Weak data signal deepening economic slowdown
By Norma Cohen
Published: August 5 2008 11:50 | Last updated: August 5 2008 11:50
More signs of a deepening economic slowdown in the UK emerged on Tuesday with publication of data on the manufacturing and services sectors.
The key Industrial Production Index showed an unexpected 0.8 per cent drop in the three months to June from the previous quarter while for June alone it contracted by 0.2 per cent. The manufacturing component of that index showed a drop of 0.5 per cent in June from May.
“It is clear that manufacturers are now being hit hard by muted domestic demand, weakening activity in key export markets, elevated energy and commodity prices and tight credit conditions,” said Howard Archer, chief economist at Global Insight.
Moreover, the closely-watched purchasing managers’ survey for the services sector - the UK economy’s single most important sector - rose slightly to 47.4 in July from 47.1 in June but nevertheless indicated further solid contraction of activity. A reading below 50 indicates shrinking activity.
The CIPS/Markit purchasing managers’ survey also pointed to a sharp contraction of incoming business. The Incoming New business Index, a component of the PMI, posted a reading of 44.7, the third successive monthly fall and the sharpest in the 12-year history of the survey.
Additionally, increasing pessimism among some service providers is leading to job reductions, signalling a future rise in UK unemployment. UK services providers, in the Employment Index component, recorded a reading of 46.6.
In particular, weakness was recorded in the financial services and hotels and restaurants sectors.
PMI surveys, particularly of the services sector, are closely watched signposts for economic activity by members of the Bank of England’s Monetary Policy Committee. The MPC meets this Thursday to consider interest rate policy and the data may offset some concerns about surging inflation that some argue will require an interest rate rise later this year.
Indeed, the survey data provide some hints that cost inflation may have peaked, with input prices still rising albeit at a slower pace than that recorded in June.
Paul Smith, economist at Markit Economics, said: “Combined with the construction and manufacturing PMI data, the services survey confirms that private sector growth has practically ground to a halt at the start of the third quarter, with the rate of expansion only very marginal at best.”
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The Short View: Emerging market carry trade
By John Authers, Investment Editor
Published: August 6 2008 19:26 | Last updated: August 6 2008 19:26
El superpeso is back. For the first time since 2002, a dollar buys less than 10 Mexican pesos.
The last time it was this strong, earning the superpeso nickname, it caused alarm for exporters, who thought it wildly overvalued. But once inflation in the two countries is taken into account, it is more overvalued now, even compared with an inflated 2002 base. Prices have risen more in Mexico. To maintain purchasing power parity, the dollar should have risen by 18.7 per cent since 2002.
An overvalued Mexican peso has caused global crises in the past. But this is different, with no official peg, and Mexican policymakers actively trying to stop the overvaluation.
Rather, the problem is that Mexican rates have hit 8 per cent, to fight inflation. That attracts “carry traders” looking for currencies with a high yield – a risky game if the currency suddenly depreciates.
Other emerging markets, led by Brazil and Turkey, with base rates of 13 and 16.75 per cent respectively, have attracted carry traders for years.
Since 2002 (when it was in crisis), Brazil’s real has gained 142 per cent against the dollar. To maintain purchasing parity, the move should have been in the opposite direction, with the dollar gaining 28 per cent.
Turkey’s lira, which unlike the real is not fortified by commodity exports, has gained 45.5 per cent against the dollar. To maintain parity, the dollar should have risen 53.7 per cent.
The resilience of carry trades is all the stranger as the US dollar is strengthening, near a six-month high against a trade-weighted index. Australia’s dollar, a big carry-trade destination, is also instructive. It has dropped 7 per cent against the US dollar in three weeks, as its central bank signals rates might come down from their current 7.25 per cent.
Increasingly, the emerging market carry trade looks like one of the last unburst bubbles.
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Germany suffers steep drop in orders
By Bertrand Benoit in Berlin
Published: August 6 2008 22:53 | Last updated: August 6 2008 22:53
German manufacturing orders fell by an unexpectedly steep 2.9 per cent in June, data released on Wednesday showed, underlining the rapid deterioration of the country’s economic performance and raising fears about the health of the European economy as a whole.
The drop, which was much larger than expected, was the seventh consecutive month-on-month fall, the longest such downward spell in nearly 20 years.
“This is all quite worrisome,” said Dirk Schumacher, an economist at Goldman Sachs. “There is no denying that the underlying trend has weakened more than I would have expected.”
The latest figures left the average order level in May and June down 4.4 per cent from a year ago.
The data came a day after government officials told the Financial Times that Europe’s largest economy had contracted in the second quarter by about 1 per cent – again below economists’ predictions. Official gross domestic product figures will be released next Thursday.
“The German economy has been in a freefall since the end of the first quarter,” wrote Carsten Brzeski, economist at ING Bank. “While this could be filed as a one-off technical correction, very weak confidence indicators and today’s new factory orders paint a bleak picture for the rest of the year.”
While the headline orders figure was disappointing, economists were equally worried by the detailed breakdown, which showed that the weakness in orders had come mainly from abroad. Orders from outside Germany fell 5.1 per cent on the month against a 0.6 per cent fall for domestic orders.
“This means exports will be weaker down the line,” Mr Schumacher said. “The only good news is on unemployment, and that is a lagging indicator.”
Exports have been the main engine of German growth throughout the country’s two-year-old recovery. A rapid deterioration would leave Germany caught between falling exports and domestic consumption that is refusing the budge.
Retail sales fell by 1.4 per cent in June, according to data released last week.
Another cause for concern was the fall in orders from within the eurozone. The drop of 7.7 per cent was almost double the 3.1 per cent drop from outside the region.
That supports an argument, being made by certain economists, that the European economy, long thought to be more resilient than the US to commodities inflation and the financial crisis, could be in for a protracted period of low growth.
It could prompt the European Central Bank, which has so far been more concerned with inflation, to rethink its strategy.
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Russia bids to find new elite breed
By Charles Clover in Moscow
Published: August 6 2008 17:53 | Last updated: August 6 2008 17:53
The Kremlin has begun a recruitment drive to find a new elite after complaints by Dmitry Medvedev, Russia’s president, that the country has a shortage of talented civil servants, managers and politicians.
Regional governors have received letters from both Mr Medvedev and Vladimir Putin, prime minister, in the past couple of days, asking them to contribute names to a database of the country’s “reserve of manpower”. The term has a communist ring to it, harking back to the Soviet policy of creating a talented pool of would-be party bureaucrats to take the helm when the old generation retires.
A database was begun last year but after painstaking research, it contains just 7,000 names, according to the newspaper Nezavisimaya Gazeta. In a speech on July 23, Mr Medvedev criticised the effort, saying there was a “famine” of talent in Russia in both government and business.
Outlining plans to replace several Russian regional governors, he said: “We don’t have a bench of fresh reserves. We have to bash our heads against a wall every time we must replace high officials.”
Civil service used to be a prestigious profession in Russia, ever since the Tsar Peter the Great created 14 ranks of the civil service in 1722.
During the Soviet Union, state service was the route to the best lifestyle in the country, and high ranking civil service jobs came with cars, large apartments and country houses as perks.
Since the collapse of communism, however, the prestige of the bureaucracy has fallen drastically as talented managers find better paying work in the private sector or have emigrated.
The project of compiling a list of prospective officials is being managed by United Russia, the political party headed by Mr Putin that has become a quasi state institution. But party representatives have said the database would be open to everyone, not just party members.
Yuri Kotler, co-ordinator of the database project, says his team is only just starting to grapple with the immensity of the project.
“We are specifying criteria,” he said. “We are discussing which capabilities and leadership qualities the aspiring leaders must have, which ideology they should be guided by in life, and also – do they plan to live in Russia or not.
“We are developing a sophisticated selection system to find people who are interesting to us.”
The database will not be open to anyone over 47 years old, he said, and the target for the end of the year is to have 50,000 names.
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Russia can play a vital role in the west’s security
By Maurizio Massari
Published: August 6 2008 19:49 | Last updated: August 6 2008 19:49
The enlargement of Nato to include Georgia and Ukraine could become the most dangerous spoiler in relations between Russia and the west next year. It would also set the new US president off to a bad start. If Nato’s foreign ministers were to decide in December that the two former Soviet republics were ready for the membership action plan and if Russia retaliated by freezing its relations with the alliance, that would create a lose-lose situation for everybody – for Nato, for Russia and, ultimately, also for Kiev and Tbilisi.
An already nationalistic Russia would fall prey to its fear of being encircled again and it would dangerously isolate itself from the west. The alliance, in turn, would revert to its 20th-century raison d’être – containing an increasingly hostile Russia – instead of focusing on more crucial tasks, including its adaptation to the new security challenges. This would further exacerbate the rifts within the European Union over its Russia policy.
But in a different scenario, could Georgia’s and Ukraine’s legitimate aspiration to join the alliance turn a potential spoiler into a win-win situation for both Nato and Russia?
Yes, it could, but only if both sides show political courage. Contrary to today’s received wisdom, Georgia’s and Ukraine’s wish to join the alliance could provide the right conditions for two positive developments: Nato could at last shake off its legacy as a cold war and anti-Russian alliance; and a new mindset could take hold in Russia, involving a vision of security based on co-operation, not on competition or on spheres of influence.
How can this be achieved? A strategy based on three elements could work. First, the US, Nato, Russia, the EU and the Organisation for Security and Co-operation in Europe should forge a new compact jointly to manage security threats in their common neighbourhood, which stretches from Ukraine, through the Caucasus to Central Asia (an area whose geostrategic importance has grown as a result of the conflict in Afghanistan). The group of these organisations would share responsibility for combating common threats in the area, ranging from terrorism to Islamic fundamentalism, to drug-trafficking and organised crime. They would also commit themselves to finally resolving the frozen conflicts in Transnistria, Abkhazia and Nagorno-Karabakh.
