AIG sells off its Taiwan business

Insurer AIG has said it is selling its Taiwanese life insurance
business to an investor group for $2. 15 bn (£1.4 bn). AIG will
transfer its 97.5 % stake in Nan Shan, Taiwan's third-biggest life
insurer, to a consortium led by Hong Kong's Primus Financial. AIG is
selling assets in an effort to repay US government aid. It was bailed
out in 2008 at a cost of $182.5 bn. It made a $1.82 bn profit in the
three months to June, after a loss of $5.4 bn in the same period of
2008. It was the first quarterly profit since 2007 for AIG, which is
now 80 % state-owned. Nan Shan has four million customers in Taiwan,
giving it a market share of 10 %. Its current management team will
remain in place after the deal and the firm's existing brand will be
retained. As well as Primus, the consortium also includes Hong Kong
investment firm China Strategic Holdings.

Russia and China sign trade deals

China and Russia have signed trade agreements worth $3.5 bn (£2.2
bn). About 40 contracts were signed by Russian and Chinese
businessmen and officials, Russian deputy prime minister Alexander
Zhukov said. The head of Russia's Gazprom, Alexei Miller, said a
preliminary deal had also been struck on supplying 70 bn cubic metres
a year of gas to China. The agreements came during the second day of
a visit to Beijing by Russian Prime Minister Vladimir Putin. Russia is
keen to bolster its economy, which President Dmitry Medvedev has said
will decline by 7.5 % in 2009. ANALYSIS Rupert Wingfield-Hayes, BBC
News, Moscow Beijing and Moscow call it a "strategic partnership",
but in reality it is a lot more complex and fraught with tension. The
trade relationship could be described as "you dig it up, we buy it".
Russia is rich in resources: oil, gas, metals and timber. China has a
huge appetite. But Russian nervousness about China can be seen in
their energy deals. Russia needs to invest billions to build new
pipelines to send its oil and gas to China. Beijing has the money,
but Moscow will not allow Chinese companies to build and own these
pipelines. Instead, China is having to lend Russia the money. It is
all about history and demographics. Big chunks of the Russian Far
East were once part of the Chinese empire and there is deep concern
in Russia that a rich, powerful and over-populated China will one
day want it back. It is keen to sell more oil and gas to China - the
world's second-biggest energy user. Mr Zhukov told reporters that the
deals included two $500 m loans from Chinese banks to Russian
financial institutions. One was from the China Development Bank to its
Russian counterpart Vnesheconombank, while the other was from the
Agricultural Bank of China to Russia's state-run VTB bank. He said
other deals included investments by Chinese firms in Russian
construction facilities, but gave no details. Currency ambition Trade
between Russia and China has risen from less than $10 bn to more than
$50 bn annually over the past six years. The heart of the
relationship is Beijing's thirst for Russian energy - oil and gas
make up more than half of Russian exports to China. Earlier this
year, Moscow signed a $25 bn agreement to help fund a pipeline to
supply oil from Siberia to China. In exchange, China was guaranteed
a 20- year supply of crude oil. However, Moscow is also keen to boost
exports of machinery, especially aviation equipment and nuclear
power plants - though analysts say that China's appetite for Russian
goods other than energy and raw materials is limited. The countries
are seeking to expand the amount of business they do in their own
currencies, rather than the US dollar. However, currently only about
1 % of their dealings involve roubles or yuan.

Britain announces massive assets sale

British Prime Minister Gordon Brown announced on Monday a massive
16-billion-pound sale of state assets including the Channel Tunnel
rail link, to cut soaring debt caused by economic crisis. Brown,
facing a potential election wipeout next year at the hands of the
main opposition Conservatives, wants to halve Britain's deficit in
four years after it ballooned amid a deep recession. The planned
disposals, which also include the 33-per cent stake in European
uranium consortium URENCO, the Student Loan Company and the Tote
bookmakers, would raise the equivalent of 25.4 billion dollars or
17.2 billion euros. 'We plan a sale of assets to deal with our
debt issues and ... 16 billion (pounds) of assets will be sold
within the next two years,' Brown told economists gathered in central
London on Monday. 'We have listed a number of assets that we are
determined over the next period of time to put into the market place.
'That includes the student loan book, the Channel Tunnel rail
link, that includes URENCO— subject to security issues being
addressed—and that also includes the Tote, other facilities, and ( a)
property portfolio.' Britain's public finances have increased under
the weight of an expensive bailout of the troubled banking sector.
The public deficit is widely forecast to strike 175 billion pounds
this year as the nation's finances also buckle amid a fierce
recession, which has slashed taxation revenues. The Conservatives,
who are well ahead in the opinion polls with a general election due
by June, set out their plans last week for tackling Britain' s debt
problem. Brown is bidding to reclaim the initiative for his
governing Labour Party. His speech included a series of attacks on
Conservative policies, a taste of the electioneering flavour which
British politics is likely to adopt in the coming months. 'Our
deficit reduction plan is deepening, it is far-ranging, it takes
account of the issues,' Brown added on Monday. 'The difference
between it, and those of other parties... is that deficit reduction
can happen in a way that does not lead to a deterioration in
front-line public services, and make sure that we have the investment
that is necessary for the long-term growth of the economy,' he said.
Conservative leader David Cameron, reacting to Brown's
announcement, said that selling government assets was a good idea.
'Obviously we do need to do this but we must make sure, as every
family knows, if you sell something it can help in the short term but
it does not help you live within your spending in the long-term.
'We have still got to get to grips with public spending, get to grips
with the deficit. We must make sure we get good value for money.'
In a twin-pronged attack on Britain's recession, the Bank of England
has slashed British interest rates to a record low of 0.5 per cent
and launched a radical quantitative easing (QE) programme to boost
lending. The British central bank will keep its key lending rate
at 0.50 per cent until at least 2011 as the economy recovers, an
independent economics consultancy forecast on Monday.

