F1 faces split as eight teams break away

F1 faces split as eight teams break away

By Roger Blitz

Published: June 19 2009 08:32 | Last updated: June 19 2009 09:43

Formula One was plunged into its worst crisis in its 60-year history on Friday after eight teams announced they would set up a rival championship, saying Max Mosley, the head of motorsport’s regulator, had ignored their demands over his controversial budget cap plans and had tried to drive a wedge between them.

The dramatic decision, announced in a lengthy statement from the Formula One Teams Association (Fota) came on the eve of practice for Sunday’s British Grand Prix and a deadline for entries for next year’s championship.

Mr Mosley, president of the Fédération Internationale de l’Automobile, demanded a £40m budget cap on teams to prevent what he called a ”financial arms race”. But the plan, which involved two sets of regulations for teams, depending on whether they spent above or below the budget cap, threatened the business models of leading teams such as Ferrari and McLaren.

Formula One money

In its statement, Fota said it had ”genuinely sought compromise” with the FIA and Bernie Ecclestone, F1’s commercial supremo, against a backdrop of a ”campaign to divide” the Fota members.

”It has become clear, however, the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship,” Fota said.

Its rival championship would have ”transparent governance” and a single set of regulations, as well as offer ticket prices lower than those in F1.

Fota claimed its series would attract ”the major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport”.

Though many in the sport have reservations about the ability of the teams to run a rival series, few would question how entrenched the positions of the two sides have become.

The negotiations have been plagued by a series of leaks of correspondence between Fota and the FIA and rows over whether or not the teams were already legally committed to next year’s championship.

Fota’s members are Brawn GP, Ferrari, McLaren, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso. Williams and Force India were thrown out of Fota after they signed unconditional terms with the FIA.

Three new teams will join F1 next year, though several more will now look to fill the gaps left by the Fota members if they follow through with their breakaway plans.

FIA said the deadline for 2010 entries expired on Friday evening and the list for next season would be announced on Saturday.

”We are disappointed but not surprised by Fota’s inability to reach a compromise in the best interests of the sport,” the FIA said in response.

”It is clear that elements within Fota have sought this outcome throughout the prolonged period of negotiation and have not engaged in the discussions in good faith.

“The FIA cannot permit a financial arms race in the championship nor can the FIA allow Fota to dictate the rules of Formula One.”

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Switzerland looks at cutting size of banks

By Jennifer Hughes and Patrick Jenkins in London and Tony Barber and George Parker in Brussels

Published: June 18 2009 13:31 | Last updated: June 19 2009 08:59

Switzerland upped the ante in a global regulatory assault on the banking industry on Thursday as its central bank warned that Zurich was examining the forced shrinkage of banking groups such as UBS and Credit Suisse to contain the risks posed by their size.

The central bank is looking at imposing constraints on the size of its biggest domestic banks unless global policymakers can come up with a new system to deal with large banks when they fail.

Philipp Hildebrand, vice-chairman of the Swiss National Bank, said: “There can be no more taboos, given our experiences of the last two years.”

“There are advantages to size . . . [but] in the case of the large international banks, the empirical evidence would seem to suggest that these institutions have long exceeded the size needed to make full use of these advantages,” Mr Hildebrand said as the central bank unveiled its stability report.

UBS and Credit Suisse prompted alarm among authorities about the risks their size posed to the Swiss economy when they reported heavy losses as a result of the financial crisis. Last year, their collective assets were equivalent to six times Swiss GDP.

The central bank envisaged “direct and indirect measures to limit [large banks’] size,” said Mr Hildebrand.

His comments on Thursday caused unease among Swiss banks, which said that the SNB did not have direct responsibility over banking regulation and therefore lacked powers to implement any such controls.

“This is strong language,” said one bank executive. “But the SNB doesn’t have a direct say in the regulation of the banks.” Another said Mr Hildebrand’s comments were “little more than sabre-rattling”.

However, the remarks will be scrutinised by policymakers and investors on both sides of the Atlantic. They come as central bankers and regulators around the world are ratcheting up language on banking reform.

Mr Hildebrand called for regulators to work together to develop an international process for the orderly wind-down of a broken bank. But he warned that, if that process could not be designed in a “reasonable” time frame, then more direct measures should be examined.

He did not spell out exactly how he wished to curb banks’ size. However, the ideas being looked at involve crude limits on the absolute size of balance sheets or discouraging growth into risky areas by raising capital requirements.

On Wednesday, the governor of the Bank of England Mervyn King fired a warning shot across the bows of the industry, pointing out that regulators could not tolerate a situation where numerous banks were deemed “too big to fail.” And the debate could intensify in Washington in the coming weeks, since politicians are due to start debating a series of reform measures that the Obama administration hopes to implement to clean up the banks.

In Brussels on Thursday, the European Union’s 27 member states were poised to approve plans to strengthen financial supervision in Europe amid British reservations about yielding certain national powers to EU authorities.

Gordon Brown, UK prime minister, on Thursday night secured a guarantee from EU leaders that the new supervisory system would not include powers to force national governments to bail out banks. Diplomats said the summit communiqué would say that any EU-level decision would “not impinge in any way on the fiscal responsibilities of the member states”.

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Mafia blamed for $134bn fake Treasury bills

By FT reporters

Published: June 18 2009 19:52 | Last updated: June 18 2009 19:52

One summer afternoon, two “Japanese” men in their 50s on a slow train from Italy to Switzerland said they had nothing to declare at the frontier point of Chiasso.

But in a false bottom of one of their suitcases, Italian customs officers and ministry of finance police discovered a staggering $134bn (€97bn, £82bn) in US Treasury bills.

Whether the men are really Japanese, as their passports declare, is unclear but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia.

Few details have been revealed beyond a June 4 statement by the Italian finance police announcing the seizure of 249 US Treasury bills, each of $500m, and 10 “Kennedy” bonds, used as intergovernment payments, of $1bn each. The men were apparently tailed by the Italian authorities.

The mystery deepened on Thursday as an Italian blog quoted Colonel Rodolfo Mecarelli of the Como provincial finance police as saying the two men had been released. The colonel and police headquarters in Rome both declined to respond to questions from the Financial Times.

“They are all fraudulent, it’s obvious. We don’t even have paper securities outstanding for that value,’’ said Mckayla Braden, senior adviser for public affairs at the Bureau of Public Debt at the US Treasury department. “This type of scam has been going on for years.’’

The Treasury has not issued physical Treasury bonds since the 1980s – they are handled electronically – though they still issue savings bonds in paper format.

In Washington a US Secret Service official said the agency, which is working with the Italian authorities, believed the bonds were fake.

Officials in Tokyo were nonplussed. Takeshi Akamatsu, a Japanese foreign ministry press secretary, said Italian authorities had confirmed that two men carrying Japanese passports had been questioned in the bond case but Tokyo had not been informed of their names or whereabouts.

“We don’t know where they are now,” Mr Akamatsu said.

Italian officials, while pointing out that hauls of counterfeit money and Treasury bills were not unusual, were stunned by the amount involved. Investigators are looking into the origin and destination of the fakes.

Italian prosecutors revealed last month that they had cracked a $1bn bond scam run by the Sicilian Mafia, with the alleged aid of corrupt officials in Venezuela’s central bank. Twenty people were arrested in four countries.

The fake bonds were to have been used as collateral to open credit lines with banks, Reuters news agency reported. The Venezuelan central bank denied the accusations.

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Half Italian banks face ratings cut

By Vincent Boland

Published: June 19 2009 03:00 | Last updated: June 19 2009 03:00

The credit ratings of nearly half of Italy's banks and financial institutions could be cut as the country's steep recession bites into profits and companies find it harder to service their debts.

Moody's Investors Service said yesterday it could downgrade the financial strength ratings of 21 banks and financial institutions, though the impact would in most cases be limited to one "notch" in its tier of creditworthiness ratings.

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Ecuador default could set precedent

By Naomi Mapstone in Lima

Published: June 9 2009 18:24 | Last updated: June 9 2009 18:24

Ecuador is expected to announce this week that 95 per cent of the holders of $3.2bn of defaulted debt are willing to accept an offer of 35 cents on the dollar, in a move that could set a precedent for emerging market sovereign bond holders.

Analysts fear that the government’s deliberate default on two bonds – almost a third of its foreign debt – could prompt other countries to follow suit as they seek to navigate the financial crisis.

Though Ecuador has the capacity to pay its foreign debt obligations, its foreign exchange reserves have fallen and it has limited access to financial markets.

The government’s expected announcement on Friday will leave investors nursing big losses – or a 65 per cent haircut on the par value of 100 on the bonds.

It is also likely to reduce the chances of legal action against the default through the US courts as there will be very few so-called holdouts left to pursue the case.

“What’s really going to hurt is when a big country blows up and they’re going to have this as a template,” Hans Humes, chief executive of Greylock Capital, said.

Ecuador’s move was a “brilliantly run and managed process. They nailed the timing”.

The decision to default on the bonds by Rafael Correa, the country’s president, has been seen domestically as a triumph, winning him support among voters.

Mr Correa, a US-trained economist, insisted that the bonds were illegitimate because of the way they were negotiated after the country defaulted in 2000, accusing the hedge funds that mainly bought the debt of exploiting the financial system.

Mr Correa has been able to stand by his pledge to relieve the country of the “stultifying burden” of its foreign debt obligations.

In what appears to be a clever tactic, Mr Correa opted for an auction for holders of the defaulted bonds, which mature in 2012 and 2030, instead of forcing a price on them.

Investors could choose to accept the government’s buy-back price or ask for a higher price.

The full cost to the government of the default remains to be seen. Investors are likely to be deterred from buying Ecuadorian bonds.

Alberto Bernal, head of emerging market macro-economic strategy at Bulltick Capital Markets, said: “There is no market access and there will be no access as long as the current administration stays in power.”

Ecuador continues to receive funds from multilaterals such as the Andean Development Fund and the Inter-American Development Bank.

Ramiro Crespo, of Quito-based Analytica securities, said the only Ecuadorian government bond in issue, which matures in 2015, could eventually act as a bridge back to the markets.

Some analysts believe that Ecuador is prepared to service the debt of the 2015 bond because Venezuela, a close political ally, has exposure to these securities.

Tax Co-Operation Agreements with Jersey

Tax Co-Operation Agreements with Jersey
Nick Sherry

The Assistant Treasurer, Senator Nick Sherry, today announced the signing of a tax information exchange agreement (TIEA) and an agreement for the allocation of taxing rights over certain income of individuals between Australia and Jersey.

Concluding TIEAs with offshore financial centres supports Australian Government initiatives to combat offshore tax avoidance and evasion.

"The Rudd Government wants to ensure the continued integrity of our tax system by ensuring all Australians pay their fair share of tax whilst also co-operating with international efforts to curb tax evasion."

"This TIEA will provide for bilateral exchange of information (EOI), on request, for civil and criminal tax matters, and demonstrates Australia's ongoing commitment to implementing standards of transparency and effective EOI for tax purposes, as developed by the OECD and endorsed by the G-20 and the United Nations," the Assistant Treasurer said.

"This is the sixth TIEA signed by Australia, and Australia welcomes Jersey's constructive engagement in this area."

"The agreements will also benefit Australians by removing some tax obstacles that exist between the two countries," the Assistant Treasurer said.

In particular, the agreement to allocate taxing rights over certain income of individuals and to establish a mutual agreement procedure for transfer pricing adjustments will eliminate double taxation of certain income and provide a mechanism to help resolve transfer pricing disputes.

The agreements come into force once both countries have completed domestic requirements. Legislation will shortly be introduced into the Australian Parliament.

In addition to these agreements, Australia will remove any governmental references to Jersey as a tax haven and, following entry into force of the TIEA, will move to list Jersey as an 'information exchange country' in the Taxation Administration Regulations 1976. This will provide Jersey residents with access to reduced withholding tax rates on distributions of certain income they may receive from Australian managed investment trusts.