Russia has been resentful of the west since the end of the cold war, claiming that it is unfairly treated as a junior partner and demanding formal recognition as an equal. A new security compact would grant Russia that status: the sharing of power between Russia, the EU, Nato, the US and the OSCE would go hand in hand with shared responsibility for “securing security”. The new compact should complement these institutions, not replace them.
Second, within this new co-operative security framework Russia would shelve its opposition to Georgia and Ukraine accessing the membership access plan. In fact, if Nato becomes part of a larger, co-operative security framework in which Russia is an equal partner, Moscow should have nothing to fear from Georgian or Ukrainian membership. Indeed, Moscow would benefit from the fact that Nato membership would encourage its two neighbours to become more responsible regional players. Russia would thus boost its legitimacy in the eyes of the “new” Europe, which still mistrusts it and sees it as a sovereign democracy bent on denying sovereignty to others.
Finally, in return for Russia shelving its opposition to the membership access plan, both Georgia and Ukraine would commit to negotiating new bilateral pacts of friendship and co-operation with Russia to consolidate trust.
Implementing such a strategy depends on both the west and Russia showing the political will to do so. In just over a year we will celebrate the 20th anniversary of the end of the cold war. What better way could there be to dispel the tensions between Russia and the west than to work together in addressing the common challenges of the 21th century? A US-Russia-Nato-EU-OSCE summit and the signing of a new Eurasian security charter could help to consign this hangover from the past to the archives and allow us to start afresh. It is high time that happened. A reformulation of the terms of security co-operation between the west and Russia in their common neighbourhood would also bode well for future co-operation in other hot areas, with Iran and Afghanistan heading the list.
The writer is head of policy planning at the Italian ministry of foreign affairs. He writes in his personal capacity
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IMF warns against laxer fiscal regime
By Robin Harding
Published: August 7 2008 03:00 | Last updated: August 7 2008 03:00
The International Monetary Fund sent a warning to the government yesterday that it should not try to spend its way out of a slowdown.
In a pessimistic report on the UK economy, the IMF's directors said there was "no room for slippages in the current fiscal year", and a number of directors recommended a stronger-than-planned fiscal stance for 2009 and beyond.
As the Financial Times disclosed last month, the Treasury is also working on plans to change the UK's fiscal rules on spending and debt to a new framework that would initially allow for increased borrowing.
But the IMF pointedly advises against a laxer regime, praising the UK's strong policy framework. "Our recommendation is that the 40 per cent of output ceiling on net public debt should be retained," said Ajai Chopra, the IMF's mission chief for the UK. The IMF expects the 40 per cent rule to be breached, but calls for "concrete and frontloaded plans to bring debt back below the ceiling".
The IMF also slashed its forecasts for the economy. It expects growth of 1.4 per cent this year and 1.1 per cent in 2009, similar to the consensus of independent economists, but far below the Treasury's expectations. The forecasts of Alistair Darling, chancellor, on which estimates of tax revenue are based, are still for growth of between 1.75 per cent and 2.25 per cent this year and between 2.25 per cent and 2.75 per cent in 2009.
The IMF's role as guardian of the international financial system means that its strictures will carry considerable weight, intensifying pressure on Gordon Brown and Mr Darling. The prime minister and the chancellor are considering a number of fiscal giveaways, such as the deferral of stamp duty on house sales, to boost the property market, and measures to help consumers with the cost of fuel, as they seek to bolster the government's waning popularity.
The Treasury, in its response to the report, said: "We welcome the IMF's recognition of government policies that have underpinned the strong performance of the UK economy over the last decade."
The IMF accepts that higher taxes or lower spending could worsen an economic slowdown but argues that if the UK's fiscal framework lost credibility, sterling would be undermined and the Bank of England would be forced to raise interest rates higher than would otherwise be necessary.
There was a warning, too, for the doves on the Bank's monetary policy committee as it prepares to announce its decision on interest rates today. The IMF sees "little scope for monetary easing at present". Whereas the Bank is uncertain, the IMF believes that inflation expectations in the UK are rising and fears that they will spill over into higher wages.
One member of the MPC, David Blanchflower, has consistently voted for a cut in UK interest rates from 5 per cent.
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Robust demand in Russia boosts Carlsberg
ByRobert Anderson in Stockholm
Published: August 5 2008 15:26 | Last updated: August 5 2008 15:26
Carlsberg’s shares rose sharply on Tuesday after it announced that net profit for the second quarter was up 36 per cent, boosted by the acquisition of UK brewer Scottish & Newcastle and continued robust growth in the Russian market.
The Danish brewer – whose brands include Carlsberg, Tuborg, Baltika and Kronenbourg – also forecast a 10 per cent organic growth in sales and a 12 per cent increase in operating profit for the year.
Its share price was up 15 per cent at DKr436.5 in afternoon trading.
This was Carlsberg’s first set of results since it bought Scottish & Newcastle’s assets in France, Greece, China, Vietnam and most importantly Russia, the market responsible for about half the group’s profit, for Dkr57bn in April.
Carlsberg made a net profit of Dk1.42bn ($270m) while sales were up 39 per cent to Dk17.54bn in the second quarter. Group volume sales rose by 24 per cent in the first half and 6 per cent organically. Volume sales in eastern and western Europe have become equal though operating profit in the former region still lags slightly.
The brewer rebutted fears that the Russian market was weakening by maintaining a 5 per cent increase in volume sales for the year despite a mere 2.4 per cent rise in the first half. During the takeover battle for Scottish & Newcastle, Carlsberg had predicted a 5 per cent volume growth in Russia and some analysts are now predicting even stronger growth.
In Russia, Carlsberg achieved organic volume growth of 6.5 per cent in the second quarter against market growth of 2.8 per cent. Carlsberg’s Baltika brand, the top Russian beer, increased volume sales by a quarter as local drinkers moved up to premium beers.
In western Europe, Carlsberg’s organic sales were flat but it was able to increase prices to more than offset rises in raw material and energy costs.
Jorgen Buhl Rasmussen, Carlsberg’s chief executive, said the brewer’s strong brands had enabled it to raise prices by an annual average of 5 per cent and he saw no sign of consumers trading down to cheaper beers. Consequently Carlsberg’s overall operating margins – which have long been below its peers – improved from 14.7 per cent a year ago to 18 per cent.
Volumes in the French market – where Carlsberg is the market leader with Kronenbourg – declined by 6 per cent in the first half but the brewer said that in the full year the market would return to its trend decline of 1 per cent to 2 per cent.
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Mauritanian army stages coup
Agencies
THOSE WERE THE DAYS: Mauritanian President Sidi Ould Sheikh Abdallahi, left, and coup plotter Mohamed Ould Abdul Aziz in a file photo. (EPA)
NOUAKCHOTT: Mauritanian soldiers overthrew the elected president in a coup yesterday and announced the formation of a military ruling council.
Soldiers in this northwest African state seized President Sidi Ould Sheikh Abdallahi at his palace after he sacked four senior army officers.
“The security agents of the BASEP (Presidential Security Battalion) came to our home around 9:20 a.m. and took my father away,” said Amal Abdallahi, the president’s daughter. “We are being kept in the house, forbidden to leave. There are guards posted in the kitchen, the bedrooms, even the showers. The phones have been cut. It is certainly a coup.”
The Organization of the Islamic Conference (OIC), the African Union and the European Union condemned the coup.
A state council, led by one of the sacked officers, Mohamed Ould Abdul Aziz, said Abdallahi was now “former president”. He annulled his previous decree sacking Abdel Aziz and the heads of the army and gendarmerie. The communiqué, described as the council’s “Statement No. 1,” was broadcast by Arabic television stations.
Abdallahi, who was elected in free and fair elections last year, took over from a military junta that had toppled President Maaouya Ould Sidahmed Taya in a bloodless coup in 2005.
A presidency official, who declined to be named, said Prime Minister Yahia Ould Ahmed El-Ouakef and the interior minister had also been arrested and taken to an unknown destination.
The return to democratic rule last year had been widely welcomed by the international community.
Ekmeleddin Ihsanoglu, the OIC secretary-general, stated that he was particularly dismayed by the military takeover as Mauritania had been exhibiting exemplary movement toward the entrenchment of democracy and rule of law with the visible positive role and support of its armed forces.
Ihsanoglu reminded all Mauritanians and the international community that the OIC had invested heavily in the democracy project in Mauritania and hoped that the armed forces would continue their positive role in favor of democracy. He called for the restoration of the democratic process as soon as possible, including an immediate release of the president, the prime minister and other members of the government.
A statement issued at African Union headquarters in Addis Ababa said: “The African Union condemns the coup d’état and demands the restoration of constitutional legality.”
The European Union condemned the coup and demanded Abdallahi be restored to power.
“The European Union is very concerned by the situation in Mauritania, which puts into question the remarkable democratic progress in this country,” it said.
Abdallahi dismissed his government in May after criticism over its response to soaring food prices and to a series of militant attacks over the last year. Mauritania is one of only three Arab League states to have diplomatic relations with Israel.
A new government resigned last month in the face of a proposed no-confidence vote, and a replacement Cabinet lacked the support of the opposition Union of Forces for Progress (UFP) and Islamist Tawassoul parties, which were included in the previous government.
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Rwanda calls for French officials’ indictment
KIGALI, Aug 6: Rwanda’s information minister said on Wednesday she hoped a raft of French political and military officials accused of playing a role in the country’s 1994 genocide would soon be indicted for war crimes.
A 500-page report released Tuesday by Kigali alleged that France was aware of preparations for the genocide and that French forces in Rwanda contributed to planning the massacre and actively took part in the killing.