Germany keen on shipbuilding

The German government is keen to provide support in shipbuilding and
river dredging in the country. German Ambassador in Dhaka Holger
Michale expressed his government's willingness when he called on
Shipping Minister Shahjahan Khan at his office yesterday, said an
official handout. The minister sought technical cooperation from
Germany in various sectors including river dredging for maintaining
navigability of the country's rivers.

Six Uighurs to die for Xinjiang riots

China sentenced six people to death yesterday over deadly July riots
in its restive Xinjiang region, state media reported, delivering on a
vow of harsh retribution over the ethnic unrest. The six were
convicted of murder and other crimes by a court in the regional
capital Urumqi in the first trials over the riots that killed nearly
200 people and left the city riven by ethnic tension. China Central
Television (CCTV) said one other defendant was sentenced to life in
prison over the unrest, in which members of the Uighur minority went
on a rampage in attacks directed at members of China's dominant Han
ethnic group. Xinhua news agency said the seven, all men, were
convicted in three separate cases. It identified them by names that
appeared to be Uighur. Television footage showed the defendants with
their heads shaved and wearing orange and blue vests lined up or
seated before the court tribunals with most of the convicted
appearing to be in their twenties and thirties. Authorities had
tightened up security ahead of the trials, state media reported,
apparently fearing the verdicts could touch off further violence.
China National Radio said up to 14 ,000 security forces were
deployed in the city on Sunday to begin 24- hour patrols. The exiled
World Uighur Congress condemned the sentences, saying that the
defendants were not given access to lawyers of their own choosing.
"The verdicts by China against the Uighurs were not reached in
accordance with normal legal procedures but were made in accordance
with political demands," congress spokesman Dilxat Raxit told AFP.
"Concerning the death sentences, we believe this will only make the
overall situation worse." Footage broadcast by CCTV showed deserted
streets in front of the Urumqi court where the trials were held, with
police lining sidewalks carrying riot shields and truncheons. Locals
contacted by AFP by phone shortly after the verdicts were announced
said the city remained calm amid the heavy security. Officials at the
Urumqi court refused to immediately confirm the sentences when
contacted by AFP. The riots were the worst ethnic violence to hit
China in decades, leaving 197 people dead, most of them Han, and
more than 1 ,600 injured, according to the government. Detailing the
cases, Xinhua said a man named Abdukerim Abduwayit was convicted of
beating five innocent people to death and setting a building on
fire. Four others sentenced were convicted of jointly beating four
people to death, it said, while another defendant killed five people
when he set a grain shop on fire. The man who received life in
prison, Tayirejan Abulimit, was convicted of "attacking, smashing,
looting and burning," a term Chinese authorities use for rioting.
"Tayirejan Abulimit was given life imprisonment, a lesser punishment
as he admitted charges of murder and robbery and helped the police
capture another suspect," Xinhua said. Police have detained at least
718 people suspected of crimes related to the unrest, earlier
reports said.» Charges against 21 defendants were publicised by
Xinhua late last month, with three other cases pending involving 14
other suspects who are facing charges of homicide, arson, robbery
and property damage related to the riots. China's roughly eight
million Uighurs have long complained of religious, political and
cultural oppression by Chinese authorities. Uighurs say the unrest
was triggered when police cracked down on peaceful protests by
Uighurs over a late June brawl at a factory in southern China that
state media said left two Uighurs dead. One ethnic Han man was
sentenced to death and a second handed a life prison term over that
brawl in verdicts announced on Saturday in southern China.
Authorities, however, have blamed the Xinjiang unrest on "ethnic
separatists," without providing any evidence, and have vowed to come
down hard on those found guilty, including use of the death penalty.
Urumqi has been under extremely heavy security since the riots,
tightened amid a wave of needle attacks beginning in late August,
which Han have blamed on Uighurs.