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Cayman close to being on OECD white list
2009-06-16
News

The Cayman Islands Monetary Authority (CIMA) has become a full member of the International Organisation Securities Commission (IOSCO). Membership for the regulator was confirmed at the IOSCO annual conference in Tel Aviv.

The Cayman Islands has agreed the IOSCO multilateral memorandum of understanding on consultation, co-operation and exchange of information (MMOU). This is a benchmark among security regulators. CIMA now has 15 bi-lateral memoranda of understanding with a number of major regulators, including the US Securities and Exchange Commission and the UK Financial Services Authority.

Membership of IOSCO should remove remaining barriers in some jurisdictions to the use of Cayman Islands entities where the regulatory regime permits only investors and/or counterparties to engage with vehicles that are regulated in an IOSCO member jurisdiction.

The deal should also pave the way for Cayman Islands funds to invest into many more jurisdictions.

IOSCO membership acknowledges that the Cayman Islands' regulatory system meets international standards, according to Charles Jennings at Maples and Calder in the Cayman Islands.

The Cayman Islands government is in detailed negotiations with a number of OECD members to conclude bilateral agreements before the end of July. This would then move Cayman onto the ‘white' list of countries and remove the accusation of the territory being a tax haven.

The OECD is currently reviewing what it calls the Cayman Islands's ‘innovative' unilateral mechanism for exchange of tax information. If this is approved it would initially add 10 jurisdictions to the list of countries with which the Cayman Islands has agreed to exchange information on tax matters.

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Cayman signs UK tax deal
Posted on Mon, 06/15/2009 - 14:38 in Headline News

(CNS): Leader of Government Business McKeeva Bush has signed a double taxation agreement (DTA) with the UK on behalf of the Cayman Islands Government. The deal reportedly protects against the risk of individuals or corporate entities being taxed twice on the same earnings. Stephen Timms, MP, who signed on behalf of the UK, said that the agreement includes unprecedented provisions for tax information exchange. It was not stated, however, if a bi-lateral agrement will follow this deal.

In a statement from the Ministry of Financial Services, Tourism & Development Public Relations Unit, it was announced that the LoGB had signed the deal today (15 June) in a ceremony at the UK Treasury. The DTA, which is another type of bi-lateral tax agreement, is the first double treaty to be signed by the Cayman Islands. “We are very pleased to sign this agreement with the United Kingdom today as part of the Cayman Islands' continued commitment to high standards of international cooperation and transparency,” Bush said.

Speaking about the UK’s advantage, Timms said that information exchange is a vital tool in ensuring that governments receive the revenues they need to resource the essential public services on which we all depend. “I would like to congratulate the Cayman Islands Government for signing up to an arrangement which includes unprecedented provisions for tax information exchange that meet international standards of transparency,” he added.

The agreement (see details here) places Cayman another step closer to the OECD’s requirement for a minimum of twelve agreements, which the new government has said it is committed to achieving not least in an effort to remove Cayman from the post G20 'grey list'. Cayman now has nine agreements in place. UK Permanent Secretary for Tax, Dave Hartnett said the information exchange provisions in this arrangement meet OECD standards of tax transparency.

Negotiations with the UK had been ongoing for a bi-lateral agreemen for several years but these had stalled. The previous government had accused the UK of constantly moving the goal posts with regards to that agreement and said that they had been seeking some form of commercial advantage for Cayman’s offshore industry before signing.

Speaking at what was the regular weekly press briefing prior to the election, the former Minister Alden McLaughlin explained that, while the government had been criticised for not signing treaties, the PPM administration had in fact been engaged in negotiations since they took office, but that did not mean they were able to be successful, adding that the government had to be very careful not to put Cayman at a commercial disadvantage. “We don’t want to put Cayman in a position of competitive disadvantage. We want to be compliant with OECD tax exchange standards but we don’t want to give away things other countries haven’t and then lose business,” McLaughlin said in April.

That view, however, has been disputed by some in the offshore community who questioned the wisdom of holding out on exchange agreements. They say that there is probably very little commercial advantage that the government can negotiate as in most cases Cayman is already getting all the business it is likely to get from a given nation, but that not having tax agreements is currently more of a disadvantage than the risk of losing a competitive commercial edge.

Richard Murphy of Tax Research UK, a critic of TIEA as ineffective in terms of cracking down on tax haven abuse, has dubbed this DTA treaty as useless frm the UK's point of view. He said it was not a full blown DTA or a a full blown TIEA. "In fact the extraordinary thing is that the information exchange clause is far less onerous than a TIEA. So, for example, there is no reference to the need for the parties to be able to prove beneficial ownership of trusts, companies and other arrangements in their territories, which a TIEA should require," he wrote.

The tax watchdog said that the UK would have as many problems complying as Cayman and Murphy said it would do little to assist Gordon Brown in his camapign against tax havens.

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Cyprus under US pressure to share financial information
By Elias Hazou

UNDER PRESSURE from Washington, Cypriot authorities have been prompted into action to bring in changes allowing them to share information on stock exchange transactions and bank accounts with non-EU countries.

A draft bill prepared by the SEC in collaboration with the Attorney-general’s office is currently under review by the House Finance Committee, and could be tabled before the plenum next week so that it can be voted into law.

The move comes after repeated warnings from the US Securities and Exchange Commission that it would place Cyprus on a “black list” as a “non-cooperative jurisdiction.”

Cyprus’ SEC is a signatory to a multilateral memorandum of understanding (MoU) with the regulatory authorities of the European Union, and has signed a number of bilateral agreements with individual countries—but not with the United States. However it is currently not a signatory to the MoU of the International Organisation of Securities Commissions (IOSCO), an international body whose members regulate more than 90 percent of the world's securities markets.

Through IOSCO’s MoU, members pledge to provide each other with collecting information and witness statements in an enforcement investigation. Such information might include the nationality of the person, passport photocopies, bank statements, and in general any data showing the flow of funds.

As it stands, Cyprus’ SEC laws expressly prohibit the sharing of information with countries with which it does not have an MoU in place.

“In order to give out information to non-EU supervising authorities, we must have a direct stake in the matter, that is, there has to be at least an indication that Cypriot SEC laws have been violated,” said SEC chairman Giorgos Charalambous.

Because of this limitation in the law, he added, the Cypriot body cannot assist US authorities in money-laundering probes. This means that if any persons wanted or under investigation by US authorities have financial dealings in Cyprus, the paper trail would go cold on the island.

Through its Embassy in Nicosia, the United States has for months now been urging the SEC to get on board with the IOSCO agreement.

Charalambous said the US SEC had been “patient,” but that Cyprus could not drag on indefinitely.

“They have repeatedly contacted us, both in writing and verbally, making inquiries as to where the situation stands. Our response was that we are favorably disposed toward their request but first need to amend the relevant laws,” Charalambous told the Mail.

Though he refused to be drawn on what kind of information US authorities had sought from Cyprus, the SEC official said “two to three requests for assistance” had been made in the last few months.

After being bounced back and forth from parliament to the SEC, a draft bill is finally ready, and will be fast-tracked so that it can go to the plenum—perhaps as early as next week.

During a briefing of the House Finance Committee yesterday, Charalambous warned of the dangers of having Cyprus “blacklisted” by the United States.

“Obviously by not being a full member you cannot give or receive information, so it cuts both ways. Secondly, it gives Cyprus a bad name,” remarked Charalambous.

The SEC is one of a number of anti-money laundering regulators, along with the Central Bank, the Insurance Commissioner, the Council of the Cyprus Bar Association, and the Unit for Combating Money Laundering (MOKAS).

Though it has largely cleaned up its image, in the past Cyprus had to fend off persistent accusations of being a tax haven and money-laundering centre. In 2001, it was the focus of an investigation into billions of dollars that went missing from Yugoslavia under former president Slobodan Milosevic. Cypriot authorities denied any wrongdoing.

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Gibraltar’s 10% corporate tax rate still ‘go’ for next July
by Helen Burggraf

A 10% corporate tax rate for both domestic and international companies will take effect as planned next July in Gibraltar, even though the publication of a consultation document on the planned tax reform could be pushed back until September, a government source said today.

The flat 10% will replace a zero rate tax – which has been grandfathered but still is understood to affect some 3,400 businesses – as well as a 27% tax paid by those businesses that do not benefit from the null rate.

“The commencement date [of the new tax regime] is, for sure, the first of July 2010,” Gibraltar Finance Director James Tipping said.

“The government is intending to publish that legislation well ahead of that date, which may be this July or this September” in order to give businesses time to prepare for its implementation.

But whether the consultation document is published in July or September, “the commencement will be next July”, he added.

He said that the plans to scrap the zero-tax rate, which has been in the works for some time, had not resulted in any businesses leaving Gibraltar. But those that do not want to pay 10% “can go somewhere else” if they want to, he added. “Our philosophy is that we are a low tax not a no tax jurisdicition.”

Gib Chronicle report

News that the publication of the consultation document could be postponed until September emerged on Tuesday, according to the Gibraltar Chronicle, which cited remarks by the territory’s chief minister, Peter Caruana.

It said the chief minister had been responding to questions from an opposition MP who had been urging the government to move ahead with the reform "as soon as possible" because it is "vital to the success of [Gibraltar's] financial services sector.”

Gibraltar’s planned move to a 10% flat corporate tax rate comes after a ruling by the European Court of Justice in Luxembourg last year, which determined that Gibraltar was able to set its own tax rates despite its status as a UK territory. The null tax rate, which dates back to 1967, has contributed to the image of Gibraltar as a “tax haven” that it is now seeking to dispel.

Tipping also confirmed that Gibraltar has now completed negotiations on tax information exchange agreements (TIEAs) with several undisclosed countries, but declined to say which, pending a formal announcement. Additional talks continue, he said.

Gibraltar has only signed one so far, with the US, but is looking to meet the Organisation for Economic Cooperation & Development’s stated minimum goal of 12 such agreements by November, as it seeks to move off the OECD’s tax jurisdiction “grey” list.

Among the countries it is thought to be close to announcing agreements with are certain key G20 nations that have agreements with other offshore jurisdicitions, such as the UK and France.

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足利事件：「菅家さんを支える・基金」弁護団が設立

　菅家さんの弁護団は１７日、菅家さんの裁判費用に充てるための基金を設立したことを明らかにした。「菅家さんを支える・基金」で口座は「みずほ銀行赤坂支店（普通）２０９７７４２」。裁判は弁護団の手弁当などで支えており「協力をお願いしたい」としている。

　また弁護団は同日、２３日に再審請求即時抗告審の決定を出すとしている東京高裁（矢村宏裁判長）に対し、２３日に決定を出さず、審理を継続して当時のＤＮＡ鑑定について徹底検証するよう求める声明を出した。

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China extends $10bn credit line to central Asia

By By Isabel Gorst in Yekaterinberg and Jamil Anderlini in Beijing

Published: June 16 2009 10:15 | Last updated: June 16 2009 19:27

China has offered to lend $10bn to central Asian countries hit by the global economic crisis in a move that is likely to strengthen its influence in the resource-rich region.

Hu Jintao, the Chinese leader, on Tuesday told a summit of the Shanghai Co-operation Organisation in the Russian city of Yekaterinberg that Chinese credit support would help central Asian countries “make their own efforts to counter the shock of the international financial crisis”.

The loans are expected to smooth the way for China to win more energy deals in central Asia, where foreign powers, particularly Russia, are competing for natural resources.

Mr Hu did not elaborate on where the money would come from. In the past Beijing, has lent to allies on favourable terms via its state banks and has used some of its $2,000bn in foreign exchange reserves to support foreign policy objectives.

China has invested heavily in central Asian oil and gas fields to secure a source of energy on its doorstep and is building roads in the remote former Soviet region.

Sergey Ryabkov, Russia’s deputy foreign minister, said Moscow welcomed China’s growing interest in central Asia, but added that all credit extended to the former Soviet region should be “transparent”.

Sun Yongfu, director-general of the European affairs department at the Chinese ministry of commerce, said China’s focus in central Asia was on energy, transport and banking projects that could provide a forum for regional financing. Central Asian countries are facing a steep economic decline as the global financial crisis dries up foreign investment and remittances from workers employed in Russia.