“The government has asked the courts to use this report. We hope that legal proceedings will follow,” Information Minister Louise Mushikiwabo said.
Quoted separately in Britain’s Financial Times newspaper on Wednesday, she explained the report would be considered by the public prosecutor as the basis for indictments which could lead to the first attempts by an African nation to extradite European nationals for alleged war crimes.
“We don’t believe any French citizen or other citizen is above the law, especially when it comes to crimes as serious as genocide,” she said.
“We hope the French will take this report as seriously as Rwanda has taken it and, when the indictments come out, will co-operate.”
IBUKA, a Rwandan association for genocide survivors, urged France to prosecute its citizens accused in the report.
“The French judiciary should be the first to bring French criminals to justice,” said its president Theodore Simburudari.
The report named former French prime minister Edouard Balladur, former foreign minister Alain Juppe and the then-president Francois Mitterrand, who died in 1996, among 13 French politicians accused of playing a role in the massacres.
Dominique de Villepin, who was then Juppe’s top aide and later became prime minister, was also among those listed in the Rwandan report, which names 20 military officials as being responsible.
France, meanwhile, accused Rwanda of making “unacceptable accusations” by alleging that Paris played an active role in the genocide, but said it was still determined to rekindle ties with Kigali.—AFP
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Moscow denies sanctions deal after Iran snub
By Stephen Fidler in London and Demetri Sevastopulo in,Washington
Published: August 7 2008 03:00 | Last updated: August 7 2008 03:00
Russia yesterday denied having agreed with the US, UK and other countries to push for another round of economic sanctions against Iran at the United Nations.
US and British officials said there would be a push for further sanctions after Tehran sidestepped an initiative aimed at launching negotiations over its disputed nuclear programme.
Washington called Iran's response "unacceptable", Germany said it was "inadequate". Kim Howells, a British foreign minister, said there was "no choice but to pursue further sanctions against Iran".
Vitaly Churkin, Russia's ambassador to the UN, dismissed reports that the powers had agreed on a path to more sanctions, saying there had been "no firm agreements or understandings".
"The main thing to remember [is] that the negotiating track is open, it is being pursued, there are contacts between the parties," Mr Churkin was cited as saying by Reuters.
His comments followed yesterday's telephone conference call on the Iranian nuclear issue between Javier Solana, the European Union's foreign policy chief, and senior officials from the six powers pushing to negotiate an end to Iran's uranium enrichment programme, which include China, France and Russia.
They discussed a one-page letter from Saeed Jalili, Iran's senior nuclear negotiator, received on Tuesday, which they had hoped would respond to their proposal.
This proposal, which has US backing, suggested a six-week period in which the powers would halt efforts to secure new sanctions in return for Iranian agreement not to augment its uranium enrichment programme.
During this period, known as "freeze for freeze", the two sides would discuss how to start negotiations proper, which would begin once Iran stopped enriching uranium altogether. But Mr Jalili's letter, which, said one official, covered just one side of paper in large-type English and a half page in Farsi, did not state Iran's position on freeze for freeze and instead repeated Iran's desire for broader security discussions.
That was rejected by London, Washington, Paris and Berlin, and appears to have disappointed Russia and China, which have taken a softer line towards Iran.
"We're very disappointed that Iran has failed yet again to give Javier Solana a clear answer to the . . . generous incentives package," said Gonzalo Gallegos of the state department. A British official said the response was "at the lowest end of expectations".
At the UN, Mr Churkin said: "We would have preferred a clear yes. But it is more complicated than that . . . We do believe that dialogue can continue."
Talks over a fourth round of UN sanctions are unlikely to begin before September.
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Gulf sovereign wealth funds exercise financial muscle
By Rupert Walker | 4 August 2008
The Gulf States may be diversifying risk by spending their oil riches overseas, but they are also provoking an ambivalent response from the West.
Surging oil prices have given Middle East producers renewed financial muscle. More worryingly for some Western leaders, they are showing a confidence, bordering on brazenness, to exercise that strength by buying up stakes in key industries throughout the world at a time when the financial power of Western banks has been neutered by subprime and the credit crisis.
The most recent and visible of the conduits for those investment outflows, the sovereign wealth funds (SWF) are accused of being opaque with their financial reporting and investment strategy, and of pursuing political as well as commercial ends. The government of Abu Dhabi even felt compelled to write reassuring letters to finance ministers around the world, explaining that it is investing merely for financial gain, not power and influence. There is, apparently, no empire building by stealth going on.
The six nations of the Gulf Cooperation Council (GCC), namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, earned $381 billion from their oil and gas exports in 2007 and a further $26 billion from gas, according to the Institute of International Finance (IIF). If the oil price stays at about $100 a barrel, they will reap a cumulative windfall of almost $9 trillion by 2020, says the McKinsey Global Institute, compared with a combined GDP of just $800 billion last year.
The GCC added $215 billion to its stock of foreign assets in 2007, divided between the region’s central banks, its SWFs, and its hereditary ruling class. Their total foreign assets now amount to around $2 trillion. They have been using this cash aggressively, have been acting quickly and have become a dominant force in global stock markets.
Take a recent example. In June, the Qatar Investment Authority (QIA), a £30 billion SWF set up three years ago to invest profits made from the world’s largest gas field, bought a near-8% stake in Barclays Bank, Britain’s third-largest. The investment was made by spending £1.7 billion ($3.9 billion) on a maximum 7.7% holding as part of Barclays’s £4.5 billion capital raising. At the same time, Challenger, an offshore vehicle set up by Qatar’s Prime Minister to invest family wealth, intends to spend £533 million on a 2.3% share of the bank.
The QIA also bought 7 million shares in J Sainsbury at an undisclosed price in a move that took the Qatari shareholding in the UK supermarket chain from 25% to just under 25.3%. This followed a failed takeover bid last November, which left the QIA with estimated losses of more than £1 billion on its original investment in Sainsbury. At the same time the London Stock Exchange led the FTSE 100 risers on speculation that the QIA had increased its 15.1% stake in the stock exchange operator.
There had been rumours earlier in the year that the QIA was planning to buy a stake in Royal Bank of Scotland (RBS). And the QIA had also attracted notice with its acquisition of 1% to 2% of Credit Suisse, as part of a drive to build up a $15 billion portfolio of Western bank assets.
Shortly after the Credit Suisse deal, the European Commission (EC) approved proposals for SWFs to be requested to adopt a voluntary code of conduct requiring certain standards of corporate governance and disclosure, and expressed a fear that these funds were being used as an implement of geopolitical strategy.
Yet, European and US banks have been busy courting Middle East SWFs to bail them out. For instance, the Kuwait Investment Authority (KIA) contributed $5 billion to a capital-raising package for Citigroup and Merrill Lynch in January, and the Abu Dhabi Investment Authority (ADIA), which is the world’s biggest SWF with assets of about $800 billion, pumped $7.5 billion into Citigroup last November. In difficult times, politicians have encouraged these moves.
Of course, for the SWFs, the purchases have been a great opportunity to build holdings in a banking industry viewed as having strong long-term growth potential, at a time when shares are relatively cheap and political concerns quite muted.
New kids on the block
In February the QIA said that it had $15 billion to spend on overseas financial institutions over the next two years. The £30 billion fund itself is expected to double in size by 2010. But, the QIA is only one of several with huge financial clout.
Some of these funds have been around for a while. Kuwait first set up a fund to invest surplus oil revenues in 1953, while ADIA was established two decades later, but both have normally been conservative, hands-off investors. The difference has been the arrival of the new kids on the block, with a more aggressive, ambitious agenda fuelled by massive spending powers. In addition to QIA, a range of Dubai government-linked vehicles such as Istithmar and Dubai International Capital (DIC), as well as Abu Dhabi’s Mubadala Development Company are keen to buy strategic stakes in companies or even full control.
In May, Saudi Arabia announced that it too would set up an SWF, reflecting healthier finances due to the rise in oil prices over the past five years and perhaps less anxiety about encountering international criticism. The government is also keen to modernise and expand its financial services sector.
It will start relatively small. Mansour al-Maiman, the secretary-general of the Public Investment Fund (PIF), an arm of the Saudi finance ministry, told the Financial Times that the new fund is expected to have authorised capital of SR20 billion ($5.3 billion) at its launch, and will aim to build up a diversified portfolio of investments in order to maximise long-term rates of return. He said that although the PIF will own the investment vehicle, the SWF will have its own independent management team. Interestingly, he suggested that it will behave in a similar way to Norway’s $350 billion General Pension Fund, recognised as the most transparent SWF, which would signal a significant shift away from the region’s usually opaque dealings.
Observers reckon, however, that the Saudi fund is more likely to function like the Government of Singapore Investment Corporation (GIC), which provides little detail about its operations beyond indicating the total value of its portfolio and the countries where it operates.
While nervous Western governments express at best ambivalence, at worst hostility to this shift in financial power relations, Gulf SWFs have also been looking east, especially toward the booming economies of Asia. Late last year, the QIA announced that it planned to raise its Asian allocation to 40% of the fund’s investments, and in mid-February, DIC said it plans to invest $5 billion into China, India and Japan over the next three years, while the KIA has also hinted that it will increase its Asian investments. As Istithmar pointed out at the beginning of the year, Asian countries are generally more welcoming to SWFs.
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German insurer Allianz warns on profits after weak second quarter
AFP
AFP - 10 minutes ago
FRANKFURT, (AFP) - German insurance group Allianz warned late Wednesday that it would not reach its operating profit target going into 2009 following a difficult second quarter.
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It said in a statement that it expected the financial crisis to persist.
In 2006, the group had set a goal of increasing its operating profit by an average of 10 percent by next year.