Move to improve RMG quality

Bangladesh Garments Manufacturers and Exporters Association (BGMEA)
yesterday launched a programme, aiming to improve the quality of
apparel items in its member factories. The programme, quality
improvement programme (QIP), was launched in collaboration with GTZ
(German Technical Cooperation). QIP will help 20 factories at two
stages to improve production quality. "Although the apparel products
of Bangladesh are well-known for maintaining high quality, there is
ample scope to reduce wastage by improving the quality," BGMEA
President Abdus Salam Murshedy told the launching ceremony. He hoped
that QIP will help attain better productivity and higher quality
reducing overhead and operating costs, and brining dynamism into the
operation process. The BGMEA chief said they are now focusing on
providing assistance to their member factories both on productivity
and quality, as the improvement of this level could be a key catalyst
to move ahead in the competitive market. Programme Coordinator of GTZ
Deitrich Stotz hoped that improved Bangladeshi products would able to
grab more shares in the global market.

$76 m ADB loans to help grow SMEs

The Asian Development Bank (ADB) will provide Bangladesh $76 million
soft loans to help create employment by expanding non-urban small and
medium enterprises (SMEs). To this end, an agreement was signed
yesterday between the government of Bangladesh and the lending
agency in Dhaka, according to a press release. M Musharraf Hossain
Bhuiyan, secretary of Economic Relations Division in the finance
ministry, and Nurul Huda, officer-in-charge of ADB's Bangladesh
Resident Mission, sealed the deal on behalf of their respective
sides. "The project will boost the number and size of commercially
viable enterprises, and thus increase access to credit and help
expand SMEs," said Huda. The ministry is the executing agency and
Bangladesh Bank will be the implementing agency for the project,
completion of which is due by September 2012. The project will also
support an increase in female-led SMEs, which are set to receive a
minimum 15 percent of the project's credit facility. A linked
technical assistance grant of $5 ,00 ,000 , funded by the
Australia-ADB South Asia Development Partnership Facility, will be
used to improve the financial skills and capacities of women
entrepreneurs and participating financial institutions (PFIs), the ADB
said. Bangladesh government will contribute $19 million, PFIs $19
million, and SMEs about $12.7 million for the project cost of $ 126.7
million. The project is expected to generate 1.46 million
employments in the SME sector and will benefit more than 66 ,000
SMEs across the country, primarily in rural and non-urban areas
during 2009-2012.

Businessmen want ban on aromatic rice exports to go

Rice exporters yesterday were unable to push through their proposal
to export at least 10 tonnes of aromatic rice, as the government
wants to prioritise domestic food security, said a commerce ministry
official. Commerce Minister Faruk Khan held a meeting with rice
exporters at his secretariat to discuss the proposal to allow
aromatic rice exports out of Bangladesh. The minister however was
unable to brief newsmen on the matter as he was on his way to
parliament. A ministry official who was present at the meeting told
The Daily Star that the minister did not accept the proposal, in
efforts to keep the prices of the staple food at tolerable levels.
"The government is prioritising domestic food security as it was one
of its electoral pledges to people," he quoted the minister. "The
commerce minister ruled out the possibility of allowing aromatic rice
exports," said Shah Alam Babu, president of Bangladesh Rice
Exporters Association (BREA), after the meeting. Alam said his
association has been lobbying with the government for several months
now to obtain a permit to export aromatic rice, as its demand is
high, especially among non-resident Bangladeshis (NRBs). He said rice
was last exported in May 2008 , when it was still permitted. However,
the then caretaker government imposed a ban on the export of all
types of rice as prices crept up due to supply shortages. According
to Alam, there is demand for 2 ,500 tonnes of aromatic rice a year by
NBRs and before the ban was imposed, at least 6 tonnes of aromatic
rice were exported a year. This time, exporters proposed a permit to
export of at least 10 tonnes of aromatic rice. He said farmers
produce 3 ,00 ,000 tonnes of aromatic rice a year, of which, 80 ,000
tonnes remain a surplus, as demand for such high quality rice is low
on local markets. "We were developing a Bangladeshi brand by
exporting rice as the demand for Chinigura and Kali Zeera is high
among the NRBs. But the ban on exports is hampering brand
development," Alam said.

Bangladesh to become carmaker

Bangladesh is set to become an automaker by the next two years, as a
South Korean investment company yesterday announced a plan to invest
$2 billion for setting up a Korean brand car manufacturing plant in
the country. The proposed car unit is expected to go into production
in 2012 , targeting to make 50 ,000 Korean Tagaz brand cars a year,
and sell those in both local and international markets. The plant
will also manufacture cars to be branded locally. If the plant is set
up in time, it will be the first- ever car making venture in
Bangladesh. Industries Minister Dilip Barua formally unveiled the $2
billion investment plan, and termed it as a good sign for Bangladesh
amid a sluggish foreign investment flow. Cimillae Development Co Ltd,
the local agent of Korean investment company CCGI, will coordinate
the investment implementation. Abdul Mannan, managing director of
Cimillae Development, said local customers will get a Tagaz brand
new car at only Tk 7 lakh. The company has already acquired land at
Bhairab in Narsingdi for the plant. Mannan said the plant will
require two years to be set up. As many as 15 ,000 jobs will be
created to run the car manufacturing plant. CCGI Chairman Lee Young
Choung said his company has already decided to invest more in
Bangladesh besides the car manufacturing plant. He said CCGI has
plans to invest in 30 sectors in future. Presently Japanese
reconditioned cars dominate the Bangladesh market. Around 20 ,000
used cars are imported each year, while the number is 2 , 000 for
brand new cars. Some brand new carmakers like Ford have already
initiated move to enhance their presence in Bangladesh. Japanese
Toyota still leads the market in both used and brand new car
segments.

