected by a five-fold increase in budgetary allocation. At Rs.2,700 billion ($67.5 billion), the allocation for education constitutes 20 percent of India’s planned allocation for the next five years.

“Indian policy makers are already starting to implement some of the key actions that are necessary to bolster India’s effective transformation to the knowledge economy,” the World Bank said, looking at the policy decisions taken in recent years.

The fund bank also said that the notion of a knowledge economy was neither new nor foreign to India. The country’s past achievements in science, philosophy, mathematics, and astronomy reinforce the notion that the country has for millennia been a leading “knowledge society”.

In fact, India was the world’s largest economy in the first millennium and also at the beginning of the industrial revolution around 1,700 A.D. But subsequently, its share in the world economy headed south, being a latecomer to the industrial revolution.

Now, three centuries down the line, India is again poised to become the second largest, if not the largest, economy in the world as it increasingly assumes leadership of the current knowledge revolution.

As Manmohan Singh told industry leaders recently: “I am confident that the Indian economy will continue to grow at 8-9 percent rates of growth and India will emerge as one of the growth engines for the world economy as a whole.”

China to top Asian consumer markets in 2009

China to top Asian consumer markets in 2009 2008-09-08 18:30:43 Print

XIAMEN, Sept. 8 (Xinhua) -- By 2009 China will become the largest consumer market in Asia said Chinese Minister of Commerce Chen Deming.

Speaking at the 12th Xiamen International Trade and Investment Fair on Monday in the east Fujian Province, Chen predicted entertainment, housing and tourism will expand their shares in the domestic market.

"As one of the world's fastest growing consumer markets, China is a world leader in mobile phone sales, domestic tourism, and broadband network penetration," said Chen.

He also noted China is the second largest seller and buyer of gold and automobiles in the world. The country ranks third in consumption of luxury items and health care supplies.

The average per capita GDP reached 2,456 U.S. dollars last year, said Chen. He added that consumption had bigger shares than investment for the first time in the nation's economic growth.

For the past five years, China's annual consumption growth rate had been 13.1 percent. If the growth rate continues at just 10 percent, China's consumer market scale will exceed 30 trillion yuan (4.38 trillion U.S. dollars) by 2020.

Chen predicted China will top the global luxury market by 2014,with a market share of 23 percent. He also said by 2015, the country could become the world's fourth largest provider of outbound tourists.

Currently, China is the second largest consumer market in Asia next to Japan. That is predicted to change by 2015. According to areport by the Boston Consulting Group, done in 2007, China is likely to become the world's second largest consumer market next only to the Unites States.


Tanzania: President Bush Meets with President Kikwete

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Washington, DC

PRESIDENT BUSH: It is such an honor to welcome a man I've come to admire a lot to the Oval Office, President Kikwete of Tanzania. He comes representing a great country. He also comes representing the African Union. And therefore, we've had a wide-ranging discussion about our bilateral relations, as well as the President has kindly given me a briefing on how he sees the different situations and opportunities on the continent of Africa.

Laura and I will never forget our trip to your country. First of all, it's a beautiful country. The people were so gracious and so friendly. And I came back to America telling our fellow citizens how proud they would have been to have seen the outpouring of affection for the American people, as a result of the American people's generosity in such matters as education, or HIV/AIDS, or the President's Malaria Initiative.

I am confident in saying to the American people that your money is being spent wisely and compassionately in Tanzania. And a lot of it has to do with the leadership of the President. He stood up and said, we've got a problem and I'm going to take the lead. And his government has been responsive to the needs of the people.

And, Mr. President, I can't thank you enough on behalf of the American people for your compassion and your leadership.

I also am looking forward to continuing our discussions on issues like Zimbabwe or Darfur. These are issues that the President is most familiar with. It's the President -- issues in which he has got good judgment about how to proceed on these matters.

And so, Mr. President, it is with great pleasure that I welcome you here to the Oval Office.

PRESIDENT KIKWETE: Thank you. Well, thank you, President. First I thank you for the invitation. It's an honor for me; it's an honor for Tanzania; it's an honor for Africa. Well, I came here to say thank you on behalf of the people of Africa, on behalf of the people of Tanzania. You've done so much for Africa, so much for Tanzania. When you compare, no U.S. President has done so much for Africa and for Tanzania as you have done.

Our goal has been extended; it extends the horizons of the possibilities of economic growth in Africa. PEPFAR is helping us tackle HIV/AIDS scourge. Many lives -- many, many children now who were -- who would have been orphaned are no longer orphaned because of that. PMI has helped us so much in the fight against malaria. Many innocent lives of children -- women and children -- are being saved. And Tanzania is one of those examples of the great successes of PMI.

Malaria in Zanzibar has almost been -- is being eliminated now. In the past there used to be 50 percent cases being reported in hospital; now it's only 1 percent that's been reported in hospital, thanks to PMI.

There are a number of -- of course, our biggest challenge now in Zanzibar is how to sustain that success, because only 20 miles on the mainland, in Dar es Salaam, malaria is still there. So if people go to Zanzibar with malaria, then the problem is -- so our biggest challenge is how to sustain it. And we are working together with the PMI and CDC on how to respond to this kind of situations.

Of course, with the MCA again, the support you've given us to infrastructure development in the country, it's again -- it helps us build the capacity, to tackle poverty and economic development in the country.

So all that I can say really -- I came here to say thank you so much for the support. But of course, you saw it yourself when you came home, how the people came in huge numbers --


PRESIDENT KIKWETE: -- huge numbers. I was even amazed when they poured in the streets. There the issue was really to express their appreciation to the people of the United States for, again, the support you have been extending to our country.