But in light of "contrary winds in the market," Allianz said it now expected to miss that target.
Net profit plunged by 28 percent in the second quarter to 1.5 billion euros (2.3 billion dollars) and operating profit shed 36 percent to 3.3 billion, the statement said.
Turbulence on international financial markets had seriously cut into its life insurance activities, the group explained.
Its banking unit Dresdner Bank was also hit by the turmoil, posting an operating loss of 566 million euros in the three months from April to June.
Dresdner's investment banking activities suffered in particular from losses in market operations and asset writedowns linked to the crisis.
Allianz said it expected the difficult market conditions to continue into next year.
Its profit warning comes a week after one from the German reinsurance group Munich Re.
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Insurer AIG posts large loss on bad mortgage bets
Reuters
By Lilla Zuill Reuters - 1 hour 1 minute ago
NEW YORK (Reuters) - American International Group posted its third consecutive quarterly net loss of more than $5 billion (2.57 billion pounds) on Wednesday as it wrote down bad mortgage-related investments, sending its shares down almost 8 percent.
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The world's largest insurer and one of the hardest hit in the credit crisis also reported a general deterioration in its mainstream insurance businesses, which were hurt in particular by a decline in investment income and losses from its mortgage insurer, United Guaranty.
"Our second quarter results were adversely affected by the severe conditions in the housing and credit markets and a very difficult investment environment," AIG's chairman and chief executive Robert Willumstad said in a statement. Willumstad took the CEO job in June after Martin Sullivan resigned.
"We have a lot of work to do to restore AIG's profitability to where it should be," Willumstad warned, adding that AIG was considering all options as it looked to improve results and its risk profile and protect its capital base.
"We are examining every business, as well as the assumptions underlying how we do business in the markets where we have a presence," Willumstad said. He said a progress report would be issued in late September.
BATHED IN RED
AIG said its second-quarter net loss was $5.36 billion, or a loss of $2.06 a share, compared with net income of $4.28 billion, or $1.64 a share, a year ago. It had an adjusted net loss of 51 cents a share. Analysts, on average, had forecast a profit of 46 cents a share, according to Reuters Estimates.
It was the second-largest loss in AIG's 89-year history, surpassed only by the $7.7 billion net loss it recorded in the first quarter of 2008. AIG has posted net losses exceeding $18 billion over the past three quarters.
Long known for profitability, AIG said some of its workers had received Wells notices, indicating the U.S. Securities and Exchange Commission was considering civil action. The Justice Department and SEC are investigating investments that led to AIG's quarterly losses.
AIG said it recorded $5.56 billion in second quarter unrealized market valuation losses on credit default swaps, the same area that led to losses in the prior two quarters.
The company's financial ratings have been lowered, and it has been forced to raise $20 billion in recent months to strengthen its balance sheet.
Portfolio manager Thomas Russo at Gardner, Russo & Gardner in Lancaster, Pennsylvania, which manages more than $3 billion in assets and owns AIG shares, said he was concerned that AIG's credit losses would undermine its insurance business. AIG is best known for its insurance business.
Russo said he owns AIG shares because of strong growth forecasts for its foreign life insurance and retirement services. "What would be important is to know ... is this an up-to-date and full reflection of what they know to be their exposures," he said.
Much of the second-quarter 2008 loss was due to what AIG described as "severe, rapid declines in fair values of certain residential mortgage-backed securities and other structured securities in the second quarter." AIG said it had concluded that it could not "reasonably assert that the recovery period would be temporary."
AIG said second-quarter results included pre-tax net realized capital losses of $6.08 billion ($4.02 billion after tax) arising primarily from other-than-temporary impairment charges in its investment portfolio. The company said this compared to pre-tax net realized capital losses of $28 million ($17 million after tax) in the year-ago quarter.
General insurance operating income fell 54 percent to $1.39 billion, reflecting a 28.3 percent decline in investment income primarily due to lower partnership and mutual fund income, and an increase of $440 million in operating losses at United Guaranty Corp.
The general insurance division wrote $12.22 billion in net premiums in the quarter, slightly more than last year's $12.14 billion.
"They may have taken a write down in the same vein as Merrill Lynch did," said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management, which manages $22 billion. "It looks like the new CEO took what I call a kitchen sink quarter," meaning all the bad news was out of the way.
AIG shares fell 7.7 percent in after-market trading to $26.84. The shares closed down 2.68 percent at $29.09 in the regular session on the New York Stock Exchange.
LIFE AND OTHER BUSINESS
Income from life insurance and retirement services fell 10 percent to $2.6 billion.
Premiums, deposits and other revenue were $25.55 billion, up 16.4 percent compared to a year ago. The company said they were favourably affected by foreign exchange.
AIG also has lending units, an asset management division and aircraft leasing.
Its financial services business reported a $5.88 billion loss for the quarter. But operating income for aircraft leasing, long one of AIG's most profitable units, rose 85.3 percent to $352 million compared to a year ago. The company said that was due to a larger fleet, higher lease rates, lower interest rates and more aircraft sales.
Consumer finance, a division that offered home mortgages, posted a $22 million operating loss compared to $58 million in operating income last year.
Equity research analyst Bill Fitzpatrick at Optique Capital in Milwaukee, Wisconsin, said the credit swap losses were "a little higher than we would have hoped for," but he said he expected AIG to benefit as market conditions improve.
"The thesis remains the same that these portfolios will ultimately be marked up," Fitzpatrick said.
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Freddie Mac's rising losses bode ill for US housing crisis
AFP
By Veronica Smith AFP - Thursday, August 7 03:36 am
WASHINGTON, (AFP) - Troubled mortgage finance giant Freddie Mac reported a shocking loss in the second quarter that bodes ill for the US taxpayer after the government's huge rescue package.
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Freddie Mac and twin Fannie Mae, government-chartered, shareholder-owned mortgage firms that underpin roughly half the US housing market, were thrown a federal lifeline a week ago amid the worst housing crisis in decades.
"It has been more than a year since the housing market went on a tumultuous skid. Yet, the hangover from bad lending practices and tighter credit has housing's two primary sponsors, Fannie Mae and Freddie Mac, still unable to step in and fully provide support," said Jeffrey Ham, an analyst at Briefing.com
As their plunging shares raised questions of solvency, the government offered Freddie Mac and Fannie Mae aid that could cost 25 billion dollars in the next two fiscal years, according to the Congressional Budget Office.
"Without the lifeline many fear the two government-sponsored enterprises lacked the capital to absorb losses associated with further deterioration in the housing market," Ham said.
Economists say the housing collapse has not yet hit bottom.
Treasury spokeswoman Brookly McLaughlin reiterated that the Treasury has no plans to use the temporary authorities of the rescue package, which allow the Treasury to buy equity in the two firms to boost their capital.
"We have a responsibility to the taxpayer and to the overall financial system to thoroughly analyze and understand these authorities, should circumstances ever warrant their use," she said, in explaining the Treasury had hired Wall Street investment bank Morgan Stanley for advice.
Freddie Mac reported it had a second-quarter net loss of 821 million dollars, with the loss per share at 1.63 dollars, more than triple most analysts' forecasts of 53 cents per share.
The financial results were severely impacted by a 2.5 billion dollar charge for credit losses from rising delinquencies, foreclosures and falling home prices, it said.
Investors punished the twin firms: Freddie Mac plunged 19.15 percent to 6.50 dollars and Fannie Mae shed 15 percent at 11.56.
Fannie Mae is due to publish its financial results Friday.
Freddie Mac's second-quarter results were worse than the prior quarter, when the firm posted a net loss of 151 million dollars and a 1.2-billion-dollar charge for credit losses.
The company reaffirmed its July commitment to raise 5.5 billion dollars of new capital and suggested it would seek more if needed.
"While we expect continued housing and economic weakness will affect our overall performance this year, we continue to maintain a surplus over all regulatory capital requirements," chairman and chief executive Richard Syron said in a statement.
Freddie Mac also said it wanted to slash its 25-cent dividend in the third quarter by at least 80 percent, subject to approval by the board of directors.
The Federal Home Loan Mortgage Corp., known as Freddie Mac, insisted its "liquidity position remains strong."
Moody's credit agency said it continues to review for possible downgrade Freddie Mac's stock and financial strength ratings.
"As expected, asset quality continues to deteriorate," said Brian Harris, Moody's senior vice president.
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Canadian Natural faces another oil sands overrun
Reuters
Reuters - Thursday, August 7 02:17 am
TORONTO (Reuters) - Canadian Natural Resources said on Wednesday that its Horizon oil sands project faced another cost overrun, adding C$525 million (257 million pounds) from previous estimates, to a new total cost of C$9.27 billion.
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In an evening news release, Canadian Natural said work was taking longer than planned and "delays and schedule slippage" meant commissioning of the plant was being delayed beyond the third quarter.
($1=$1.05 Canadian)
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Dubai buys slice of Cirque du Soleil
AFP
AFP - Thursday, August 7 02:56 am
MONTREAL (AFP) - Cirque du Soleil sold a 20-percent stake in its entertainment dynasty Wednesday to two Dubai firms to fuel its worldwide explosion, starting with a new permanent show in the Middle East.
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Istithmar World, the investment arm of Dubai World, and real estate developer Nakheel paid an undisclosed sum for a 10 percent share each in the circus company, they announced.
Under the terms of the agreement, former street performer Guy Laliberte, 48, will retain control of the circus troupe he founded in 1984 and hold onto its creative reigns.
"Cirque is not sold, and I'm still the captain of the boat," he told a press conference, dispelling rumors he had jumped ship.
Nakheel and Cirque du Soleil will jointly design and build a 1,800-seat theatre on Dubai's Palm Jumeirah island to stage the first Cirque resident show outside of the United States and the Far East.