Investment yet to pick up

The government is yet to bring both public and private investments
out of their sluggish mood although an ambitious budget was announced
for the current fiscal year. Only four percent of the big Annual
Development Programme (ADP) was implemented in the first two months
of the current fiscal year, according to latest information. At the
same time import of capital machinery and industrial raw materials
showed negative trend, meaning private investment is yet to pick up.
Research Director at Bangladesh Institute of Development Studies Zaid
Bakht said the GDP growth target of 5.5 percent will not be
achieved if the public and private investment does not increase.
Meanwhile, the World Bank Economic update also said Bangladesh
continues to face several risks that affect its short-term prospects
for growth and poverty reduction. The risks include slower ADP
implementation, power shortage and global recession. According to a
report of the planning ministry's Implementation, Monitoring &
Evaluation Division (IMED), Tk 1 ,347 crore out of the total ADP
outlay of Tk 30 ,500 crore was implemented in the July-August period
of the current fiscal year. In FY 2007-08 and FY 2008-09 the
implementation was Tk 874 crore or 3 percent and Tk 1 ,086 crore or
4 percent respectively in the first two months. ADP implementation
witnessed its slowest pace during the caretaker government' regime.
The implementation in the current year was comparatively better, but
if the rate is compared with that in FY 2006-07 , it is frustrating.
In the first two months of FY 2006-07 the implementation was Tk 1
,553 crore or 6 percent. The ADP size of Tk 30 ,500 crore in the
current year is about 56 percent higher than last year's real
expenditure. An IMED official said the implementation rate during the
first two months does not match the ADP size. According to Bangladesh
Bank's Letter of Credit ( L/C) settlement statistics, capital
machinery import dropped by 22.36 percent in the July- August period
of the current year over the same period a year ago. Import of
industrial raw materials also fell by 20. 81 percent, while the rate
of L/C opening for industrial raw materials went down by 12.56
percent. Call money rate was 1.76 percent on October 6 , which was
9.13 percent on the same day last fiscal year. This means there is
no credit demand in banks now. Import and export also showed negative
trend in July this year when import dropped 16.63 percent and export
6.80 percent. Zaid Bakht said: "The government took the strategy of
increasing public investment to make domestic economy vibrant. But the
strategy did not work." As the public investment did not increase,
the private investment also did not roll in, he said. Another cause
for sluggish private investment is shortage of power and gas, he
added. The WB has recently prepared an economic update on Bangladesh,
which is yet to be released. The report said power shortages are the
most serious and immediate of the infrastructure constraints with
damaging impact on productivity and investment. The WB report said
the implementation of the ADP, which is 56 percent more than the
real expenditure of the previous fiscal year's ADP, is a big
challenge. It said: "Experience has shown that the ADP utilisation
has been slow and never exceeded Tk 200 billion in the past."
However Finance Minister AMA Muhith on Sunday said the finance
ministry and the planning ministry have been continuously putting
pressure on other ministries to expedite ADP implementation. However,
he admitted that public investment might not increase much. So the
government would lay emphasis on increasing foreign and domestic
investment in the private sector to improve investment.

Oracle plays up promise of Sun takeover

Oracle chief executive Larry Ellison on Sunday opened fire on US
technology veteran IBM and expressed optimism about the pending 7.4-
billion-dollar-deal to buy Sun Microsystems. While kicking off an
Oracle Open World conference in downtown San Francisco, Ellison
vowed to merge his company's business software prowess with Sun's
hardware innovations in a synergy powerful enough to take on IBM.
"We're in it to win it," Ellison said as he joined Sun founder and
chief executive Scott McNealy on stage to open a weeklong gathering
of fans of Oracle's software for businesses.

Philips triples third quarter net profit

Dutch electronics giant Philips said Monday it had tripled its net
profit to 176 million euros in the third quarter of 2009 , compared
to the same period last year. The result was better than anticipated
by analysts questioned by Dow Jones Newswires, who had predicted a
net loss of 45 million euros. Sales stood at 5.6 billion euros in
the third quarter, down 11 percent from 6.3 billion euros in the
same period last year, but an improvement from the 19 percent
decline in the second quarter, said a company statement. "Our Q3
results are a reflection of our strong fundamentals and the proactive
manner in which we have been managing our costs," Philips chief
executive officer Gerard Kleisterlee said in a statement. Most of the
company's business divisions saw improvements in sales and earnings
compared to the previous quarter, he said. Philips reported a
six-fold increase in earnings before interest, tax and amortisation
(Ebita) of 344 million euros in the third quarter, from which was
subtracted restructuring and acquisition-related charges of 125
million euros and an 87 million euro provision.