Of course, we discussed the issues on the continent. We again, we thank you for your leadership. We'll continue to work together. Zimbabwe is a common problem. Darfur is a common problem. We are the front line; but of course, those of us who are on the front line always look toward -- look to the rear -- (laughter) -- to what you do to support us. And there has been such extraordinary support for us in the continent.

We continue to work together. I thank you, President.

PRESIDENT BUSH: Thank you, sir.

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Thank you all.

Sunday, 7 September 2008

Africa: ACP Countries Consolidate Stand

Africa: ACP Countries Consolidate Stand

Cameroon Tribune (Yaoundé)

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Lukong Pius Nyuylime

Delegates of the African, Caribbean and Pacific Countries have declared their intension to send a hand of fellowship to their counterparts of Central and Latin America so they sit on one negotiating table in order to reach a compromise that can be endorsed by the competent authorities of the World Trade Organisation and put an end to the long drawn so called banana war.

The delegates who include Eric Delucci, president of the Guadeloupe and Martinique banana producers and Vice president of the European Banana Producer Association, Alfred Almond, Member of Parliament for Martinique and Mayor of Schoelcher, Emmanuel Jean-Michel, vice president of the Guadeloupe producer group and delegates from three African countries, Cameroon, Ivory Coast and Ghana among others, are meeting in Yaounde to rehearse their stand ahead of the next negotiation. In effect, after failing to strike a deal at the last WTO negotiations in Geneva, ACP countries want to reiterate their position on the decision of the European Union, the major consumers of Latin American banana to gradually reduce the EU's tariff of 176 Euros per tonne to 116 Euros by 2015. Cameroon's Minister of Trade, Luc Magloire Mbarga Atangana, who doubles as the spoke person for the African, Caribbean and Pacific countries on banana issues, staged a walk out during the meeting to express the disgruntlement and disagreement of the ACP countries on the proposal.

In his speech at the opening ceremony yesterday, Mbarga Atangana wondered why ACP countries could be part of the multilateral Trade process when they cannot be able to produce and sell or to simply be buyers of what is produced by stronger countries. "This preoccupation must be integrated and understood by the WTO especially as concerns the Doha negotiation cycle reputed to be e development cycle", he said.

The banana problem, though being an economic issue, has become a political problem, he said, stating inter alia that the signing of the treaty of Rome to create the European Union was delayed because of geo-strategic considerations linked to banana. The pertinence of the banana war is such that it has held the WTO talks hostage for over a decade. "If there is no accord with banana producers on imports in Europe, then there could be no wider deal on global trade liberalisation", European Trade Commissioner, Peter Mandelson warned. Mr Mandelson said a deal worked out by WTO head Pascal Lamy had to be accepted by both Latin American and African, Caribbean and Pacific producers. But from every indication, no such concession has been reached.

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For two days running, the delegates will have working sessions with Cameroonian officials and emerge with a Yaounde declaration on the issue.

Nigeria, Venezuela to Discuss Global Energy Crisis

Nigeria: Nigeria, Venezuela to Discuss Global Energy Crisis

This Day (Lagos)

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Juliana Taiwo

President Umaru Musa Yar'Adua yesterday in Abuja disclosed that he would soon meet his Venezuelan counterpart, President Hugo Chavez, to discuss the current energy situation as well as lay a framework for enhanced bilateral relations.

The planned meeting is coming on the heels of soaring oil prices, which hit another record high of $142 per barrel during trading yesterday.

Yar'Adua disclosed his planned meeting with Chavez during a farewell meeting with the out-going Venezuelan Ambassador to Nigeria, Dr. Boris Henrique Martinez.

He said such a meeting had become imperative because "fingers are being pointed at both countries as a result of the energy situation in the world."

The president, while acknowledging that both countries have a common responsibility to improve the welfare of their people, stressed the need for "much greater cooperation and collaboration especially in the petroleum sector."

He wished the outgoing Ambassador well in his future endeavours and urged him to continue to promote the interests of Nigeria.

Dr. Martinez thanked the government and people of Nigeria for making his two-year stay in the country a happy one.

No indication was given of whether steps had already been taken to set up a meeting between the two leaders.

Crude oil, which rose to a record of over $142 a barrel in New York, Friday, sent shivers down the spines of many across the globe.

Crude oil for August delivery rose as much as $2.62 a barrel, or 1.9 percent, to $142.26 in electronic trading on the New York Mercantile Exchange. It was trading at $141.95 at 12:31 p.m. London time yesterday.

The President of the Organisation of Petroleum Exporting Countries (OPEC), Chakib Khelil said prices might reach between $150 and $170 within months.

Khelil said he believes oil prices could rise to between $150 and $170 a barrel this summer before declining later in the year. However, he does not think prices will reach $200 a barrel.

Concerned about rising oil prices and the impact on the global economy, Saudi Arabia, last weekend, held a one-day summit of oil producers and consumers.

However, the summit failed to reach a concrete agreement on how to stem the rise in oil prices, with several consumers leaving the summit disappointed.

In response to record prices, the U.S. House of Representatives recently passed a bill allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices.

Venezuela, an anti-U.S. price hawk in OPEC, has consistently opposed calls to raise oil production to stem soaring prices despite heavy pressure from consumer nations.

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Nigeria pumps around two million barrels per day of crude and has said it aims to double output by 2010, but with militant attacks in the Niger Delta and funding shortfalls hampering its industry, most analysts agree that target is rather ambitious.