"Cirque du Soleil marks Istithmar World's first foray into the live entertainment space, which is a key to our media focus," Istithmar chief executive David Jackson said in a statement.
"Besides being a global tourist hub, Dubai is home to one of the fastest growing entertainment and media markets in the world, presenting a huge opportunity for such world-class cultural and entertainment facilities to add to the emirate's rich tourism and leisure offerings."
Cirque's touring show "Quidam" performed in Dubai last year and was said to be "one of the most successful single entertainment projects ever to be staged in the region" with more than 100,000 people attending its month-long run at Nakheel's Ibn Battuta Mall.
A new touring show "Alegria" is scheduled next year as a prelude to the permanent show which is due to open on Palm Jumeirah island in mid-2011.
Meanwhile, Cirque said it will open a show production office, a ticketing company and a set design rental company in Dubai in the coming weeks.
"We have found the right partners in our long-term growth in the form of Dubai World and this marks a watershed moment in our evolution," said Laliberte.
"This partnership is the best of both worlds for me and my management team; we can keep control of our creative challenges and operations while accelerating our growth doing projects all over the world."
Eminent for blending traditional circus acts with dance, music, mime and vivid theatricality, Cirque du Soleil is currently producing 18 shows around the world for 2008, including permanent shows in Macau, Tokyo and Las Vegas.
Its performances attract nearly 10 million spectators each year and rake in ticket and merchandise sales in excess of 700 million US dollars.
The company is estimated to be worth two billion to three billion US dollars, said Laliberte.
Istithmar World has assets under management of six billion dollars, and Nakheel's projects are estimated at a value of 80 billion dollars, according to reports.
Both are controlled by the United Arab Emirates's sovereign wealth fund, which has investments in ports, real estate, financial services and other sectors.
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Fund manager sues son and brother of U.S. Senator Biden
Reuters
Reuters - Wednesday, August 6 11:23 pm
NEW YORK (Reuters) - A Deutsche Bank executive is suing a son and a brother of Delaware Sen. Joe Biden for at least $10 million (5.1 million pounds) over a deal they had to buy into a hedge fund, according to court documents.
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Stephane Farouze, who is global head of fund derivatives for Deutsche Bank and lives in London, claimed that Biden's son Hunter and brother James broke a May 2006 contract and defrauded him after agreeing to buy his membership interests in New York-based Paradigm Companies LLC.
The lawsuit filed in New York State Supreme Court in Manhattan in June names Washington lobbyist Hunter Biden, James Biden, and James's former business partner Anthony Lotito as defendants.
On Wednesday, Farouze's lawyer Marlen Kruzhkov said that the Bidens "never had any intention of carrying out the agreement with my client".
He said the Bidens and their lawyers have not responded to the complaint.
Representatives for the Bidens could not immediately be reached for comment.
The lawsuit said that while the Bidens took control of the company, they never paid Farouze the cash they had agreed to pay.
Sen. Biden is a Delaware Democrat who was first elected to the U.S. Senate in 1972. He has been mentioned as a possible vice presidential candidate on Sen. Barack Obama's presidential ticket.
The lawsuit is the second accusing Biden's relatives of irregularities in their deal to buy hedge fund firm Paradigm. An earlier lawsuit was filed by Lotito in January 2007.
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17:24 GMT, Wednesday, 6 August 2008 18:24 UK
US commander in Lebanon for talks
Gen David Petraeus with President Michel Suleiman
The US commander in Iraq, Gen David Petraeus, has held talks with Lebanese President Michel Suleiman and other leaders on a surprise visit to Beirut.
His talks with army chiefs focused on improving training, logistics and the defence capabilities of Lebanon's army, a statement said.
Gen Petraeus has been appointed to head the US Central Command, overseeing US military operations in the Middle East.
He has accused Lebanon's Hezbollah group of helping Shia militias in Iraq.
The US has sharply increased military aid to Lebanon since the 2006 war between Hezbollah and Israel, giving it $270m in 2007.
Correspondents say the aid is meant to show support to Prime Minister Fouad Siniora's Western-backed government, which is under pressure from the Shia militant Hezbollah and its allies in parliament.
After meeting acting army commander Maj Gen Shawki al-Masri, Gen Petraeus met Mr Siniora for more than an hour. Gen Petraeus is due to take command of Central Command in September.
A long political crisis in Lebanon was eased in May when Mr Siniora formed a new government in which the Hezbollah-led alliance had veto power over cabinet decisions.
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Hurricane leaves 5,500 Khabarovsk residents without electricity
06.08.2008, 14.07
KHABAROVSK, August 6 (Itar-Tass) - A hurricane and thunderstorms in Russia’s Khabarovsk Territory on Tuesday evening and night left without electricity two dozen settlements, ruining houses and infrastructure facilities, an official at the local Emergency Situations Ministry told Itar-Tass on Wednesday.
A lightning struck a transformer substation in the village of Svyatogorye, starting a fire which burnt the facility, and the transformer stations in the village of Grodekovo, Polyotnoye, Zoyevka, Sita and other settlements were put out of order during thunderstorms in the Lazo District.
Gale-force winds ripped off roofs from houses, felled trees and tore up transmission lines, blocking roads.
In the neighboring Vyazemsky district, more than 5,500 residents were left without power supply. The affected villages were Avana, Krasitsky, Kukelyovo, Kapitonovka and others, where 1,200 houses were cut off from electricity.
Pylons collapsed and torn transmission lines were reported in the town of Vyazemsky.
Repair teams were working throughout the night. The rescue effort involves municipal services and Emergency Situations Ministry units.
"Life support facilities are operating according to schedule. The scope of damage is yet to be assessed," the local emergency situations ministry said.
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Russian tourists in Spain fight, bite and run to return home
07.08.2008 Source: Pravda.Ru URL: http://english.pravda.ru/society/stories/106009-russian_tourists-0
A very unpleasant story happened to passengers of Russia’s Ural Airlines at the airport of Barcelona. The holiday-makers currently prepare to file complaints against the airline since many of those who wanted to return back to Russia had to stay in Spain instead.
“We were supposed to depart from Barcelona on July 26 at 18:40 with Ural Airlines. A guide told us before the trip to the airport that the flight had been delayed so we had to arrive to the airport earlier than was previously scheduled,” a passenger of Ural Airlines, Yulia Rakova told the Novy Region news agency. “They told us later that we would be able to depart only at 21:40 because there were some technical problems with the plane,” she added.
The passengers managed to find out that the airline simply canceled the flight because the plane was supposed to carry only 40 people on board. The company apparently decided to save some money.
“There were no representatives of the airline at the airport, no one explained anything to us. We tried to find their office at the airport, but to no avail,” the woman said.
Afterwards, the desperate passengers were told that they would be able to fly at 18:40, albeit on board a smaller plane. It just so happened that about 30 people were destined to stay in Spain.
“They said that they would take those passengers who came to the airport first,” Yulia Rakova said.
“As a result, we started calling Ekaterinburg authorities, the city where we came from. Afterwards, we were told that those 30 people who would not be able to board the plane would return home via Moscow. It goes without saying that no one wanted to fly like this,’ the woman said.
A crowd of Russian tourists rushed to two counters. All the people acted very aggressively.
“When they announced the beginning of registration, a massacre started. Everyone forgot their manners, everyone wanted to fly back home at all costs. The people started swearing. Men were ready to fight. I still have some bruises – someone hit me with a suitcase. The people turned into wild animals. A pregnant woman was punched into her stomach – she cried and went out of the line. The people realized that their future location - Spain or Russia – depended on their ability to fight, bite and swear,” the woman said.
The lucky ones were running to board the Tu-154M jetliner. “I was there among the lucky ones, but we had to spend about two hours sitting in a hot plane. Everyone was on the verge of a nervous breakdown,” Yulia said.
When the plane landed in Ekaterinburg, no one of Ural Airlines apologized to the passengers. They shuffled off the burden to the crew of the Tu-154 plane.
“They provided neither free calls nor hot meals to us - we all had to purchase everything with our own money. Each of us paid about $500 of fuel collection, but they decided to economize on their planes unwilling to send us back home,” the indignant woman exclaimed.
Yulia Rakova does not know what happened to 17 passengers who were forced to stay in Barcelona.
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Estonia torments ethnic Russians with rotten food
06.08.2008 Source: Pravda.Ru URL: http://english.pravda.ru/world/ussr/106004-estonia-0
Another scandal connected with the position of the Russian-speaking population is gathering pace in Estonia (a former republic of the Soviet Union). It turned out that the humanitarian aid, which elderly people of Russian origin receive in the Baltic country, consists of expired food stuffs from Finland. Authorities presumably ship the expired food to the areas where the Russian-speaking population is predominant, the Rossiiskaya Gazeta reports.
Finnish food chain stores S-Kauppa and K-Kauppa sacrificed tons of expired food to humanitarian organizations. The latter delivered bad food to Estonia for social needs.
A spokesman for a Finnish humanitarian organization said that the stores were selling expired food stuffs outside Finland in an effort not to ruin their reputation.
The chairman of the Union of Ethnic Russians in Estonia, Sergei Sergeev, set out a concern about the state of health of many Russians residing in the former Soviet republic. It is an open secret that expired food stuffs may trigger the development of dangerous diseases in the future.
“Such incidents are out of question in the European Union. They should be punished for such manipulations. This situation should become a lesson for the Estonian authorities to learn. They must take the activities of foreign humanitarian organizations under control and watch the distribution of food carefully,” Sergeev said.
The official said that the humanitarian activity in Estonia was organized on a very poor level.