Kuwait restores support for Gulf currency in January

Kuwait strongly backs the launch of the Gulf monetary union and
single currency on time in January 2010 , the undersecretary of the
finance ministry said on Monday, a day after the ministry demanded a
delay. "Kuwait strongly supports the Gulf monetary union and the
launch of single currency as scheduled next January," Khalifa Hamada
said in a statement cited by the official KUNA news agency. "Kuwait
is keen to cooperate with its partners in the Gulf Cooperation
Council (GCC) at all levels to speed up the completion of all issues
related to launching the single currency on its target date in
January 2010. " On Sunday, a statement by the finance ministry
carried by KUNA called for a delay in the 2010 launch date to allow
committees and concerned parties to complete unfinished technical
issues. Kuwait was one of four Gulf states to sign a pact in June to
create a joint monetary union council and launch the monetary union
and single currency with Saudi Arabia, Qatar and Bahrain the other
signatories.

Indian industrial output surges

India's industrial output surged by a better-than- expected 10.4
percent in August, official data showed Monday, which analysts say
could raise pressure on the central bank to hike interest rates. The
strong year-on-year figures came on the back of double-digit growth
in the manufacturing, mining and electricity sectors. Analysts were
expecting a rise in industrial output of close to 10 percent.
Economists said the robust figures could press the central bank to up
rates to control growing inflationary pressures, although most
predict no move before January. India's industrial performance is
expected to help offset the impact on overall economic growth of
monsoon rains, which have been the worst in nearly four decades and
hurt agricultural output, analysts say. The data were the latest in a
series of encouraging figures pointing to recovery in Asia's
third-largest economy. Manufacturing production grew by 10.2 percent
in August, electricity by 10.6 percent and mining by 12.9 percent.
India's economic growth has fallen from the annual nine percent-plus
levels the country logged for several years before the start of the
global financial crisis.

Oil up

Oil prices rose in Asian trade Monday, boosted by reports forecasting
a hike in crude demand, seen as an indicator of economic recovery,
analysts said. New York's main contract, light sweet crude for
delivery in November, gained 50 cents to 72.27 dollars a barrel.
Brent North Sea crude for November delivery climbed 53 cents to
70.53 dollars.

Asian recovery hopes brighten

Singapore's economy grew 0.8 percent in the three months to
September from a year ago, official estimates showed Monday, boosting
recovery hopes in other Asian economies hit by the global slowdown.
It was the trade-dependent economy's first year-on-year expansion in
five quarters and was based on July and August numbers. The estimate
is expected to be revised when the full September numbers are
available next month. "It's a good sign for the rest of Asia," said
Dariusz Kowalczyk, chief investment strategist with financial
services firm SJS Markets Hong Kong. " The recovery in the global
economy has had a meaningful impact on regional growth." Singapore
was the first Asian economy to go into recession as a result of the
financial crisis that began in the US housing sector -- but also
among the earliest beneficiaries of improved demand in industrial
countries this year. "A clear but modest recovery is underway
globally, at least for the next three or four quarters," the ministry
of trade and industry said in a statement. While gross domestic
product (GDP) will fall in 2009 , the government amended its
full-year forecast to a contraction of 2.0 to 2.5 percent, well
below the previous estimate of negative 4.0 to 6.0 percent growth.
"One-off factors such as restocking activities and fiscal stimulus
measures will continue to support growth in the near term," the
ministry said. On a seasonally adjusted quarterly basis, GDP surged
14.9 percent following a 22 percent expansion in the second quarter
to June, the ministry said. It was the second successive
quarter-on-quarter growth period. Growth in the third quarter was
driven by expansion in the biomedical and electronics manufacturing
industries, which are the key pillars of Singapore's industrial
sector. Manufacturing, which accounts for almost a quarter of
Singapore's GDP, grew 8.3 percent in third quarter from a year ago
and expanded 34.9 percent on a quarterly basis. The services industry
shrank 2.4 percent on the year but expanded 9.5 percent on a
quarterly basis. The construction sector surged 12.4 percent
year-on-year but fell 0.6 percent from the previous three months,
the ministry said. "Growth was driven by the continued expansion of
biomedical and electronics manufacturing output, and improvements in
the trade-related and tourism sectors of the economy on the back of
a gradual stabilisation in global economic conditions," it said. The
Monetary Authority of Singapore (MAS), the country's central bank,
said in a separate statement Monday it was maintaining the policy of
"zero percent appreciation" for the Singapore dollar in light of the
modest recovery. The MAS carries out its monetary policy through the
Singapore dollar, which is weighted against a basket of currencies of
major trading partners within an undisclosed trading band known as
the nominal effective exchange rate (NEER). "MAS will therefore
maintain the current policy stance of a zero percent appreciation of
the NEER policy path," it said. Song Seng Wun, a regional economist
with CIMB- GK Research, said Singapore was "firmly out of recession"
with GDP expanding in the third quarter. He has narrowed his 2009
growth forecast for the city-state to a contraction of 2.0 percent
from minus 3.0 percent previously. The third-quarter data boosted
local share prices, with the benchmark Straits Times Index closing
up 1.05 percent at to 2 , 680.47. Singapore's economy sank into
recession in the second quarter of 2008 as the global financial
crisis unfolded, hurting demand for exports to its major markets
including the United States, Japan and the European Union. Its worst
previous recession since gaining independence in 1965 was in 2001
when GDP contracted 2.4 percent.