Offers of financial aid have helped China and Russia further their interests in the region. Russia offered $2bn of assistance in February after Kyrgyzstan agreed to evict the US from a military base. China has secured future oil and gas supplies since the onset of the crisis in return for financial help.

Kazakhstan accepted a $10bn loan from China in March in exchange for future oil supplies and equity in a Kazakh oil company that Russia had tried to buy. China recently provided soft loans totalling $25bn to Russia in exchange for a 20-year energy supply contract.

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Australia’s unions urge cap on executive pay

By Lachlan Colquhoun in Sydney

Published: June 18 2009 02:09 | Last updated: June 18 2009 02:09

Australia’s union movement – weakened over the past decade by falling membership and changing economic fundamentals – is attempting to use the recession to turn back the clock in the labour market.

The unemployment rate bottomed at a 30-year low of 4.2 per cent in June 2007 and now sits at 5.4 per cent. According to Reserve Bank of Australia, it will peak at 8.5 per cent in 2010-11.

Workers in every sector of industry – from publishing to banking – are losing their jobs on a daily basis. Even the Salvation Army is cutting jobs, shedding 200 workers in May.

Executive remuneration is also under threat, with many executives taking pay cuts, while a steady stream of returning expatriates are adding to the job market pressure at senior levels.

The timing is advantageous for the Australian Council of Trade Unions (ACTU), the leading labour movement body, which represents just under 19 per cent of the workforce compared with about half in the 1980s.

The Labor government of Kevin Rudd was elected in November 2007 largely on a platform of winding back the previous government’s Work Choices package, which attempted to weaken union power through enshrining individual bargaining and scrapping unfair dismissal laws for smaller businesses.

The Rudd government’s response – the Fair Work Act – is currently before parliament in Canberra.

The ACTU held its triennial congress in Brisbane in early June and considered a series of policy measures aimed at shifting the Australian labour market in favour of unions.

It proposes the further downgrading of individual bargaining, the abolition of penalties for industrial action and regulations that enable the prosecution of employers who “deliberately mislead employees about their rights”.

Although the ACTU supports the thrust of the government’s Fair Work policy, it does not think it goes far enough and claims the government has failed to meet International Labour Organisation (ILO) standards in some areas.

One of the biggest pushes is over executive pay – a raw subject in Australia, after a series of scandals in which executives were seen to be rewarded for failure.

The national telco Telstra is not tainted with scandal but negative publicity over the recent departure of its US-born chief executive, who was paid A$30m ($24m) over four years, has made for a lively public debate.

In response, the Rudd government has asked the Productivity Commission to investigate executive pay.

The Australian Prudential Regulation Authority, the country’s financial sector regulator, has drawn up draft rules requiring company boards to take direct responsibility for remuneration, including golden parachutes and loans to executives to purchase shares.

Unsurprisingly, the ACTU wants to go further. The union body is urging a cap on executive salaries at 10 times the average wage of the company’s full-time workers.

Jeff Lawrence, an ACTU secretary, says “outrageous” executive salaries have encouraged excessive risk taking and short-term thinking.

The ACTU says that analysis of Australia’s top 500 public companies shows chief executives’ pay jumped 564 per cent between 1990 and 2005 to an average of A$3.4m. In 1990, chief executives from the top 50 earned 18 times average full-time wages but in 2005 they earned 63 times the average, which is A$63,000.

Australian Industry Group (AIG), the employers’ lobby organisation, has hit back: “They are trying to obtain publicity for their congress by putting out these policies that are so retro they will grab attention,” says Heather Ridout, AIG’s high-profile chief executive.

“To try to set these sorts of arbitrary rules and legislate for them – I don’t think it would work in the type of economy we have in Australia,” she says. Shareholders, she adds, are the natural controllers of executive pay and it is up to the corporate governance of individual organisations to ensure the appropriate balance between shareholder and executive power.

In the current environment, however, it could be the market making the decisions. There has been a spate of redundancies, and with many senior people looking for work, the laws of supply and demand are coming into play.

At professional services firm KPMG, for example, 200 jobs have gone. PwC has shed 170, while Ernst & Young laid off 100 staff in April.

The pecking order of the top Sydney law firms is also in flux, as revenues sag and staff numbers are reduced, a process which is seeing talent re-emerge at second-tier firms now aggressively pitching for business in a declining market.

Over at Telstra, the new homegrown chief David Thodey is understood to be on a fraction of what was paid to his predecessor Sol Trujillo.

If anything is likely to flatten wage structures in Australia, it will be the market, shareholders and corporate regulators, and not a resurgent union movement, despite what happens at the ACTU congress in June.

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Saudi bonds hope to add liquidity

By Abeer Allam in Riyadh

Published: June 17 2009 15:58 | Last updated: June 17 2009 15:58

Saudi Arabia unveiled the latest in a series of innovations to its capital markets earlier this week when it opened a regulated bond and sukuk (Islamic bond) market. The move comes at an opportune time.

Many Saudi banks are at the limits of their credit capacity, with loan-to- deposit ratios exceeding the limit imposed by the central bank. Bank loans extended in 2008 equalled the total of the previous two years, according to Mohammad al-Jasser, the central bank governor.

In February, Mr Jasser urged commercial banks and companies seeking financing to tap the debt markets.

Rajiv Shukla, regional head of debt markets at HSBC Saudi Arabia, says the Saudi Capital Market Authority is working to allow potential issuers to diversify sources of finance to ease pressure on banks and add another strand to the country’s capital markets.

“It is a very sensible approach to create deeper and wider financial markets. No market should depend on one pool of liquidity,” Mr Shukla says.

“The banking system has done well in supporting the financial need of companies, infrastructure projects and government needs. But the banks have different needs now and it’s hard to be the only provider of liquidity.’’

So far, only four bond issues are available. Petrochemical giant Saudi Basic Industries Corporation, Sabic, has listed three Islamic bonds worth SR16bn and Saudi Electricity Corporation has listed a sukuk worth SR5bn.

Although the Saudi government owns large portions of each company, it has indicated it will not interfere with the bonds, although many expect that state pension funds will purchase them.

The move is the latest of several by the CMA to improve the kingdom’s capital markets.

In April the CMA said it was conducting preliminary studies with a view to introducing “options, short-selling and futures” onto the Tadawul as well as exchange traded funds. It also reiterated demands for disclosure of any holders of more than 5 per cent of a company – a move aimed at improving transparency and ensuring that the 128 listed companies comply with corporate governance rules.

Last August, the CMA allowed foreign investors to purchase the benefits of shares through swap arrangements. Previously, only institutional and individual investors resident in Saudi Arabia with bank accounts had been allowed to buy equities.

But bankers say that while a listed bond market is a boon, more issues need to be listed – ideally Islamic bonds which many local investors and most banks would prefer.

Furthermore, bankers say more work still needs to be done in developing the equity capital market, which is dominated by speculators.

“I would like to see greater access to the market by foreign institutional investors,” one banker says.

“Flows of foreign investment only come when they can buy directly, so I would like to see them focus more on making the market more institutions-based.”

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Clinton clashes with Israelis over settlers

By Daniel Dombey in Washington

Published: June 18 2009 03:00 | Last updated: June 18 2009 03:00

Hillary Clinton, the US secretary of state, clashed face to face with her Israeli counterpart yesterday as the two countries remained at loggerheads over the expansion of settlements in occupied territory.

In what appeared one of the most tense encounters between the sides for several years, Mrs Clinton and Avigdor Lieberman, Israel's foreign minister, disagreed on both the US call for a complete freeze on settlement growth and Israel's contention that the administration of George W. Bush, the former president, had signalled that some expansion was permissible.

"We cannot accept this vision about absolutely, com-pletely freezing all settlements," Mr Lieberman said.

In response, Mrs Clinton underlined the US call for a "stop to the settlements", a move she described as "an important and essential part of pursuing the efforts leading to a comprehensive peace agreement".

The meeting at the state department in Washington confirmed that the countries remain at odds on settlements, in spite of the decision of Benjamin Netanyahu, Israel's prime minister, to endorse the goal of a Palestinian state. His declaration, which was subject to conditions, followed sustained US pressure.

Yesterday's encounter was all the more significant for Mr Lieberman's record as the leader of the far-right Yisrael Beiteinu party, who blasted the previous Israeli government's peace efforts. Mr Lieberman is not seen as a promising interlocutor by Barack Obama's administration, which has instead focused its demands on Mr Netanyahu.

"We must keep the natural growth," Mr Lieberman said yesterday, referring to the argument that settlements sometimes need to expand to keep pace with births and marriages.

The US argues that such references to "natural growth" have in fact enabled large-scale settlement growth in the past.

While Mr Lieberman suggested that Israel had reached "some understandings with the previous [Bush] administration" allowing natural growth, Mrs Clinton vigorously rejected such a claim.

"In looking at the history of the Bush administration, there were no informal or oral enforceable agreements," she said. "That has been verified by the official record of the administration and by the personnel in positions of responsibility."

In a recent article in the Washington Post cited by Mrs Clinton yesterday, Daniel Kurtzer, the US ambassador to Israel between 2001 and 2005, argued there had been no understanding to permit natural growth. He ack-now-ledged that drafts at one time under discussion suggested that construction in built-up parts of settlements could be allowed, but added that no agreement had ever been reached.

Another article by Elliot Abrams, Mr Bush's former adviser on the Middle East, argued that the Obama administration's emphasis on a settlement freeze would lead to "needless confrontation" with Israel.

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Assad calls for better ties between Syria and Armenia

Daily Star staff
Thursday, June 18, 2009

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BEIRUT: Syrian President Bashar Assad on Wednesday called for Syrian-Armenian relations to quickly move forward after he met with Armenian President Serzh Sargsyan, Syrian state news agency SANA reported. Syria has a large Armenian community, especially in the northern city of Aleppo.

Assad's talks with Sargsyan covered a range of other topics, including the prospects for Middle East peace.

During his talks with Sargsyan, Assad explained that he does not envision there being an Israeli partner for peace in the near future, SANA reported. However, Assad said that "this doesn't mean that we will stop talking or working for peace, and when that partner is ready, the peace plan will be ready and we will save time."

Assad also discussed the Palestinian situation with Sargsyan, SANA said.

Assad said that he listened to Sargsyan's views on the disputed Nogorno-Karabakh region during the two leaders' talks. The region is claimed by Azerbaijan but controlled by Armenia.

Assad expressed his hope that "this matter won't be a permanent crisis, because the critical problems, as we [are] taught in the Middle East, [only] become more complicated and more difficult."

He added that "I wanted to listen to President Sargsyan's viewpoint before my first visit to Azerbaijan to see how we could help resolve this problem." - The Daily Star


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EADS considers European company status

By Peggy Hollinger and Kevin Done

Published: June 16 2009 23:30 | Last updated: June 16 2009 23:30

EADS could take on European company status as Louis Gallois, chief executive, attempts to overcome internal resistance to greater integration at the highly political Franco-German aerospace and defence group.

Mr Gallois, speaking to the Financial Times from the Paris air show, said management had launched a feasibility study into the pros and cons of the corporate status created by the European Union.

Germany’s BASF and Allianz, France’s Scor and the Scandinavian bank Nordea have all joined the ranks of the Societas Europaea, or SE, as the European status is known. Launched in 2004, this allows companies operating in more than one EU member state to follow a single set of rules and reporting procedures, and so cut their international administrative and legal costs.

No decision had yet been taken, but Mr Gallois said the simplified structure for a company such as EADS with European operations split between its four founding states could mark “a significant step towards integration. It makes things clear and easier. It is a symbol, too”.

The symbolism is unlikely to pass unnoticed at EADS, which owns the European aircraft maker Airbus, and has since its foundation nine years ago been buffeted by personal and political rivalries between French and German camps. Mr Gallois, appointed two years ago as the group’s first sole chief executive when its dual management structure was abolished, has made integration of the various divisions under the EADS umbrella one of the priorities of his mandate.