“The delivery of food to the poor looks very humiliating and differs little from the delivery of food somewhere in Iraq , for example. Poor pensioners have to stand in long lines and even fight for a piece of sausage, which went off long ago, as it turns out,” the official said.
Official spokespeople for the areas of Estonia where the Russian population lives vaguely stated that they had never seen any food stuffs delivered from humanitarian organizations of Finland.
In Estonia, most Russians live in Tallinn and the major northeastern cities of Narva and Kohtla-Järve. The rural areas are populated almost entirely by ethnic Estonians, except for some areas in eastern Estonia near Lake Peipus which have a long history of settlement by Russians, including the Old Believers' communities.
After regaining independence in 1991 the restored Republic of Estonia recognised citizenship of everybody who was a citizen prior to the Soviet occupation of 1940 or descended from such a citizen (including the long-term Russian settlers from earlier influxes, such as those around Mustvee near Lake Peipus), but did not grant any new citizenships automatically. This affected people who had arrived in the country after 1940, the majority of whom were ethnic Russians. Knowledge of Estonian language and history were set as conditions for naturalization.
According to the Estonian Statistical Office[citation needed], ethnic Russians comprised 25.7% of the population in 2006. Of that 25.7%, approximately 27% hold Russian citizenship, 35% hold Estonian citizenship, and 35% continue to have undefined citizenship.
Under Estonian law, residents without citizenship may not vote in elections of Riigikogu (the national parliament) or European Parliament elections, but are eligible to vote in local (municipal) elections.
The perceived difficulty of the initial language tests necessary for naturalisation became a point of international contention, as the government of Russian Federation, the European Union, and a number of human rights organizations objected on the grounds that they made it hard for many Russians who had not learned the local language to gain Estonian citizenship in the short term. As a result, the tests were somewhat altered and the number of stateless persons has steadily decreased. According to Estonian officials, in 1992, 32% of residents lacked any form of citizenship. In July 2007, the Population Registry of the Estonian Ministry of the Interior reported that 8.5% of Estonia's residents have undefined citizenship and 7.8% have foreign citizenship.
Estonia does not tax income spent on education (including lessons of Estonian language) given by accredited schools. Furthermore, the laws provide for reimbursement of money spent on Estonian language lessons upon passing the language test to be taken for naturalisation. The rate of reimbursement is set by an executive order; as of May 2007, it is 100%.
Russia being a successor state to the Soviet Union, all former USSR citizens qualified for natural-born citizenship of Russian Federation, available upon mere request, as provided by the law “On the RSFSR Citizenship” in force up to end of 2000.
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今年の夏休み 「自宅でゆっくり」３年連続トップ ガソリン価格高騰影響
FujiSankei Business i. 2008/8/7
■明治安田生命調査
明治安田生命保険は６日、お盆の帰省シーズンを前に、今年の夏休みの過ごし方に関するアンケート調査（複数回答）を行った。最も多かったのは「自宅でゆっくり」で、全体の７３・５％。２００６年の調査開始以来、３年連続で堂々のトップに。特に今夏は、前年比で１３・３ポイントの大幅増となっており、やはり、ガソリン価格の高騰が“自宅志向”が一層促しているようだ。
「自宅でゆっくり」を選んだ人に理由を聞いたところ、「出費がかさむので」が前年比で１６・６ポイント増の４５・２％だった。「ガソリン価格の高騰が夏休みの計画に影響したか」という質問には、５３・９％が「影響した」と回答。具体的な影響については、「おみやげ代や交通費以外の費用を節約した」（２８・％）が最多。次いで多かったのが、「予定をとりやめた」（２６・９％）で、４人に１人が旅行などの計画を断念したようだ。
アンケートは明治安田生命が実施。インターネットで１２１９人から回答を得た。
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佐賀県、組長に国有地内の建物からの退去勧告書手渡す
佐賀市の国有地内の建物を指定暴力団の系列組長が所有し、組事務所として使用している問題で、土地を管理する佐賀県の担当者が７日、組事務所を訪れ、組長に退去勧告書を手渡した。２か月後の１０月７日夕までに自主的に立ち退くよう促す内容で、今月２１日までの回答を求めた。回答がない場合、土地の占用許可を取り消すとしている。
訪問した遠田勝美・県佐賀土木事務所長によると、組長は「第三者に建物を転売するのは難しいのでは。県で購入してもらえないか」と要請、占用許可を取り消す法的な根拠を文書で示すことも求めた。
国有地は１級河川の河川敷。戦後、引き揚げ者が住みついたことから、県は例外的に占用を認めてきた。事務所は鉄骨３階建て約１７０平方メートルで、競売や転売を経て２００２年２月から組長が所有している。
県は昨年６月、匿名の通報で建物が組事務所として使われている実態を把握。退去させる法的根拠がないとしていたが、近隣住民の批判を受けて再検討、組事務所としての使用が河川の公共利用を定めた河川法に違反すると判断した。
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作権協会（JASRAC）に反論した。
同社はこれまで、JASRACと3回にわたって文書でやりとりしてきたという。今崎社長は「平和的な解決を望んでいたが、抑圧的に突然提訴という決断をされたことは大変残念」とコメント。裁判の判決は「今後のインターネット著作権を考える上で非常に重要な判例になると考えている」とし、法廷で争う構えだ。
「削除要請あればすぐに削除してきた」
JASRACは6日、管理楽曲の著作権が侵害されたとして、同社に対し、約1億2800万円の損害賠償と、JASRAC管理楽曲の利用禁止を求めて6日に提訴した（JASRAC、動画共有サイト「TVブレイク」提訴 1億2800万円賠償求める）。
JASRACのプレスリリースには「昨年6月以降、同社に対して、サイト上のJASRAC管理著作物を含む権利侵害の投稿を防止するため具体的な対策を講じ、権利侵害動画の配信を停止するよう要請してきたが、同社は、サイト上で発生する著作権侵害について責任を負わないと主張して要請を拒否し、何ら対策もとらずに現在も事業を継続している」と書かれている。
今崎社長このリリースに反論。「当社はプロバイダー責任制限法（ISP法）に基づいて適切に運営してきており、権利者から削除依頼があれば、即座に削除してきた。多い時には1度に50～100の動画を削除したこともある」と話す。ただJASRACからの削除要請は「2年前に数回あり、その時はすぐ削除した。その後は要請が来ていない」とする。
JASRACとはこれまでに3回、文書でやりとりし、動画共有サイトでの包括利用許諾条件（収入の1.875％をJASRACに支払う）受け入れなどについて前向きに検討してきたが、合意に至らなかったという。JASRACは契約の前提として、動画が送信可能になる前にシステムで監視する体制を求めてきたというが、「当社にはそのような技術も人的リソースもない。この要請は非現実的で受け入れられない」と今崎社長は話す。
「平和的な解決を望んでいたが、抑圧的に突然、提訴という決断をされたことは大変残念」――今崎社長はこうコメント。「今後のインターネット著作権を考える上で非常に重要な判例になると考えており、法廷で明らかにしていく」と話している。
パンドラTVは06年2月にスタートした動画共有サイト。「誰もが自分の放送局を持って情報発信できるようにしたい」という思いで作ったという。
「当初から著作権関連の問題が起きる可能性を想定し、弁護士とも契約した上で国内にサーバを置いて運営を始めた。ネット上の著作権のあり方にも疑問を持っており、一石を投じるサービスにしたかった」と今崎社長は話している。
JASRACの話 食い違う主張
JASRAC広報部は「同社に対してこれまでに3回、文書で、JASRAC管理楽曲の配信停止を求めてきた。最初の1回は、JASRACの管理楽曲リスト（一般的なリストで、TVブレイク上の侵害動画を指定したものではない）をCD-ROMで送ったが、同社からは代理人の弁護士名で『当社はISP 法に則って運営しており、サイト上で発生する著作権侵害について責任を負わない。責任があったとしても物理的に対応できない』と回答があった」と話している。
JASRACは「管理楽曲の権利を侵害した動画全般について、削除や未然の投稿防止を含む対策を要請したが、対応がなかった」と主張している一方で、同社は「権利を侵害した動画を具体的に指定した削除依頼は来ていない。そういった依頼ならすぐに削除している」と反論しているところに、主張の食い違いがあるようだ。
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Trichet Focuses on Inflation as Lufthansa Lifts Wages (Update3)
By Simon Kennedy and Bernd Bergmann
Enlarge Image/Details
Aug. 7 (Bloomberg) -- Robert Revet, a flight manager for Deutsche Lufthansa AG, just won a 5.1 percent raise from the German airline after spending last week out on strike.
``With a bit of luck, this pay increase will help us keep up with inflation, at least for a while,'' Revet, 56, said as he returned to work at Frankfurt airport on Aug. 1. ``With inflation where it is, we wanted a significantly better deal this time.''
Revet's satisfaction won't be shared by European Central Bank President Jean-Claude Trichet, who economists predict will leave the benchmark interest rate at 4.25 percent today. Pay deals like the one at Lufthansa may force him to keep rates at a seven-year high for longer or even tighten again to contain inflation, raising the risk of a deeper economic slump in the 15-nation euro region.
``This is an inflation-busting wage raise that will worry the ECB,'' said David Owen, chief economist at Dresdner Kleinwort in London, who expects the central bank to lift rates next month. ``Trichet will stay on alert in warning about wage inflation.''
Policy makers say they're concerned a wage-price spiral will develop as the higher cost of living prompts workers to seek more pay and companies raise prices to compensate.
Record oil and food costs pushed euro-region inflation to 4.1 percent in July, the fastest in more than 16 years and double the ECB's 2 percent limit.
Economic Slump
At the same time, the economy is faltering. Societe Generale SA economists estimate gross domestic product shrank 0.5 percent in the second quarter from the first. By contrast, the U.S. economy expanded 0.5 percent in the three months through June.