Nobel Prize Economic governance in spotlight

The 2009 Nobel season wrapped up yesterday with the announcement of
the winners of the Nobel Economics Prize. The prize attracted special
attention in the wake of the global economic crisis. Elinor Ostrom has
become the first woman to win the Nobel prize for economics since it
began in 1968. Ostrom won the prize with fellow American Oliver
Williamson for their separate work in economic governance. The
Economics Prize is the only one of the six Nobel prizes not created
in Swedish industrialist Alfred Nobel's 1896 will -- it was created
much later to celebrate the 1968 tricentary of the Swedish central
bank and was first awarded in 1969. Since then, men have swept the
Economics Prize, with no woman clinching the 10- million-kronor (
1.42- million-dollar, 980 ,000- euro) honour which can be shared by
up to three winners. Americans also dominate the list of economics
laureates. Last year, the coveted award went to US economist, New
York Times columnist and fierce George W Bush critic Paul Krugman for
a trade analysis theory that determines the effects of free trade
and globalisation, as well as the driving forces behind worldwide
urbanisation. Earlier, US President Barack Obama won the Nobel Peace
Prize -- though this aroused some controversy. BBC economics editor
Stephanie Flanders said the judges had rewarded work in areas of
economics whose practitioners' "hands were clean" of involvement in
the global financial crisis. Ostrom, who has devoted her career to
studying the interaction of people and natural resources, told the
Royal Swedish Academy of Sciences by telephone that she was surprised
by the Nobel. "There are many, many people who have struggled
mightily and to be chosen for this prize is a great honour," she said.
"I'm still a little bit in shock." The academy cited Ostrom "for her
analysis of economic governance," saying her work had demonstrated
how common property can be successfully managed by groups using it.
Williamson, the academy said, developed a theory where business firms
can serve as structures to resolve conflicts. "Over the last three
decades, these seminal contributions have advanced economic
governance research from the fringe to the forefront of scientific
attention," the academy said. It said the American winners' research
shows that economic analysis can shed light on most forms of social
organisation. "Elinor Ostrom has challenged the conventional wisdom
that common property is poorly managed and should be either regulated
by central authorities or privatised," the academy said. "Based on
numerous studies of user-managed fish stocks, pastures, woods, lakes,
and groundwater basins, Ostrom concludes that the outcomes are, more
often than not, better than predicted by standard theories." One
notable publication Ostrom wrote in 1990 examined both successful and
unsuccessful ways of governing natural resources - forests,
fisheries, oil fields, grazing lands and irrigation system - that are
used by individuals. Williamson was cited for arguing that markets
and hierarchical organizations, such as firms, represent alternative
governance structures that differ in their approaches to resolving
conflicts of interest. Issues of governance, or the rules by which
authority is exercised in companies and economies, have been at the
heart of the ongoing world economic crisis. The failure by boards of
directors, for instance, to police excessive compensation, or prevent
bonuses that reward excessive risk taking, can be considered a
corporate governance issue.

World’s poor see few job benefits from trade boom

The boom in global trade over the last two decades has not improved
the quality of most jobs in poorer countries, the World Trade
Organisation and United Nations labour agency said on Monday.
Their joint report, whose conclusions may make a new global free trade
pact even harder to swallow for some, found most workers in
developing countries continue to face low incomes and limited job
security, even in sectors tied to exports.    While international
trade grew to represent more than 60 per cent of global gross
domestic product in 2007, from less than 30 per cent in the
mid-1980s, the number of informal workers has stayed constant or even
grown in poorer states.    'Strong growth in the global economy has
not, so far, led to a corresponding improvement in working
conditions and living standards for many,' the Geneva-based
organisations said.    Informal workers in areas like construction,
agriculture and mining generally do not pay tax and lack access to
benefits such as disability insurance or pensions. They remain as
vulnerable now as before the trade boom, the report said.    'Even in
the formal economy, a growing proportion of workers is undeclared or
works under precarious conditions,' the WTO's Pascal Lamy and ILO
chief Juan Somavia said in the report.    'These outcomes are likely
to worsen as a result of the global financial crisis,' they said.
The WTO's 153 member governments have worked for eight years to
clinch a new 'Doha Round' trade accord, which would open up global
markets to goods and services by slashing duties and other penalties
charged at borders.    That agreement, whose negotiations began in
Qatar in 2001, would also reduce the subsidies countries pay to
shield their farmers and factory workers from outside competition.
But top economies including India, China, the European Union and the
United States, have been reticent to do so, putting the agreement—
which requires full consensus—out of reach.    Monday's report
acknowledges the growth that followed previous WTO trade rounds and
various bilateral and regional accords had principally benefited
skilled workers, with little gains for physical labourers.    The ILO
and WTO concluded that further liberalisation of global trade has the
potential to yield long-term labour market benefits and suggested
that future trade reforms 'can be implemented in an
employment-friendly way.'