Yet, this year his attempts to emulate rival Boeing by bringing together the defence and space divisions met both internal and political resistance, as it would have cut the number of divisional heads by one. The two businesses have now been asked to co-ordinate their actions in search of greater synergies, rather than integrate fully.

EADS has also angered its Spanish shareholder after demanding that the Spanish-based military transport activities report to the core Airbus business, located in Toulouse. This week the Spanish government failed to turn up for the ministerial discussions on repayable launch aid for the latest Airbus project – the A350 wide body aircraft – and its absence was widely interpreted as a sign of displeasure.

Mr Gallois said adopting the European company status could simplify the group’s structure even further. Currently operations in different countries required “lots of shadow companies . . . each with boards meeting and processes”.

However, the process of becoming an SE was “cumbersome”. There were complex tax and social questions that needed to be resolved before a decision could be taken.

Mr Gallois said the group was also looking at new ways to cut costs to respond to the current industry downturn. He expressed confidence that the group would meet cost cutting targets of €2.1bn by 2010.

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Italy lifts hope of Europe shift on Guantánamo

By Stanley Pignal in Brussels, Daniel Dombey in,Washington, Guy Dinmore and Giulia Segreti in Rome

Published: June 17 2009 03:00 | Last updated: June 17 2009 03:00

Italy has declared it would accept three inmates from Guantánamo Bay as the Obama administration steps up its efforts to persuade European partners to help it close the detention -centre.

Washington's push has been complicated by the reluctance of the US itself to take in detainees, as well as issues such as Europe's Schengen free-movement area. That allows passport-free travel between participating countries and means former detainees accepted by one state might be able to go to another.

The Italian decision to accept three Tunisian prisoners, announced by Silvio Berlusconi, the prime minister, in Washington on Monday night, came after European Union members reached a framework deal on sharing information on detainees resettled in the Schengen area.

The US hopes that the deal will smooth the way for more European count-ries to take in former det-ainees, with Barack Obama, the US president, describing himself as "very appreciative" of the agreement.

However, Washington still has to overcome many European countries' reluctance at a time when the political debate in the US is focused on the risk former detainees may pose.

Yesterday, David Miliband, Britain's foreign secretary, said the UK had "done its bit in terms of Guantánamo", while talks with Germany about Berlin accepting some of the Uighurs held at Guant-ánamo failed to produce a result.

Four of the Uighurs, who say they face torture if returned to their native China, have since been sent to Bermuda, in spite of the UK's objections, and the tiny Pacific nation of Palau has said it is ready to accept the remaining 13.

An Italian official told the Financial Times that Italy was ready, on a case-by- case basis, to accept more than the three Tunisians.

Franco Frattini, Italy's foreign minister, told reporters that the three Tunisians would be able to circulate freely in the Schengen area, provided they had no legal cases pending against them in Italy and that other governments did not object.

Mr Berlusconi's announ-ce-ment is already stirring dissent within Italy's centre-right government, with Roberto Maroni, the hardline interior minister, expressing his opposition.

While the US is seeking to relocate about 50 detainees who have been cleared for release, Anthony Dworkin, of the European Council on Foreign Relations, says "15 to 20" resettlements in the EU is more realistic.

Still, last week the US transferred more detainees from Guantánamo than at any time since Mr Obama took office vowing to close the facility by late January next year.

Yet while that total of nine detainees is the largest number of such transfers in over a year, it compares poorly with both the roughly 230 detainees still held and about 530 released or transferred during the Bush administration.

On Friday, when three Saudi nationals were sent home to take part in a "deradicalisation" programme, the Obama administration's hopes could be broadened to include some among almost 100 Yemeni detainees in Guantánamo - if Saudi Arabia and Yemen agree. Washington views Yemen itself as too insecure to keep track of former detainees.

Earlier in the week two prisoners - from Chad and Iraq - were also sent home, while another detainee was sent to New York to face trial.

Many in the EU now expect further arrivals from Guantánamo.

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Spain ready to take Guantánamo inmates

By James Matthews in Madrid

Published: June 17 2009 14:26 | Last updated: June 17 2009 14:26

Spain on Wednesday said it was ready to accept prisoners from the detention centre at Guantánamo Bay in Cuba in order to help US President Barack Obama’s administration close the controversial facility for suspected terrorists.

José Luis Rodríguez Zapatero, prime minister, approved the idea of accepting “a limited number” of prisoners. “We are favourably disposed and of course the number would be small in any case,” he said in a television interview. Italy has already agreed to take three inmates.

Spanish foreign, justice and interior ministry officials on Wednesday met Daniel Fried, a senior envoy of the US State Department and Hillary Clinton’s special representative for the closure of Guantánamo prison, to discuss the possibility of Spain taking in former detainees.

Miguel Angel Moratinos, foreign minister, had already expressed Spain’s willingness “in principle” to consider admitting former inmates, and the foreign ministry said on Wednesday that Spain was ready to “help with the closure of Guantánamo in every way possible”.

At a press conference after what Spain called a “technical meeting”, Mr Moratinos, who did not personally meet Mr Fried, confirmed the US had asked Spain to take four former inmates from Guantánamo prison. Mr Moratinos did not comment on their nationality, nor did he rule out the idea of the US approaching Spain with other cases in the future.

Spain’s foreign ministry said Spain would examine each transfer application in detail to ensure that the relocation of former prisoners conformed to both national and international law. It also stressed the need to guarantee “security and public order” within its borders.

While the prisoners do not have to establish a prior link with Spain, asylum regulations require that they do not have criminal records. Nevertheless, Mr Moratinos predicted a “surveillance system” similar to that imposed in 2002 on three Palestinian militants that Spain took in following the siege of Bethlehem’s Church of the Nativity.

On Monday, foreign policy representatives of the European Union agreed to cooperate with the US in its efforts to close Guantánamo. Dismantling the facility by January 2010 was one of US President Barack Obama’s first commitments in office.

However, the EU emphasised that the primary responsibility for finding safe harbour for released prisoners lay with the US. The deal also stipulated that the US must share all available intelligence, including that considered confidential, on all prisoners relocated to Europe. In addition, the US has promised to study the possibility of contributing to the costs.

The US plans to release detainees who do not face charges and cannot return to their country of origin for fear of reprisals. More than 230 inmates remain in Guantánamo and about 50 have already been cleared for release. Mr Obama has emphasised that some inmates will be transferred to prisons on the US mainland, although he faces stern opposition in Congress to this move.

On Tuesday, Italy became the first country to use the new EU-US agreement for taking in former terror suspects and has announced that it will accept three inmates of Tunisian origin.

Four Uighurs – Chinese Muslims – have already been admitted by Bermuda in an agreement that sparked a diplomatic row with the UK, which was not consulted despite retaining control over the island’s foreign policy. Thirteen others have been taken in provisionally by Palau, a group of islands in the Pacific.

Mr Fried will be in Madrid for five hours before continuing on a tour of European countries that have shown willingness to receive further Guantánamo detainees.

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Marc Hayek: Mystery man behind a Calvinist classic

By Haig Simonian

Published: June 12 2009 16:04 | Last updated: June 12 2009 16:04

Among Switzerland’s Hayeks, Marc is the mystery man. His grandfather, Nicolas, is revered as saviour of the mechanical watch industry.

His uncle Nick is chief executive of Swatch Group. And his mother Nayla has sat on the board since 1995 while, most recently, taking charge of a new watchmaking venture with Tiffany.

Marc, born in 1971, has always been the enigma. Brought up largely by his grandparents, many thought he was adopted, not knowing of his mother’s youthful pregnancy and the agreement of his father, soon divorced, that their son should bear the Hayek family name.

Reluctant daughter rises to her father’s challenge at Tiffany

He joined Swatch Group after leaving university in 1992, spending four years in public relations and marketing.

But in 1996, he felt the time had come to experiment on his own, opening a successful restaurant in Zurich. “I had to see what I could do for myself. I wanted to build something up,” he says.

It was with some regret five years later that he accepted an invitation from Jean-Claude Biver to take over as marketing head of Blancpain, one of Switzerland’s most famous watch brands.

Established in 1735, the company had flourished, but, like many others, struggled with the arrival of quartz. Bought by Mr Biver and a partner for a song in 1981 and significantly revived, it was sold to a predecessor of Swatch Group 11 years later.

Under Mr Biver, who later went on to revive Hublot, and his partner Jacques Piguet, Blancpain regained much of its former prestige.

While Mr Biver concentrated on sales and marketing, Mr Piguet looked after manufacturing, linking Blancpain’s component and movement operations with those of Frédéric Piguet, a bigger specialist that is now also part of Swatch Group.

But it was under Mr Hayek that growth really took off. Output has quadrupled to beween 12,000 and 13,000 units a year, turnover has climbed by about the same amount, while profits have surged about 30-fold. True to industry tradition, Mr Hayek declines to disclose Blancpain’s earnings. But analysts reckon the company made about SFr30m ($28m) in 2008, its record year.

Blancpain’s watches are produced in a neighbouring Valleé du Joux village to Breguet, Swatch Group’s other prestige brand. At a former farmhouse, 60 to 70 specialists work in small, friendly teams, concentrating intently on activities such as tourbillons and fine engraving. Underlining its position at the very top of the market, Blancpain is the second-biggest maker of tourbillon watches after Breguet, notes Mr Hayek.

Components come from Frédéric Piguet, the Swatch Group’s maker of movements for upmarket watches. Although the company also produces for other group brands and a limited number of third parties, Blancpain is by far its biggest customer.

But how has Mr Hayek managed to distinguish Blancpain from Breguet, its bigger and even more prestigious neighbour?

The two brands focus on classic men’s watches and are in roughly the same price bracket, although Blancpain’s tend to be a little cheaper because of the brand’s strength in sports watches, generally made from steel rather than gold.

“Breguet tends to be more French- influenced, while Blancpain is more Calvinist, more classic, even more understated,” he says. “They’re a bit like our elder brother.”

Sibling rivalry is not helped by the fact that Breguet is run energetically by none other than Nicolas, Mr Hayek’s grandfather.

“We have quite a lot of independence in terms of brand strategy, positioning and product development. Naturally, we co-ordinate a bit with Breguet. But the idea in Swatch Group is really to have an entrepreneur running each brand. Breguet is our benchmark. It’s very tough!”

One way in which Blancpain is distinguishing itself is by focusing on its tradition for performance watches. The Fifty Fathoms range was born after a commission from the French Navy in 1953 to develop a high-performance diver’s watch and has remained emblematic of the company ever since.

The series was refreshed three years ago, with bigger, chunkier and heavier watches based on a new movement, appealing to current tastes for watches with more of a presence. The change went down well, and the range now accounts for about one-third of Blancpain sales, with plenty of back orders – welcome in these troubled times.

Mr Hayek, himself a keen diver and sportsman, has turned to motor racing for his second way to broaden Blancpain’s appeal. “I wanted something that would suit our new line. We are growing, we needed something sporty, dynamic and touching a larger public,” he says.

The group has teamed up with Lamborghini, the Italian sports car maker, to sponsor a new single marque race series, the Lamborghini Blancpain Super Trofeo.

Six weekend challenges will be held on racetracks across Europe this year, with Mr Hayek one of the drivers behind the wheel. Appropriately, his own sleek black Lamborghini Gallardo sits outside the office.

But, arguably even more important for Swatch Group than the revival of Blancpain or Mr Hayek’s success on the track is another crucial fact.

As the only third-generation member of the family, and with no others likely, Mr Hayek reveals his wife is expecting their first child in September.

Soon, it seems, another Hayek will be emerging to continue the family watchmaking dynasty.

......................................

Reluctant daughter rises to her father’s challenge at Tiffany

Complications, movements and haute horlogerie at the Baselworld Fair took a back seat to glamour this year, writes Carol Woolton.

A shining powder-blue temple of taste stood out like an elegant beacon among the serious, sober Swiss stand as people queued to view the debut collection of the new Tiffany Watch Company.

This is a partnership formed in 2008 between Tiffany & Co New York and the Swatch Group, combining the refinement of the New York brand with the distribution prowess of the world’s largest manufacturer.