The Frankfurt-based ECB, which increased borrowing costs last month, publishes today's decision at 1:45 p.m. and Trichet holds a press conference 45 minutes later. Separately, the Bank of England will leave its key rate at 5 percent, another survey of economists shows. That decision is due at noon in London.
The Lufthansa settlement ``was definitely not good for the economy,'' former ECB chief economist Otmar Issing said in an interview with Stern magazine published on its Web site today. ``Staff should share in companies' profits but through one-off payments, not permanent wage increases that permanently raise company costs.''
Lufthansa employees aren't alone in securing inflationary pay deals in Germany, Europe's largest economy. Negotiated wages jumped 3.5 percent in the year through April, the biggest gain in 12 years, as companies such as BASF AG and ThyssenKrupp AG bowed to union demands.
3.2 Million
This year's wage rounds culminate next month, when IG Metall, Germany's biggest union, starts talks for 3.2 million metal, electronics and car workers whose collective contracts expire Oct. 31. The union won a 5.2 percent raise for about 85,000 steelworkers in February.
Pay packets are also growing in economies which, unlike Germany, haven't spent recent years containing labor costs and boosting productivity. Wage inflation in Italy accelerated to 3.6 percent in June, the fastest in three years.
In a bid to restrain inflation expectations and persuade workers that the current price shock will pass, the ECB lifted its benchmark rate by a quarter point on July 3. The U.S. Federal Reserve this week left its key rate at 2 percent.
ECB council member Klaus Liebscher signaled there may be a need for still higher borrowing costs in Europe, saying in a July 24 interview that ``we haven't exhausted our room for maneuver'' even as economic growth slows.
Wage Indexation
Adding to the ECB's concerns is the fact that seven European countries index wages to inflation, a policy Trichet has labeled ``extremely dangerous.'' In Belgium, Cyprus and Luxembourg, wages are automatically adjusted for past consumer-price increases, while Spain, France, Malta and Slovenia also have some form of indexation, according to the ECB.
``The ECB will continue to see a worrying trend in wage growth,'' said Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland Group Plc in London. ``This is likely to remain the central bank's dominant worry and will probably push it to raise rates again despite signs that downside risks to the economy are materializing.''
Europeans' confidence in the outlook for the economy dropped the most since the Sept. 11 terrorist attacks last month and unemployment rose for the first time in three years in May, reports showed last week. Barclays Capital estimates the economy contracted in the second quarter and will stagnate in the third after growing 0.7 percent in the first three months of the year.
The European Union's statistics office will release second- quarter GDP figures on Aug. 14.
50-50 Chance
Slowing growth will ``probably prevent firms from passing much of these wage increases on to consumers,'' said Holger Schmieding, chief economist at Bank of America Corp., who still expects the ECB to keep rates unchanged for a year. ``Wages are a concern for the ECB, but will be outweighed by rising recession risks.''
Ken Wattret, an economist at BNP Paribas SA in London, said there's a 50-50 chance the ECB will increase rates again, although its room to do so will narrow as the economy splutters. ``How wage developments evolve will be crucial to the evolution of monetary policy,'' said Wattret.
That means the likes of Lufthansa's Revet may ultimately decide the direction of interest rates.
``If the workers keep demanding higher wages, the ECB has no choice but to raise rates,'' said Michael Schubert, an economist at Commerzbank AG in Frankfurt. ``The ECB doesn't want to be blamed for cooling the economy, but it will do so to beat inflation.''
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Bank of New York Battles Dershowitz-Backed Russia in RICO Trial
By Sree Vidya Bhaktavatsalam
Aug. 7 (Bloomberg) -- Bank of New York Corp. paid $14 million three years ago to settle U.S. criminal allegations that an employee conspired to illicitly transfer money out of Russia. Now, officials in Moscow want their cut -- $22.5 billion in damages for alleged money-laundering.
In a case instigated by a Florida attorney who made his name filing personal-injury lawsuits against airlines, Russia is going after the company, now called Bank of New York Mellon Corp., using a civil variant of the U.S. anti-racketeering law conceived to put mobsters behind bars. It's the first time a government other than the U.S. has tried to use the Racketeer Influenced and Corrupt Organizations Act, better known as RICO.
The legal fight unfolding in the Russian capital is more than a courtroom oddity featuring testimony for the plaintiff by Harvard law professor Alan Dershowitz and G. Robert Blakey, the principal author of the RICO statute. The case is spooking shareholders when Chief Executive Officer Robert Kelly hoped to reap the benefits of last year's merger of Bank of New York and Mellon Financial Corp. The deal created the world's biggest custody bank, safeguarding $23 trillion for investors.
``Everyone has a wink and a nudge, but no one will say in a court that a Russian courtroom is corrupt,'' said James Ellman, president of San Francisco-based SeaCliff Capital LLC, which oversees $200 million and holds BNY Mellon shares. ``Russia would like to know that when it says jump, a Western company jumps.''
Under Pressure
Dershowitz disagreed, saying the situation in a Russian courtroom is ``far different from the bad old days'' of the 1970s and 1980s.
``Every legal system has its flaws,'' he said in an interview yesterday. ``Who are we to cast aspersions on a country's legal system?''
BNY Mellon challenged the right of Russia's Federal Customs Service to bring the case under U.S. law, and said any judgment would be unenforceable. Still, investors are concerned that a ruling against the company -- with maximum damages equal to 79 percent of shareholder equity -- will punish the stock and distract management during years of appeals. Its market value has dropped 22 percent this year, more than twice the decline of State Street Corp., the Boston-based custody bank.
``The bank has done a superb job in constructing a global business model, but if the Russians are successful, they'll create real disarray,'' said Dick Bove, an analyst at Ladenburg Thalmann & Co. in Lutz, Florida, who cut his rating on the shares to ``neutral'' from ``buy'' because of the suit.
Public Relations Campaign
The Russian customs service sued BNY Mellon in May 2007, alleging that it illegally helped wire more than $7 billion out of the country during the 1990s. Leading the Russian legal team is 47-year-old Steven C. Marks, an attorney with Miami-based Podhurst Orseck P.A. who has worked with the Russian government for the past decade on cases including tobacco litigation.
His firm pitched the money-laundering case against BNY Mellon to Russian authorities. It has hosted conference calls to promote the merits of Russia's claims and issued a press release when Bove wrote in March that U.S. and European Union courts may enforce any ruling made in Russia.
Marks has declined to disclose the percentage of the judgment his firm stands to collect as fees if it wins the lawsuit, drawing criticism from analysts at JPMorgan Chase & Co. in New York.
A team led by Vivek Juneja wrote in a July 16 note to clients that ``misstatements,'' inconsistencies and lack of disclosure about fee arrangements by the trial attorneys were troubling.
``We would hope legal authorities and agencies would look into what is really going on in this lawsuit,'' the JPMorgan analysts wrote.
Merger Benefits
Marks said any criticism of his or Russia's motives is ``inappropriate.''
``The analysts have a financial interest in this institution,'' Marks said in an interview.
Bank of New York, founded by Alexander Hamilton in 1784, acquired Mellon last year for $18.3 billion, nine months after swapping its 338 retail branches for JPMorgan Chase's corporate- trust business. As a custody bank, it keeps records, lends securities and handles administrative duties for institutions such as mutual funds and hedge funds.
The merger also expanded BNY Mellon's asset-management unit, which oversees $1.1 trillion, a sixfold increase from before the transaction. Profit excluding merger and other costs rose 61 percent to $2.49 billion last year as revenue climbed 66 percent.
Russian Émigré
Kelly, the former Mellon CEO who took over the combined company on July 2, 2007, declined to comment on the lawsuit beyond what he has already said in conference calls and statements.
``There are substantial well-established laws in place to protect our assets around the world,'' Kelly, 54, said on a July 17 conference call with analysts. ``We're really confident an adverse decision would not be enforceable in the U.S.'' or any country where the bank has substantial assets.
Russia's allegations center around the activities of Lucy Edwards, a former Bank of New York vice president in London, and her husband Peter Berlin, who ran companies with accounts at the bank. Their actions date back to the late 1990s.
Edwards, a Russian émigré, and Berlin told U.S. officials in 2000 that they conspired to use the bank to move money out of Russia. They were sentenced to five years' probation. BNY Mellon said it failed to properly monitor suspicious transactions. In 2005, it settled with federal prosecutors in New York to end their probes.
Importing RICO
Dershowitz, 69, said that BNY Mellon ``got away in the U.S. with a slap on the wrist'' and that that Russia is entitled to triple damages under the U.S. RICO law. Marks said a judgment against BNY Mellon can be enforced in 90 countries, raising the specter of asset seizures.
Russia's legal team makes two main claims in bringing its lawsuit in Moscow. First, backed by Blakey, the author of the 1970 RICO law, they said Congress didn't limit the use of the statute to the U.S. Second, BNY Mellon itself argued that Russia was the proper venue to bring a RICO claim in a 2001 case stemming from the improper transfers by Edwards, Marks's team said.
BNY Mellon disputed both the claims. In the 2001 case cited by Russian authorities, Pavlov vs. Bank of New York Co., the bank actually supported the position that a U.S. RICO claim can't be brought in Russia, said Jonathan Schiller, the lead counsel for BNY Mellon, in an interview.
The parts of the case that the court ruled as more appropriate to move to a Russian court were those brought by Russian depositors in a defunct Russian bank and were unrelated to RICO, Schiller said.
No Wrongdoing Admitted
In addition, BNY Mellon cited U.S. Supreme Court decisions to argue that a precursor crime must be demonstrated to apply RICO and that it has never been charged with or admitted to criminal wrongdoing.