Local co to invest $3.3m in Ishwardi EPZ

DOZ & Company Pvt Limited will set up an electrical and electronics
light engineering industry in the Ishwardi Export Processing Zone.
The 100 per cent locally owned company will invest $3.325 million in
setting up its unit and will produce electrical and electronic items.
The company will also create employment opportunity for 522 workers,
a news release said.    An agreement to this effect was signed
between the Bangladesh Export Processing Zones Authority and the
company at BEPZA Complex in Dhaka on Sunday.    BEPZA member
(investment promotion) Md Moyjuddin Ahmed and DOZ & Company director
Md SK Rakib Hossain signed the agreement on behalf of their
respective sides.    BEPZA executive chairman Brigadier General Jamil
Ahmed Khan was present.

Symphony launches new handset

Symphony launched "Symphony D85" in the local market this month, says
a press release. The handset comes with dual SIM card slots, VGA
camera, 2.4 inch display screen, bluetooth, WAP, GPRS, USB
connectivity and an external memory that is expandable up to 4 GB.
The phone also supports 'Java' applications and has a 'Motion
Sensor', which enables users to change games, wallpapers,
screensavers and music by just shaking the phone. It also has a
built-in Yamaha chipset to enhance the sound quality. On purchase,
customers will also receive a 3.5 mm jack headphone and a 1 GB
MicroSD external memory card. At the launching ceremony, Aminur
Rashid, chief executive officer of Symphony, and other high
officials of the company were present. Symphony D85 is now available
for TK 4 ,850.

NGOs demand long-term plan to reduce poverty

Antipoverty Platform, an alliance of 16 non- governmental
organisations (NGO) and local development campaigners, urged the
government to take effective measures to reduce poverty and promptly
implement the Millennium Development Goals (MDGs). They also sought
that the government include the extremely poor population in the
social safety net and extend food and work for them. "The government
should undertake long term planning and effective measures to
eliminate poverty from the country by initially including the
extremely poor in the social safety net programme," said Mohsin Ali,
executive director of Wave Foundation. He was speaking at a press
conference to announce weeklong programmes to mark the International
Poverty Alleviation Day on October 17 , organised by the Antipoverty
Platform at the National Press Club in Dhaka. This platform is going
to organise several programmes in 43 districts to create social
awareness. In his keynote paper, Ali sought necessary government
steps to reduce poverty up to 50 percent before 2015 , as part of
achieving MDGs. He stressed ensuring primary education for all,
gender equity and women empowerment, reduced numbers of child death,
maternity health improvements, a sustainable environment and enhanced
international cooperation for development. According to MDGs,
Bangladesh will have to reduce its poverty rate to 29 percent by
2015. At present, around 40 percent of the population is poor, of
which around 20 percent is extremely poor. Abdul Awal, chairperson
of SUPRO, a local campaigner for good governance, emphasised
creating awareness and organising social movement to alleviate
poverty, as rich countries often fail to keep their promises to help
attain MDGs in the least developed countries. "Global leaders have
not fulfilled their commitment to provide official development
assistance (ODA) to countries like Bangladesh. Furthermore, the
assistance we have been receiving is insufficient to achieve MDGs,"
he said. "Developed countries should fulfill their pledges to help
us attain MDGs within the stipulated time," he added. The rich are
supposed to provide 0.7 percent of their GDP as ODA in the global
bid for development. But as per government data, net ODA inflow into
Bangladesh has been on the decline since the 90 s. In fiscal 1990-91
, Bangladesh received net ODA of $1 ,240 million, while it declined
to $110 million in 2006. In fiscal 2007-08 , net ODA stood at
$96.1 million. Ranjan Karmakar, executive director of Steps Towards
Development (STD), and Asgor Ali Sabri, sector head of Action Aid,
were also present.

Central bank to track farm loan by mobile

Bangladesh Bank (BB) has advised banks to preserve the mobile phone
number of each customer in their files to be able to monitor the
distribution of farm loans. The central bank has recently issued a
circular to all banks. The circular also said that if the
agricultural loan customer does not have a mobile phone, his
neighbour's mobile number must be preserved in the customer's file. A
BB official said there were allegations of irregularities in the
distribution of agricultural loans. The provision has been put in
place to promptly detect such irregularities. An inspection team
visiting a bank branch will now able to reach the loan recipient
easily. BB has undertaken the initiative to facilitate proper
distribution of the agricultural loans, an official said. The bank
has appointed 83 new assistant directors and their training scheme
includes training at field level. The 83 new recruits will be trained
to monitor whether or not farm loans are being properly distributed.