The traditionally successful aspects of Tiffany watches, such as the Atlas and Tesoro collections, have had a most delicate design makeover, giving them a sleeker, modern look.

When searching for a safe pair of hands to tweak Tiffany watches into contemporary pieces that would appeal to markets around the world, Nicolas Hayek co-founder and chairman of the Swatch Group, decided to keep it in the family.

Who would understand the feminine brand of Tiffany and effect the necessary subtle changes better than Nayla, his only daughter, who has sat on the board of directors of the Swatch Group since 1995?

“I always tried not to enter the watch world,” admits Ms Hayek, a successful international Arabian horse breeder and judge. “But I have had strong views about our watch brands so my father said ‘if you’re always critical, then do something about it’.”

It must be difficult to avoid becoming immersed in watches when your family owns the world’s largest watch company. “As a family we look at watches all the time and talk about them,” she says. Even at Christmas lunch? “Yes, even then.”

At the fair, she is confident that accepting the challenge to become CEO of Tiffany Watch Co has been the right decision. “We’ve had tentative orders from the UK, Europe, the Middle East, Russia, China and Taiwan,” she says.

“I want to keep Tiffany as a feminine watch brand,” she says.“I wasn’t thinking about jewellery watches though because too many brands are doing that. The most important thing is to have a broad selection of designs.”

In Ms Hayek’s view, too many women’s watches are either jewelled pieces or smaller versions of a man’s watch. “This is the type of watch I search for as a woman,” she explains pulling out one of the newly-launched Atlas Lady pieces.

Ms Hayek owns about 30 watches including pieces by Rado, a couple of Longines including a diamond set L’Elegance evening watch, the Reine de Naples by Breguet and many by Blancpain. “It’s my favourite brand,” she says. “I love the understatement of Blancpain and the pure design. I will wear Tiffany but I’ve told them that I will still wear my Blancpain watches,” she laughs. “Well, I’ve got two arms.”

Fortunately for a brand famed for its high jewellery aesthetics, Ms Hayek loves diamonds so the 150-year heritage of classic diamond set vintage style evening watches a la Audrey Hepburn will flourish. “I like big stones and blue colours like aquamarines, topaz and turquoise.”

This explains the Tiffany piece de resistance at Baselworld, which is a full pave set cuff watch set with baguette diamonds with 5 Av set in the centre in scintillating blue diamonds.

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Rosatom agrees deal for stake in Uranium One

By Catherine Belton in Moscow

Published: June 15 2009 22:28 | Last updated: June 15 2009 22:28

Rosatom, the Russian state-owned nuclear group, has secured a 17 per cent stake in Uranium One, the Canadian miner, in a deal that gives it a greater presence in North America and could boost its plan for international expansion.

Atomredmetzoloto, or Armz, the uranium mining arm of Rosatom, is giving the uranium miner a 50 per cent stake in its Karatau mine in Kazakhstan. In return, it will receive 117m shares in the Canadian nuclear group worth $295m at Friday’s closing price, as well as $90m in cash.

The 50 per cent stake in Karatau will increase Uranium One’s output by 35 per cent, said Jean Nortier, chief executive of the Canadian group.

The deal is set to give a big boost to Rosatom’s attempts to increase supplies of uranium to Russia. The country’s domestic mining output has been falling even though Russia is still signing new deals to sell enriched uranium globally, analysts said. The country is also embarking on an ambitious plan to boost the share of nuclear generation in the country’s electricity output by building 26 nuclear power plants over the next 12 years. This year, Rosatom has signed significant co-operation agreements with Germany’s Siemens and Japan’s Toshiba.

The Uranium One deal includes an offtake agreement that gives Rosatom the option to purchase either up to 20 per cent of Uranium One’s global production, including that from Karatau, or more than 50 per cent of Karatau’s total output. Mikhail Stiskin, an analyst at Troika Dialog, said: “Essentially the mandate of Armz is to increase supplies of uranium to Russia. Until now it has been unsuccessful. This deal gives them the vehicle to do so.”

Vadim Zhivov, Armz’s chief executive, told the Financial Times that the deal was just the start of a strategic partnership in which the two companies would seek to make more acquisitions abroad.

“We have a plan for further expansion. We don’t expect this deal to be the last,” Mr Zhivov said. Mr Nortier told the FT the two companies would target Africa specifically for further expansion.

Rosatom has been seeking new and cheaper sources of uranium after it won additional enriched uranium supply contracts for the US and Japan this year. These included a landmark deal that will allow it to supply uranium directly to US companies for the first time in two decades.

But it has remained on the sidelines as global competition hotted up for uranium assets this year. Korea Electric Power Corp, for example, agreed to buy 20 per cent of Canada’s Denison Mines Corp in April.

“In a situation when rivalry for uranium assets has been growing more acute, Armz started pursuing a proactive mergers and acquisitions strategy,” Mr Zhivov said in a statement.

Armz has agreed not to increase its stake in Uranium One beyond 19.95 per cent for five years without the Canadian company’s consent.

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When China Rules the World

Review by David Pilling

Published: June 13 2009 02:11 | Last updated: June 13 2009 02:11

Cover of 'When China Rules the World' by Martin JacquesWhen China Rules the World: The Rise of the Middle Kingdom and the End of the Western World
By Martin Jacques
Allen Lane £30, 550 pages
FT Bookshop price £20

Books about China ruling the world used to be prefaced by “if”. Now, more often, they are preceded by the assumptive “when”. Such is the age we live in. Martin Jacques’ 550-pager on the ascent of China finds little space to consider the question of whether its rapid economic progress is unstoppable. It ignores almost entirely the other popular – and perfectly plausible – premise for books on the Middle Kingdom: “When China’s miracle goes phut”.

Jacques’ book is based on the extrapolation that, by 2050, China will be the biggest economy in the world, surpassing the US and India which, by then, will be third. By virtue of what Jacques calls the “merciless measure” of gross domestic product, China will be politically and militarily the most powerful country in the world.

We might argue about these two central premises, namely that China’s GDP will inevitably surpass that of the US, and that there is an almost mechanical relationship between economic output and power. These are legitimate points of debate for other books. Yet Jacques can be forgiven for making this leap of faith and asking what will happen to the world if, indeed, China becomes a dominant power.

Jacques’ thesis – argued clearly and logically, if somewhat laboriously – is that China’s rise will overturn “western” assumptions about what it is to be modern. To date, the world’s only successful economies of any size – with the exception of Japan – have been European or, in the case of the US, of European pedigree. The knee-jerk assumption of globalisation, he argues, is that as countries modernise they take on western characteristics. “We are so used to the world being western, even American, that we have little idea what it would be like if it was not,” he writes.

Jacques contends, not unreasonably, that China’s continental size, huge population, racial homogeneity and confidence in the centrality of its own civilisation make for a country capable of redefining what it is to be modern.

If Britain was a maritime hegemon and the US an airborne and economic one, then China will be a cultural one, he predicts. As Chinese confidence grows apace with its decisive emergence from two centuries of humiliation, its overriding attitude will not be one of catching up with the west, but rather of regaining its rightful place as the world’s pre-eminent civilisation. “As the dominant global power, China is likely to have a strongly hierarchical view of the world, based on a combination of racial and cultural attitudes,” he writes.

China will draw on its Confucian roots, a paternalistic ethos that, he argues, is not readily compatible with western democratic principles. He goes so far as to suggest that it would be best for China, indeed the world, if the “present regime continues” for some time, a verdict that this former editor of Marxism Today might not have advanced, say, about the Chile of Augusto Pinochet.

Much of the future Jacques foresees for China can be found in its past. He expects it to reassert elements of its ancient tributary relationship with neighbouring countries, leaving them alone so long as they pay cultural obeisance. China’s idea of itself as a living civilisation – what he calls a “civilization-state” as opposed to a nation-state – means it will never yield to assaults on its unity, particularly when it comes to Taiwan.

Jacques’ overriding point is that, in future, “the debate over values will be rooted in culture rather than ideology, since the underlying values of a society are primarily the outcome of distinctive histories and cultures”. His contention is that, since China’s culture and history are so formidable, it will not bend to western norms. If there is any bending to be done, it is the west that must yield.

That makes the book a useful corrective to those who assume that emerging superpowers, principal among them China, will recreate themselves in America’s image. Yet Jacques puts too much faith in culture as the ultimate arbiter of a nation’s destiny. He dismisses the argument of Chris Patten, the last British governor of Hong Kong, that the divide between east and west is more a question of time lag than intrinsic cultural difference. But in doing so, he goes too far the other way. He overemphasises Asia’s cultural predilections for community over individual, for social relationships over law, and for stability over freedom. In both south-east and north-east Asian culture, he writes, “the individual finds affirmation and recognition not in their own individual identity but in being part of a group”. These are sweeping statements that, at worst, sound like a Singaporean advertisement for Asian values.

Jacques’ writing on racism is revealing. Contrasting China with multicultural America, he presents it as an inherently racist culture more or less incapable of summoning a multicultural view of the world. “The fact that the Chinese regard themselves as superior to the rest of the human race, and that this belief has a racial component, will confront the rest of the world with a serious problem,” he writes. In what he describes as the “Middle Kingdom mentality”, he presents China as uniquely conflicted in its simultaneous feeling of superiority to other cultures and its inferiority to westerners who have overtaken it. These conflicted attitudes, for example, are common, and describe feelings of frustration and national inheritance denied (or at least postponed) in countries as far apart as Argentina and Japan.

In China’s rise, Jacques tends to see menace, albeit of a cultural rather than a militaristic nature. China’s view of itself as the centre of civilisation will, he says, lead to a “profound cultural and racial reordering of the world in the Chinese image”. But Jacques is more on the right lines when, elsewhere in the book, he talks about competing modernities. If, as he expects, China emerges as a world power to challenge the US, then modernisation is likely to be a two-way street, even a multi-lane highway, on which different versions circulate of what it means to be modern.

In the future, Americans may indeed watch more Chinese films and study Mandarin. But, by the same token, the Chinese will continue to learn from the west as its wholesale import of western capital, business practice and technology demonstrates. Just as Europeans and Americans may read more Confucius, so the Chinese will study more Shakespeare. It sounds like fun. The world is more likely to become multi-polar and culturally layered than recreated in China’s image. That is the whole point: China will not rule the world.