BNY Mellon didn't ``admit to any criminal culpability,'' said Schiller, co-founder and managing partner of Boies, Schiller and Flexner LLP.
The bank, backed by testimony from 22 legal experts including former U.S. Attorney General Dick Thornburgh, 76, filed a motion to dismiss the lawsuit because Moscow's Arbitration Court lacks the jurisdiction to hear the dispute.
Hearings were halted after Blakey, 72, fell ill on the stand under cross-examination by BNY Mellon attorneys in July and didn't attend a scheduled resumption on Aug. 4. The court, considering BNY Mellon's motion to dismiss the lawsuit, has set an Oct. 6 court date to continue hearings.
Appeals Process
Should BNY Mellon be denied its motion to dismiss the lawsuit, it could appeal in three additional levels of the Moscow court system. If those courts also deny BNY Mellon's motions to dismiss the lawsuit, hearings into the actual merits of the case will begin. It could take months, if not years, for there to be a resolution.
``Over time, the longer this stretches out, the longer this will drag on shares,'' Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine, said. ``The stock market does not like uncertainty, and the sooner they can resolve it the better.''
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August 7, 2008
Monsanto Looks to Sell Dairy Hormone Business
By ANDREW MARTIN and ANDREW POLLACK
After struggling to gain consumer acceptance, Monsanto on Wednesday announced that it would try to sell its business of producing an artificial growth hormone for dairy cows. The company will focus instead on its thriving business of selling seeds and developing ways to improve crops.
The decision comes as more retailers, saying they are responding to consumer demand, are selling dairy products from cows not treated with the artificial hormone.
Wal-Mart, Kroger and Publix are among the retailers that now sell house-brand milk from untreated cows. Almost all of the fresh milk sold by Dean Foods, the nation’s largest milk bottler, also comes from cows that were not treated with the artificial hormone, a spokeswoman said.
Monsanto officials said the decision was not related to the retail trend and that business for the artificial hormone, sold under the brand name Posilac, remained brisk. Monsanto, which is based in St. Louis and is the only commercial manufacturer of the hormone, declined to provide sales numbers.
Selling Posilac “will allow Monsanto to focus on the growth of its core seeds and traits business while ensuring that loyal dairy farmers continue to receive the value of Posilac in their operations,” Carl Casale, Monsanto’s executive vice president for strategy and operations, said in a statement.
The growth hormone, approved by the Food and Drug Administration in 1993, was one of the first applications of genetic engineering used in food production. When the artificial hormone, which is made in genetically modified bacteria, is injected into cows, it increases milk production by about a gallon a day. A 2007 survey by the Department of Agriculture said 17 percent of the nation’s dairy cows were receiving it.
Despite the government’s approval, many advocacy groups have long maintained that Posilac is bad for the health of cows. Some even claim it could pose a cancer risk in people, though little scientific evidence has emerged to support that view. Their concerns have been fueled by the refusal of many countries, including Canada and members of the European Union, to permit the use of the hormone.
“I think they saw the handwriting on the wall and gave up,” said Andrew Kimbrell, executive director of the Center for Food Safety, a consumer advocacy group based in Washington. “It’s a major victory for consumers.”
Mr. Kimbrell said the original idea of marketing a growth hormone for milk production was flawed because milk is so emblematic of childhood. Fear of the effects of the artificial hormone was one of the primary drivers behind the growth of the organic dairy industry, he said.
But Elena Gonser, a dairy farmer in Everson, Wash., contended that consumers had been misled by misinformation. She added that Posilac, which is also known as bovine somatotropin or BST, was safe and effective.
“I believe it’s just catering to ignorance to tell people it’s BST-free, and it’s better for you,” said Ms. Gonser, who along with her husband runs a farm that has 70 cows.
But she added: “I’m not surprised to find they want to step back from it. It’s gotten a bad rap for so long.”
Monsanto’s announcement comes after a year of pitched battles over labeling on dairy packages. A year ago, Monsanto tried unsuccessfully to persuade federal officials to crack down on labels that say the milk has been produced without the hormone, arguing that milk from treated cows was the same as that from untreated cows.
In the months since, a Monsanto-backed advocacy group and a handful of dairy organizations have struggled to have similar laws or regulations passed at the state level. In Pennsylvania, for instance, the secretary of agriculture banned the labels, only to have his order overturned by the governor amid a consumer uproar.
Monsanto will continue to sell and market the product until a buyer is found, said Christie Chavis, who leads commercial development and strategy for the company’s animal agriculture business unit. Posilac is sold in 20 countries.
Ms. Chavis said that the artificial hormone was safe and also good for the environment, saying that it takes fewer cows and less resources to produce the same volume of milk.
Jim Werkhoven, a dairy farmer in Monroe, Wash., said he was disappointed when he learned of the move on Wednesday from a Monsanto industrial relations executive.
“I certainly understand from a business perspective why they may be doing this,” he said. “At the end of the day, the customer is going to be the one that sets the rules, and at the end of the day, it’s going to be the customer that pays the price.”
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インドで代理出産の赤ちゃん、夫婦離婚し帰国困難に
2008年8月7日23時37分
日本人夫婦が、代理出産が認められているインドに渡航し、契約を結んだインド人代理母から女の赤ちゃんを得たが、帰国が難しくなっていることが７日わかった。出産前に夫婦が離婚をしており、赤ちゃんがパスポートの取得ができずにいるためだ。このトラブルを現地や海外のメディアが報じている。
代理出産については、日本学術会議が、日本人夫婦による海外での代理出産には子どもの福祉からも、代理母の福祉からも問題があると指摘。今年４月に国内での実施も含め、代理出産の原則禁止をうたった報告書をまとめている。
現在、赤ちゃんがいる西部ジャイプールの病院などによると、愛媛県の４０代の男性医師と妻はインド人女性と代理出産契約を結び、インドの不妊治療クリニックから第三者の卵子提供を受けて７月２５日に女児が生まれた。夫婦は子どもが誕生する前の６月に離婚しており、元妻は女児の引き取りを拒否しているという。
男性医師は赤ちゃんを引き取る意向で、女児はインドのパスポートを取得する方向で検討を始めた。女児は、男性の母親が現地で世話をしているという。
男性医師によると、すでに代理母を母とする出生届をもらっている。日本大使館からインドでの養子縁組を求められたが、養子縁組を求める自分の名が出生届の父親欄にあるため、養子縁組は難しいと現地で言われたという。
さらに、養子縁組については、インドでは独身男性は女子を養子にむかえられないという。ただ、病院側は「生物学的な父親なので、本来は養子縁組をする必要はない。インドで生まれたので、市民権を得て、インドのパスポートを取れるはず」と話す。
インドでは０４年に代理出産が認められ、海外からの依頼が急増していると言われる。代理母には多額の報酬が支払われる。経済的理由で貧しい女性が引き受ける場合が多いなどと問題視する声もある。
女児の場合、かりにインドの市民権、パスポートを得て出国できても、すぐに日本国籍が得られるわけではない。インド人の代理母を母とする出生届を日本で出すだけでなく、父親が認知のための裁判手続きもする必要があるとみられる。
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３０人に１人 親が外国人 ０６年 日本生まれの子 厚労省調査 過去最高に
2008年8月4日 朝刊
二〇〇六年に国内で生まれた赤ちゃん約百十万人のうち、親の少なくとも一方が外国籍の子が三万五千六百五十一人で、新生児の３・２％、ほぼ三十人に一人の割合に上ることが、厚生労働省の調査で分かった。
同年に国内で結婚し、婚姻届を出したカップルのうち、一人または両方が外国人の組み合わせは６・６％で約十五組に一組。いずれの数字も増加傾向にあり、過去十年で最高。在日外国人の定着と日本社会の国際化を裏付けている。
「人口動態統計」と同「特殊報告」によると、〇六年に出生した赤ちゃんのうち「父親が外国人」が約一万九千人、「母親が外国人」は約二万六千人。これらのうち「両親とも外国人」は約九千人。
父の外国籍で多いのは韓国・朝鮮（四千三百人）、中国（三千五百人）、ブラジル（二千四百人）の順。母は中国（六千八百人）、フィリピン（六千三百人）、韓国・朝鮮（四千四百人）となっている。フィリピン人とタイ人の母親は夫が日本人の割合が特に高く、それぞれ８０％、７９％を占める。
国籍法の規定で、出生時に父母のいずれかが日本人ならば子は日本国籍を取得できる。
一方、同年の結婚中６・６％を占める約四万九千組は少なくとも片方が外国籍。東京二十三区、大阪市、名古屋市で１０％を超えた。
夫が日本人、妻が外国人という組み合わせが約三万六千組と圧倒的に多く、うち妻の国籍は中国、フィリピンがそれぞれ三分の一。六分の一が韓国・朝鮮で、以下タイ、ブラジル、米国と続く。
親が外国人の赤ちゃんが出生数に占める割合を都道府県別にみるとトップは東京の５・７％。次いで愛知４・９％、三重４・５％の順。
結婚の少なくとも一方が外国人という割合は、東京と山梨の９・９％が最高で愛知と群馬の９・４％が続いた。
＜在日外国人＞ 日本に外国人登録している人の数は法務省の年末ベースの統計で１９６０年約６５万人、７０年約７０万人だったが、バブル経済期の９０年に１０８万人、昨年は約２１５万人に達した。国籍で最も多いのは中国の２８・２％で７０年代から増加を続け、昨年初めて韓国・朝鮮（２７・６％）を抜いた。以下ブラジル、フィリピン、ペルー、米国と続く。外国人登録をするのは日本で就労、勉学などの目的で生活する人たちで、観光など短期滞在目的の入国の場合の多くは登録しない。一方、不法滞在者数は今年１月の推計値で約１５万人。９３年以降減少を続けている。
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