Currency rate

Local Market FX Local inter-back FX market was active today. There
was ample liquidity in the market and the USD/BDT rate traded in a
similar range to the previous working day. Money Market Money market
was active on Monday. The market was liquid; and the majority of
deals traded around 1 %. Rates were sightly higher the previous
working day. International Market The dollar hit a two-week high
against the yen on Monday with traders covering short positions as
they debated the timing of tightening in US monetary policy, though
sentiment on the greenback remained bearish.

Asian markets lower

Asian shares fell on Monday as sellers moved in following several
days of gains last week, while traders also sat on the sidelines as
the third- quarter earnings season gets under way. Hong Kong lost 0.93
percent after rising for five consecutive days last week, while
Sydney was 0. 28 percent lower and Seoul dropped 0.42 percent.
Shanghai shed 0.59 percent, pushed by fears of a share glut as
authorities prepare to launch a new board. However, Singapore added
more than one percent on the back of data showing the economy grew
in the past quarter. And India was pushed 2.31 percent higher on
better than expected industrial figures. Tokyo was closed for a public
holiday. HONG KONG: Down 0.93 percent. The Hang Seng Index fell
200.09 points to 21 , 299.35.. SYDNEY: Down 0.28 percent. The
S&P/ASX 200 dropped 13.1 points to close at 4 ,739.8. SHANGHAI: Down
0.59 percent. The Shanghai Composite Index, which covers both A and
B shares, lost 17.23 points to 2 , 894.48. Banks started well on the
Huijin buy-up but short-term investors later booked gains. SEOUL:
Down 0.42 percent. The KOSPI ended down 6.98 points at 1 , 639.81.
SK Energy fell 9.9 percent to 113 ,500 won and S- Oil dropped 1.1
percent to 61 ,000. TAIPEI: Up 0.37 percent. The weighted index rose
27.92 points to 7 , 599.88. SINGAPORE: Up 1.05 percent. The Straits
Times Index rose 27.96 points to 2 , 680.47. Singapore Telecom
gained five cents to 3.13 and Singapore Airlines advanced 16 cents
to 13.90. BANGKOK: Up 0.67 percent. The Stock Exchange of Thailand
gained 4.99 points to close at 751.86. KUALA LUMPUR: Flat. The Kuala
Lumpur Composite Index lost 0.49 points to 1 , 233.33. Second
largest banking group CIMB lost 1.5 percent at 12.04 ringgit while
leading investment holdings company Tanjong shed 3.4 percent at
3.46. JAKARTA: Down 0.72 percent. The Jakarta Composite Index lost
17.71 points to 2 , 456.68. MANILA: Down 0.40 percent. The composite
index gave up 11.81 points to close at 2 , 930.97. MUMBAI: Up 2.31
percent. The 30- share Sensex rose 384.01 points to 17 , 026.67.

BB moves to mop up liquidity Reverse repo rate down 4 points

Bangladesh Bank (BB) has moved to resume reverse repo operations
after a brief lull -- to take excess liquidity off the banking sector
-- but cut its interest rate by 4 percentage points. After remaining
quiet on the matter for about seven months, the central bank
announced the new plans. The banking sector is currently witnessing a
liquidity glut of about Tk 38 ,000 crore, up from nearly Tk 35 ,000
crore in June. From today, BB will offer a 2.5 percent interest
rate for reverse repo, down from 6.5 percent in March. BB officials
said the reverse repo operations will encourage banks to take part in
auctions as the reduced rate is still higher than the present call
money rate, now hovering around 1 percent amid droopy demand for
money. BB that aims to pin inflation at 6.5 percent for fiscal
2009-10 , reduced the interest rate on a lending instrument -- repo
-- by 4 percentage points to 4.5 percent -- keeping a door open for
the banks to seek loans in times of need. BB has moved to resume
short-term money market instrument operations, as monthly inflation
edged up. In July, point-to-point inflation rose to 3.46 percent from
2.25 percent a month ago. Officials, referring to excess liquidity in
the banks, said some banks are extending consumers credit because of
poor demand for loans in the productive sector. "It may cause a rise
in inflation due to a rise in demand," a BB official said. Referring
to the present call money rate, he said as demand for money in the
banking sector remains low, "it will encourage banks to lend money
to the central bank at a rate of 2.5 percent interest". "But if
commercial banks need money in the short term, they will be able to
borrow from the central bank."

BERC GET NEW CHAIRMAN

Syed Yousuf Hossain joined Bangladesh Energy Regulatory Commission
(BERC) yesterday as its chairman, said a statement. The Power, Energy
and Mineral Resources Ministry issued a gazette notification about
the appointment for three years. Earlier, he was the comptroller and
auditor general of Bangladesh. During his 35- year career, Hossain
served different ministries as secretary. He was the chairman of
Bangladesh Textile Mills Association. Hossain also served different
multinational companies.