David Pilling is the managing editor of the FT’s Asia edition

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三井住友銀、ロシアで銀行免許取得　年内に業務開始

　三井住友銀行は18日、子会社のロシア三井住友銀行が現地で銀行免許を取得したと発表した。日系企業向けに現地通貨ルーブルによる融資業務などを新たに展開できるようになる。40人程度の陣容で年内に業務を開始する。

　同行は2005年に駐在員事務所を置き、日本円やユーロなどで融資や為替業務を展開してきた。成長市場での日本企業の活動を機動的に支えるにはルーブルを扱える現地法人が必要と判断した。

　３メガバンクでは三菱東京ＵＦＪ銀行、みずほコーポレート銀行が現地法人を設立している。

　ロシアは最近、株価も急回復している。今後、資源国としての恩恵を受ける可能性もあり、日系企業の投資意欲が旺盛であることを踏まえ、三井住友銀は現地法人化に踏み切った。(19:33)

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途上国の原発導入支援　産官学で組織旗揚げ

　政府と産業界などは18日、原子力発電を新たに導入しようとする途上国などを支援するため、産官学連携組織「国際原子力協力協議会」を設立した。都内で第１回の会議を開き、途上国の人材育成や安全規制などで産官学が連携して協力することを決めた。これまで各省庁や民間での個別協力にとどまっていたが、一貫した受け入れ態勢をつくることで支援体制を強化する。(15:01)

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病気診断、遺伝子で10分　東レなど、ＤＮＡチップ実用化へ

　微量の血液から病気の有無などを素早く診断できる「ＤＮＡ（デオキシリボ核酸）チップ」という次世代遺伝子検査技術の実用化に向けた動きが加速している。東レや東芝などが病院への普及を目指した検査法の標準規格をまとめたほか、三菱レイヨンなどは早ければ３年後の実用化を目指し厚生労働省に承認を申請する考えだ。実用化すれば遺伝子を手掛かりに個人の体質を簡単に調べられ、副作用が少ない治療が医療現場に広がると期待される。

　ＤＮＡチップは手のひらサイズのガラス板などの上にＤＮＡを張り付けた検査器具。素材や半導体の技術を応用して作る。患者の血液などを上から落とすと、がんや感染症など病気の有無などが早ければ10分程度で分かる。(16:00)

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５月の粗鋼生産量、４カ月ぶり600万トン台　在庫調整が一段落

　日本鉄鋼連盟が18日発表した５月の粗鋼生産量（速報値）は前年同月比38.5％減の648万8000トンだった。前年実績を下回るのは８カ月連続。ただ、減少率は２カ月連続で縮小し、前月との比較では13.1％増に転じた。

　生産量が600万トン台を回復したのは2009年１月以来、４カ月ぶり。鉄鋼連盟は「自動車関連を中心に在庫調整が一段落した」のが原因としており、今後も「ゆるやかに回復していく」とみている。

　炉別にみると、建材や自動車、電機など幅広い用途に使う転炉での生産は前年同月比37.9％減の484万1000トンだった。建材向けが多い電炉での生産は40.2％減の164万7000トンだった。(15:07)

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ライブドア側に賠償命令　東京地裁、虚偽記載認め6100万円

　ライブドアによる有価証券報告書の虚偽記載で株価が急落し損害を受けたとして、大阪の建設機械製造会社など株主がＬＤＨ（旧ライブドア）や堀江貴文元社長（36）ら旧経営陣に計約１億5000万円の損害賠償を求めた訴訟の判決で、東京地裁（難波孝一裁判長）は18日、計約6100万円の支払いを命じた。

　難波裁判長は判決理由で、有価証券報告書の虚偽記載があったと認定。そのうえで、虚偽記載が公表された場合、前後１カ月の平均株価の差額を損害額と推定する2004年の改正証券取引法（現金融商品取引法）の規定を適用した。

　ライブドアによる虚偽記載の疑いが報道された06年１月18日を「公表日」として、公表日の前１カ月と後の１カ月の平均株価の差額１株585円を推定損害額と算出。ただ、株価の急落は堀江元社長の逮捕など虚偽記載以外の原因もあったとして、最終的に１株200円と損害額と判断した。(20:01)

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進む“銀証融合”米欧マネるメガバンク巨大化のワケ

「リスク管理技術を磨きつつ組織を維持できるのか」の声
三井住友や三菱ＵＦＪは「巨大化のワナ」から逃れられるだろうか（クリックで拡大）
三井住友や三菱ＵＦＪは「巨大化のワナ」から逃れられるだろうか（クリックで拡大）

　規制が緩和され、国内の大手銀行と大手証券の距離がなし崩し的に狭まってきた。最近も、三井住友フィナンシャルグループが日興コーディアル証券などの買収を決めたばかり。大手行の主導で進む銀行と証券（銀証）の再編は、１９９０年代に米国で加速した銀証融合をほうふつさせる。が、その裏には「ワナ」も潜んでいる。

　「銀証融合」の大先輩である米国も、もともとは法律（グラス・スティーガル法）で銀行による証券業務を禁じていた。それが８０年代後半以降、金融工学の発展に伴って「リスク管理技術が高度になれば、業務拡大は有益であり、財務体質も強化される」との見方が拡大。銀行と証券の兼業禁止は次第に緩められ、９９年には撤廃された。

　一般に「銀行は預金を引き受け、所要自己資本を厳しく定められているため、証券会社に比べ資金調達力や資本力で優位に立ちやすい」（ＵＢＳ証券の大槻奈那氏）。

　銀行と証券の間の高い垣根が外れると、シティなどの銀行グループが証券会社・投資銀行の買収を加速。対抗するようにゴールドマン・サックスなどの投資銀行も巨大化に突き進んだ。

　そして、「銀証融合」で巨大化した米金融グループは、欧州の金融勢とともに金融派生商品、証券化商品の開発・取引を拡大。その結果どうなったかというと、米国で不動産バブルが弾けたのをきっかけに金融派生商品や証券化商品は壊滅的な状態に。昨年９月には米証券大手リーマン・ブラザーズが経営破綻し、リーマン・ショックに見舞われた米欧の巨大金融機関は公的資金注入に追い込まれた。

　ここでクローズアップされたのは、銀証融合で巨大化した金融機関が陥った「巨大すぎて管理できない」という問題。

　日本も９３年に、銀行、証券が子会社を通じて相互参入できるようになって以来、銀証間の垣根は低くなり続けてきた。国内金融の強化と国際競争力獲得に向け、金融庁が「ニューヨーク、ロンドンをイメージし、規制改革を進めてきた」（同庁幹部）結果だ。

　規制緩和により「安定的に資金調達できる銀行主導で証券再編が進んできた」（大手証券幹部）のは事実で、その構図は米国と似ている。

　米欧金融グループが失速した現在、日本の大手行グループは相対的に勢力を拡大。巨大化と多角化に突き進もうとしている。金融界からは「米欧の投資銀ノウハウを取り入れ、海外展開するチャンス」との声も上がる。

　が、一方で「リスク管理技術を磨きつつ、その巨大化した組織を維持できるのか」とためらう声も。

　日興コーディアル証券の買収に当初は意欲的だった三菱ＵＦＪグループが一転して“撤退”となったのは、傘下の三菱ＵＦＪ証券での顧客情報流失問題が影を落としたからだった。

　「この問題で、三菱ＵＦＪのコンプライアンス（法令順守）とガバナンス（企業統治）が問われることになった。組織づくりを優先し、規模拡大を見送ることになった」（金融筋）という。

　その三菱ＵＦＪは国内のモルガン・スタンレー証券と経営統合し、投資銀行業務などを充実させる計画だ。

　巨大化とリスク管理のバランスをどうとっていくのか。大手行は巨大すぎて管理できないという「巨大化のワナ」に陥らないため、難しいかじ取りを迫られそうだ。

ZAKZAK 2009/06/18

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裁判員制度：宗教界から忌避の動き

　日本カトリック司教協議会（岡田武夫会長）は１８日、司祭（神父）らの聖職者が裁判員に選ばれた際、辞退を促すとの見解を発表した。聖職者が裁判員として人を裁く立場になると、政教分離を定めたカトリック教会法に抵触しかねないというのが理由で、過料を払ってまでの不参加を勧めている。一方、真宗大谷派は死刑反対の立場から、制度見直しを決議した。

　同協議会の見解は、司祭や修道者に裁判員候補者の通知が届いた場合、調査票・質問票に辞退を明記し、それでも選任された場合は、過料（１０万円以下）を払って参加しないよう勧める－－との内容。国内のカトリック信者は約４５万人で、辞退を促す対象は約７０００人という。

　協議会によると、カトリック教会法は政教分離の理念から「聖職者の国家権力行使への参与」を禁じている。協議会がローマ法王庁に非公式に問い合わせたところ、聖職者が裁判員になるのは「教会法抵触のおそれがある」との回答だった。

　参審制のイタリアやドイツなどでは、聖職者は参審員に選ばれない。日本の裁判員法には神父や僧侶を裁判員から除外する規定はない。ただ、裁判員になることで「精神上の重大な不利益」を受ける場合は辞退を認める規定があり、最終的には裁判所の判断となる。

　一方、真宗大谷派（信者約５５０万人）は９、１０の両日、僧侶でつくる宗議会と門徒でつくる参議会が、裁判員制度の見直しを求める決議をした。同派は「殺してはならない。殺させてはならない」との仏教の教えを踏まえ、死刑廃止を主張している。決議は「死刑事件に裁判員としてかかわったとき、自らは死刑の判断をしなくとも、心の傷は一生自らを苦しめる」と指摘。「司法制度改革は、死刑を廃止することから始まらねばならない」と訴えている。

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著作権訴訟：５０年代邦画のＤＶＤ、著作権認め販売差し止め

　１９５０年代に公開された邦画３作品の廉価版ＤＶＤを販売する「コスモ・コーディネート」（東京都中央区）に対し、著作権が存続しているとして映画製作会社「東宝」が販売差し止めや１３５０万円の賠償を求めた訴訟の判決で東京地裁は１７日、販売差し止めと１０８万円の支払いを命じた。清水節裁判長は「公開から７０年を経ておらず、著作権の保護期間内」などと判断した。３作品は「おかあさん」（成瀬巳喜男＜みきお＞監督）と「暁の脱走」（谷口千吉監督）、「また逢（あ）う日まで」（今井正監督）。判決などによるとコスモ社は３作品のＤＶＤ計３０００本を作製し１本１８００円で販売した。

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核融合実験：２６年までに開始で合意　ＩＴＥＲ機構

　日本や欧州連合（ＥＵ）、中国など７カ国・機関で進めている国際熱核融合実験炉（ＩＴＥＲ）計画について、実施機関のＩＴＥＲ機構は１７、１８両日、水戸市で理事会を開き、重水素と三重水素を使った核融合実験を２０２６年までに開始することで合意した。核融合実験の目標が明示されたのは初めて。

　ＩＴＥＲは、太陽で起こっている核融合反応を炉内で再現し、エネルギー源としての利用を目指す。実験炉の建設は、フランスのカダラッシュで昨年から始まった。これまでの計画では、核融合反応を閉じ込めるためのプラズマ発生を１８年までに実現することが合意されていたが、その後は未定だった。

　また、理事会では主要施設だけを先に建設し、プラズマ発生を確認した後に全体の施設を完成させることも決めた。池田要・ＩＴＥＲ機構長は「リスクを減らし、確実に２６年までの核融合実現を目指すため」と説明した。

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Russia, China to Promote Ruble, Yuan Use in Trade (Update3)
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By Lyubov Pronina and Alex Nicholson

June 17 (Bloomberg) -- The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar a day after they took part in the first summit of the so-called BRIC countries.

“We agreed to take further steps in this direction, including, perhaps, by adjusting contracts and laws that already exist,” Russian President Dmitry Medvedev told reporters in the Kremlin today after talks with his Chinese counterpart Hu Jintao.

Russia, the world’s biggest energy supplier, wants to start selling oil to China in rubles, said Deputy Prime Minister Igor Sechin, who is also chairman of OAO Rosneft, Russia’s biggest oil company. Energy sales in rubles are a “strategic” issue for Russia, he said, adding that oil exports to China over the next 20 years will surpass $100 billion.

Brazil, Russia, India and China agreed yesterday to push for more clout in global financial institutions during what Medvedev called BRIC’s “historic” first summit in the Ural Mountains city of Yekaterinburg. China and Russia have called for a more diversified financial system to give emerging economies a bigger say in economic affairs, including the creation of alternatives to the U.S. dollar as a reserve currency. The four countries may also consider buying each other’s bonds, a notion that drew skepticism from some analysts.

‘Direction of Movement’

“This is not something for the immediate future, but rather a direction of movement,” said Stanislav Ponomarenko, a fixed-income analyst at ING Groep NV in Moscow. “I don’t think more than a few percent of reserves could be reinvested into BRIC bonds. What we’re seeing is a continuation of discussions to find an alternative to the dollar, yet nobody is going fundamentally to alter anything yet.”

China has the world’s biggest foreign-currency reserves, almost $2 trillion, while Russia is third with more than $400 billion.

Meantime, dollar bonds sold by the largest emerging-market countries are outperforming debt traded in reais, rubles and yuan. Bonds sold in dollars have beaten domestic debt in part because Russia and China manage the ruble and yuan. Those denominated in the U.S. currency can trade more freely, giving fund managers confidence they can sell the securities and get their money when they need it.

‘Market Decides’

“It’s not up to politicians to determine which currency will be the world reserve currency,” said Lutz Karpowitz, a currency strategist at Commerzbank AG in Frankfurt. “In the end the market decides it.”

The ruble weakened 0.1 percent to 31.2396 against the dollar in Moscow today after earlier strengthening as much as 0.4 percent. The yuan was little changed against the dollar on speculation China will prevent appreciation to avoid a prolonged slump in the nation’s exports.

Expanding the use of national currencies in trade and in mutual settlements “is a separate, important task,” Medvedev said today.

Even so, it will take “at least a couple of years” to start converting the first contracts into domestic currencies, said Elina Ribakova, Citigroup Inc.’s chief economist in Moscow.

‘Symbolic Value’

Today’s announcement has “important symbolic value,” she said. “If you take a 10- or 20-year perspective, trade between Russia and China will increase significantly.”

Total trade between the neighboring countries reached a record $56.8 billion last year, according to the Kremlin.

After today’s Moscow meeting, Russia and China signed an agreement worth $3 billion to cooperate in trade and investment in areas including light industries, high technology and energy.

The dollar’s status has come into question as leaders of the BRIC nations consider substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the U.S. dependent on foreign financing. China alone owns about $744 billion of U.S. Treasury bonds among its $2 trillion of foreign- exchange reserves.

Russian central bank First Deputy Chairman Alexei Ulyukayev’s comment on June 10 that Russia may sell some of its U.S. bonds to buy International Monetary Fund notes helped push 10-year yields on Treasuries to the highest level since October.

Brazilian President Luiz Inacio Lula da Silva today denied that BRIC leaders discussed buying each other’s bonds at the Yekaterinburg summit, after Medvedev’s top economic adviser said the matter might be discussed.

Dollar bonds sold by China earned 11.4 percent in the past year, more than double the 4.6 percent for debt in yuan, JPMorgan Chase & Co. indexes show. Brazil’s U.S. currency bonds returned 3.6 percent as real-based notes lost 4.9 percent, and Russia’s dollar bonds outperformed with a 1.9 percent loss compared with a 7 percent drop in ruble debt. India doesn’t have dollar-denominated debt.

Hear No Evil

Hear No Evil

By Obaida Hamad
Photos Phil Sands & the French Cultural Centre

Hear No Evil

Religious authorities have blocked the performance of a play by one of Syria’s leading literary figures, the first time a cultural performance has been officially censored in response to religious protests.

Touqous al-Isharat wa al-Tahawoulat (Rituals of Signs and Transformations) was scheduled to run for two nights on March 31 and April 1 at the state-run cultural centre in Aleppo, Syria’s second largest city. The final performance was cancelled, however, after local religious authorities objected to its portrayal of Islamic leaders.

Controversial material

Hear No EvilThe play, written 15 years ago by the late Syrian playwright Saadallah Wannous, takes a critical look at political ambition, religious fundamentalism, sexuality, hypocrisy and intellectuals who serve autocratic regimes. Controversially, its central character is an Islamic religious leader who is immoral, corrupt and a womaniser.

It was the first time the play, by one of the Arab world’s leading contemporary playwrights, was performed in the author’s homeland. The text of the play, however, has been available at Syrian bookshops since it was first published in 1994. Rituals of Signs and Transformations has previously been performed in Lebanon, Jordan and Kuwait, although minor modifications were made for the Jordanian and Kuwaiti productions.

The play’s production was sponsored by the French Cultural Centre, the European Union and the Ministry of Culture’s theatre and music department. It was directed by Wisam Arbash, a French director of Syrian origin. The opening performance in Hama and two more shows in Damascus were staged without incident. In Aleppo, however, the second and final performance of the play was cancelled at short notice.

Two Aleppan muftis raised objections about the play’s depiction of Islamic leaders to officials at the city’s governorate and the Ministry of Culture, lobbying to have it cancelled for being blasphemous.

“I didn’t attend the play, but I received many phone calls and people came to my house pushing me as a mufti to stop the play which humiliated Islamic figures,” Sheikh Mahmoud Akkam told Syria Today. “I support freedom of expression, but not freedom that hurts Muslim dignity. For that reason I contacted officials in Aleppo and the Ministry of Culture to sk them to stop showing the play.”

Akkam said the move to cancel the final showing was supported by the wider community in Aleppo. “I represent the view of the Muslim street,” he said. “The decision to stop the play is a wise one and has helped contain an angry reaction.”

Arts community angered

The move by religious figures to intervene in a cultural performance is unusual in Syria and has raised concerns among the country’s arts community and secular intellectuals about the growing power of religion in the country’s cultural life.

“It was a mistake to stop the play,” Taiseer Edress, a well-known actor who starred in the play, said. “I’ve been an actor since 1977 and this is the first time that anything like this has ever happened to me. I’m still angry about it.”

The move to cancel the play’s final performance in Aleppo was all the more surprising, Edress said, given the play’s director had already toned down some of its language after receiving feedback from the Ministry of Culture.

“The Ministry of Culture owes us an explanation,” he said. “The play was cancelled even after we changed the words they wanted. It is not an important issue to change a word such as ‘whore’ into ‘prostitute’.”

Anwar Baddar, a Syrian drama critic at the London-based daily Arabic-language newspaper Al-Quds Al-Arabi, said the play’s cancellation was “a dangerous sign for the future”.

“The surprising thing is that the objections didn’t come from the censorship department or those who are responsible for this kind of matter,” Baddar said. “It’s not the job of a sheikh to monitor the work of the Ministry of Culture. What happened in the case of this play clearly shows that there are unofficial figures interfering and censoring books, plays and soap operas. It’s a dangerous sign for the future.”

Play not banned

Hear No EvilGovernment officials have denied a ban has been put on the play, pointing to the fact that only one of five performances did not go ahead. They say the decision to cancel the final Aleppo performance was based on local considerations, rather than an outright ban.

“The show wasn’t banned, it was stopped because of the reaction of the people,” Ajaj Salim, director of theatre and music at the Ministry of Culture, said. “We can show the play again in other cities in the future and we could show it in Aleppo in the future as well.”

Salim, who attended the first show in Hama, categorically denied that religious authorities in Syria have veto power over cultural productions.

“No mufti has the right to stop any play,” he said. “The mufti concerned conveyed notices and comments from people to the relevant officials. He dealt with the issue in a respectable way and informed officials that many people were not happy.”

Salim said the ministry had consulted with the play’s director in the lead-up to the performance to take into account local sensitivities, given the work’s controversial nature.

“I’m a director and I live here, I’m not coming from France so I advised him [Arbash] because I know what the people here think,” Salim said. “For me it’s more important to present a good play by Saadallah Wannous than it is to provoke a problem.”

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Georgia sees red after Russia vetoes UN monitors

TBILISI, June 16 - Georgia lashed out at Russia on Tuesday for vetoing a resolution to extend UN monitors’ mandate in breakaway Abkhazia, saying Moscow did not want ”witnesses” in the region.

Russia quashed a Western-proposed resolution at the UN Security Council late on Monday designed to buy time to negotiate a long-term plan for the 16-year-old monitoring mission in the Black Sea rebel region.

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Marcos and her gems to be reunited

By Roel Landingin and agencies in Manila

Published: June 15 2009 20:12 | Last updated: June 15 2009 20:12

She was famous for her shoes and lavish lifestyle. Now, 23 years after her husband was deposed as leader of the Philippines, Imelda Marcos may soon be reunited with her jewellery. The Philippine government has urged the return of gems worth more than $310m (€224m), including a Burmese ruby said to be as big as a prune.

The justice department on Monday ordered an anti-corruption agency to resolve claims dating back two decades on several sets of jewellery allegedly belonging to Mrs Marcos and return them to her family if warranted.

Raul Gonzalez, justice secretary, said that the Presidential Commission on Good Government, which aims to recover about $10bn of the allegedly ill-gotten wealth of Ferdinand Marcos, the late dictator, and his family, did not issue a sequestration order when it seized the jewellery in 1986.

“Evidently, Mrs Marcos remains to be the legitimate owner of said prized jewellery,” Mr Gonzalez said in a letter to the commission.

The commission said that it was surprised but would discuss the order on Tuesday.

The collection, which reportedly included a diamond brooch, bracelet and earrings as well as the prune-sized ruby, has been kept in a vault at the Philippines’ central bank since 1990.

Mrs Marcos, who went to court to stop a government attempt to auction the jewellery collection in 2006 arguing that the gems were not acquired illegally using public funds, welcomed Monday’s decision.

“Thank God that after more than 23 years of relentless persecution and deprivation initiated by the Cory Aquino administration in 1986, President Gloria Arroyo’s government has now started efforts for truth and justice to prevail,” she said.

Many of the pieces were meant for religious images, including “tiaras for the Blessed Virgin Mary”, said the former first lady, whose power and extravagance is the theme of a show, Imelda: The New Musical, set to open on Broadway in New York this autumn.

But the justice department order was condemned by human rights advocates as another example of the “unpredictability and instability” of government policies under Mrs Arroyo.

The president is struggling to counter record low popularity ratings amid a widespread perception that she is behind attempts to rewrite the constitution to remain in power after her term ends next year.

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Qatar breaks from high-pressure surge

Published: June 15 2009 18:02 | Last updated: June 15 2009 18:02

In Doha the cranes are whirring and the headhunters are still busy, but Ibrahim Ibrahim, an adviser to the emir, says Qatar is taking a break from headlong growth.

As secretary-general of the general secretariat for development planning, Mr Ibrahim’s job title sounds like that of a Soviet functionary. The Qatari government is engaging in central planning on a heroic scale as it manoeuvres through the global crisis but the economic hand dealt the country is the envy of any red-blooded capitalist.

Qatar has been the fastest growing economy in the Gulf for about a decade. But, as oil prices headed north and gas exports increased, inflation spiralled. So the breather brought about by the financial crisis is generally welcomed by economists.

“There must be a speed limit to anything because if growth is too fast it cannot be met by the capacity of the country. It will cause problems,” Mr Ibrahim says. “I don’t want to say this was a blessing in disguise, but it did reduce the pressure on the economy.”

HSBC says real gross domestic product growth this year is likely to fall below 10 per cent from last year’s 15 per cent, while inflation dropped sharply in the first quarter and will continue to moderate this quarter, averaging less than 5 per cent over the year.

“Qatar will be the fastest growing economy in the region by some margin, but the pace is easing and that offers some real advantages. They don’t have the same time pressures as others in the region,” says Simon Williams, chief economist at HSBC in Dubai.

The scale of the emirate’s real growth will emerge over the next five years. Gas exports, which last year eclipsed oil as the main revenue earner, are due to increase by 135 per cent. Exports of liquefied natural gas are due to double by the end of this year.

The Qatar Investment Authority is set to invest the majority of these revenues abroad, along the lines of a high-profile investment into Barclays, the UK bank, and a potential stake in Porsche, the German car-maker. But, over the past few months, the sovereign wealth fund has taken a more domestic approach.

The lull in international activity has allowed the wealth fund to restructure, reorganising business and moving staff. It has also been instrumental in government attempts to shore up the domestic banks.

As stock markets in the Gulf tanked last year, the QIA said it would buy 10- 20 per cent of local banks’ equity portfolios in a $5bn plan.

The government has similarly intervened in the property sector in the wake of a downturn in which valuations have slumped by more than 30 per cent. The central bank is leading a QR15bn ($4.1bn) plan to take on property portfolios of nine local banks, though the mechanics have yet to be revealed.

“By protecting the real estate market we hope to encourage the banks to lend, as any delay in these projects or any stoppage could be more harmful,” Mr Ibrahim says.

Rents, which have fallen more than 10 per cent, are helping the employment market as companies find housing more reasonable.

Mr Ibrahim says he hopes developers will expand into low-cost housing for the workers needed for the vast process of industrialisation over the coming years.

“I think what we need is development more in lower income housing and not high-income housing,” he says.

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Cayman Islands deal reached

By Vanessa Houlder

Published: June 16 2009 03:00 | Last updated: June 16 2009 03:00

Britain has signed a tax agreement with the Cayman Islands, one of the world's largest hedge fund centres, which has come under pressure during the international crackdown on tax havens and offshore financial centres. The deal is designed to address double taxation and "fiscal evasion".

Stephen Timms, financial secretary to the Treasury, said the agreement was "a significant step" in establishing the jurisdiction's compliance. The territory is required to sign three more agreements promising assistance to foreign tax authorities before it will be removed from the "grey list" of tax havens.

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「独立役員」に親会社・主力行の出身者は認めず　経産省方針

　経済産業省は上場企業に導入を検討している「独立役員」に親会社や主力銀行の出身者を認めない方針だ。経営陣と利害関係がなく、独立性の高い社外取締役または社外監査役を最低１人置くことで、上場企業のコーポレートガバナンス（企業統治）の向上を目指す。今後、東京証券取引所などが詳細を議論して上場規則に盛り込むなど具体策を検討する。

　同省の「企業統治研究会」の最終報告書に盛り込み、17日に発表する。会社法は委員会設置会社には社外取締役、監査役会設置会社には社外監査役の設置を義務付けている。ただ当該企業や子会社の役員・従業員以外なら「社外」と認めており、親会社や主要取引銀行など取引先の出身者が社外役員に就任しているケースも多い。(07:00)

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【足利事件】「本部長謝っているのを見て許す気になった」菅家さん
2009.6.17 12:42
このニュースのトピックス：刑事裁判
１７年半ぶりに故郷を訪れた菅家利和さん（中央）＝１７日午前１０時半すぎ、ＪＲ宇都宮駅１７年半ぶりに故郷を訪れた菅家利和さん（中央）＝１７日午前１０時半すぎ、ＪＲ宇都宮駅

　平成２年の足利事件をめぐり再審請求中に釈放され、栃木県を訪れた菅家利和さん（６２）は１７日、県警本部で石川正一郎本部長から直接謝罪を受けた後、栃木県庁で記者会見し、「本部長が謝っているのを見て考えが変わった。許す気になった」と話した。

　一方で、菅家さんは「誤ったＤＮＡ鑑定を行い、無実の私を１７年半苦しめた科警研の技官らは絶対に許さない。再審で間違いを明らかにしてほしい」と述べた。

　弁護団は、栃木県警の石川本部長が面会の際に「当時の捜査員全員を代表して、自分が悪い」と述べたことを明らかにし、「県警の心からの謝罪は伝わった」と述べた上で、「この問題は県警だけの問題だけない。検察、裁判官らの誤りを明らかにしていく」と述べた。

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Carter says Gaza Palestinians treated like animals
Tue Jun 16, 2009 11:18am EDT

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GAZA, June 16 (Reuters) - Palestinians in the Gaza Strip are being "treated more like animals than human beings", former U.S. president Jimmy Carter said on Tuesday.

On a visit to the enclave, he condemned Israel's January bombardment of Gaza and its continuing trade blockade, which he said forbids even children's toys.

"I understand that even paper and crayons are treated as a security hazard," he told Gazans at a local United Nations office. "I sought an explanation of this when I met with Israeli officials and I received none, because there is no explanation."

Carter, 84, has spent far more years as a human rights activist than he did in the White House from 1977 to 1981. He is easily the most outspoken former U.S. president on the Middle East conflict, and seen by many Israelis as a harsh critic.

He ignored a U.S. government ban on dealings with Gaza's Islamist rulers Hamas and had talks with its leaders.

Israel tightened a blockade on Gaza in 2007 when Hamas took control after routing rival Fatah forces loyal to President Mahmoud Abbas, who favours a peace deal with Israel. In late December, Israeli forces bombed then invaded Gaza, devastating its already battered infrastructure.

Since then, Israel has blocked imports of steel, cement and other goods to the population of 1.5 million Palestinians, saying Hamas could use many items for military purposes.

Carter, a Democrat, said he had seen for himself there had been almost no reconstruction in Gaza over the past five months.

"Never before in history has a large community like this been savaged by bombs and missiles and then been deprived of the means to repair itself," he said.

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【危うい「友愛」外交】（１）米大物が警告した民主の「反米３点セット」 (1/5ページ)
2009.6.16 15:24
このニュースのトピックス：外交

　「民主党が掲げる政策を一度にぶつけたら、米議会や政府は反米とみなすかもしれない。皆さんは注意されたほうがいい」。

　静かな室内に、「反米」という言葉が非常ベルのように響きわたった。昨年１２月１９日朝、東京都心の帝国ホテルの一室で開かれた民主党幹部と米知日派の国防・安全保障専門家の懇談でのことだ。

　民主党側の出席者は、鳩山由紀夫幹事長（当時、以下同）、菅直人代表代行に岡田克也、前原誠司両副代表を加えた４人。米側は民主党系のジョセフ・ナイ元国防次官補、ジョン・ハムレ米戦略国際問題研究所長（元国防副長官）の大物二人に、ブッシュ前共和党政権で対日政策を担当したマイケル・グリーン前国家安全保障会議アジア上級部長、ジム・ケリー元国務次官補も加わった。

　見えない将来像

　鳩山、菅らの顔をみすえるように、「反米警告」の口火を切ったナイは、イエローカードの代わりに三つの具体的問題を挙げた。

　（１）海上自衛隊のインド洋給油支援活動の即時停止（２）日米地位協定の見直し（３）沖縄海兵隊グアム移転と普天間飛行場移設を柱とする在日米軍再編計画の白紙撤回－。

　いずれも、民主党が最新政策集「政策ＩＮＤＥＸ２００８」などを通じて政権公約に掲げてきたものだ。

　「反米とみなされないためには日米協力の全体像（トータル・パッケージ）を描いた上で個別の問題を論じたほうがよい」。出席者によると、ナイはそう強調した。口調は穏やかでも、反米警告に込められた疑問は明白だった。

　それは民主党政権になった場合の日米同盟の将来像がさっぱり見えないということだ。

　菅らは「民主党政権になっても日本の外交安保政策の基軸は、日米関係だ」と説明し、約４５分間の懇談は終わった。だが、それから半年たった今も、米側出席者の一人はこう語る。「民主党が日本の政権に就いて本当に大丈夫か」。

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沖縄密約文書「ない理由示せ」　地裁裁判長、国に要請（1/2ページ）

2009年6月17日5時1分

　７２年の沖縄返還に伴って日米間で交わされたとされる「密約文書」をめぐる情報公開訴訟で、東京地裁の杉原則彦裁判長は１６日、「文書を保有していない」と主張する国側に「その理由を合理的に説明する必要がある」と指摘し、次回までに示すよう求めた。訴えられた国側に積極的な説明責任を求めたもので、異例の訴訟指揮といえる。

　密約をめぐっては、その存在を裏付ける外交文書が米側で公開されているにもかかわらず日本政府は一貫して「密約はない」と否定し続けている。訴訟をきっかけに、国側の姿勢が改めて問われることになりそうだ。

　訴えているのは、作家の澤地久枝さんや立正大講師の桂敬一さんら２５人。昨年９月に情報公開法に基づいて、密約を記した日本側文書の公開を求めたが、国は「保存場所を探索したが、文書を作成、取得した事実は確認できず、廃棄・移管の記録もなかった」などとしたため、今年３月に提訴した。

　この日あった第１回口頭弁論の冒頭で、杉原裁判長は「率直な感じを述べさせていただく」と切り出し、米側に密約文書があるのだから日本側にも同様の文書があるはずとする原告側の主張は「十分理解できる点がある」と発言。原告側が、仮に密約文書そのものを国が保有していないとしても関連文書はあるはずと主張していることについても、「理解できる」とした。

　そのうえで、もし密約そのものが存在しないというのであれば、アメリカの公文書をどう理解すべきなのかについて「被告側が説明することを希望する」と述べた。

　さらに、当時の交渉責任者で、密約があったことをメディアに明らかにしている吉野文六・元外務省アメリカ局長を証人に招くよう原告側に促した。吉野氏は０６年、朝日新聞のインタビューに「当時は、とにかく協定を批准させればそれでいい。あとは野となれ……という気持ちだった。そのために『記憶にない』『そういう事実はない』と言ってきた」と証言した。

　原告の澤地さんは閉廷後の会見で、３７年前に密約を暴いた西山太吉・元毎日新聞記者が国家公務員法違反で有罪とされた件に触れ、「存在しない文書をめぐって西山さんは裁かれたというのか」と話した。

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Iraq war inquiry to be held in secret

By James Blitz, Defence and Diplomatic Editor

Published: June 15 2009 22:50 | Last updated: June 15 2009 22:50

Gordon Brown has said the long-awaited inquiry into the Iraq war would be conducted in secret, drawing criticism from opposition leaders who insist the proceedings should be held in the full glare of public scrutiny.

As Britain prepares for the final withdrawal of its forces from Iraq next month, the prime minister told the House of Commons the inquiry would be independent of government and with the widest possible remit to investigate Britain’s role in the war.

Mr Brown said the inquiry, to be chaired by Sir John Chilcot, a former civil servant at the Northern Ireland Office, would examine British policy from the summer of 2001 until July 2009. Mr Brown did nothing to limit Sir John’s terms of reference, other than to say the inquiry “will not set out to apportion blame or consider issues of civil or criminal liability”.

Sir John will publish his findings when he has completed his work in one year’s time. However, the announcement that the inquiry hearings would be held in secret – along the lines of the Franks investigation into the origins of the 1982 Falklands war – drew an angry response from opposition leaders.

David Cameron, leader of the Conservative party, said some sessions should be held in public. “Isn’t that what many will want and many will expect, and part of the building of public confidence that is absolutely necessary?” he asked Mr Brown.

Nick Clegg, Liberal Democrat leader, took a similar view, saying: “It looks to me suspiciously like you want to protect your reputation and that of your predecessor instead.”

Mr Brown said the inquiry – which will be completed after the next general election – must be held in closed session to protect national security. “In this way . . . evidence given by serving and former ministers, military officers and officials will, I believe, be as full and candid as possible,” he said.

To underscore the independence of the inquiry team, none of its members will be former politicians or soldiers. They will include Baroness Usha Prashar, chair of the Judicial Appointments Commission; Sir Roderick Lyne, former UK ambassador to Moscow; Sir Lawrence Freedman, professor of war studies at King’s College London; and Sir Martin Gilbert, the historian best-known as the biographer of Sir Winston Churchill.

The inquiry will be Britain’s fifth official investigation into the Iraq war since 2004. The Butler inquiry of that year has until now been the most important. It inquired at length into the use by Tony Blair, former prime minister, of secret intelligence material to justify the claim Saddam Hussein possessed “weapons of mass destruction”.

The new inquiry will probably shine most light on the inadequate preparation by the UK and US for a long-term occupation. None of the previous inquiries has considered in any detail this aspect of the war.

Richard North, author of a recent book on the Iraq war, said: “Illuminating the conduct of the occupation is of vital and immediate importance. This is because the lessons learned . . . have immediate application to the prosecution of the counter-insurgency in Afghanistan.”

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Envoy named to head MI6 spy agency

By James Blitz in London

Published: June 17 2009 03:00 | Last updated: June 17 2009 03:00

Britain yesterday took the unusual step of appointing a prominent career diplomat as the next head of its foreign security service, MI6, a position which has rarely gone to an outsider.

Sir John Sawers, Britain's 53-year-old ambassador to the United Nations, was appointed to the post referred to within the service as "C." He replaces Sir John Scarlett, who has headed MI6 for five years and had been expected to retire this summer.

Sir John Sawers' appointment will place him at the centre of Britain's counter-terrorism strategy for the next five years, the length of time that most people occupy the post. MI6 is in charge of all foreign intelligence-gathering for the British government, while MI5 runs domestic security.

For decades, the heads of MI6 and MI5 have been insiders from the world of espionage and secrecy, people whose photographs and biographies were not in the public domain. However, Sir John's appointment reaks with tradition. He is the first person from outside MI6 to be appointed as chief since Sir John Rennie, also a diplomat, in 1968.

Whitehall sources acknowledged Sir John had been in MI6 early in his career, after which he left the service. They said the bulk of his career has been in the ranks of the regular diplomatic service.

Sir John has been one of the most prominent figures in UK foreign policymaking for many years, acting as an adviser to Tony Blair and as one of the top negotiators in the Foreign and Commonwealth Office.

Sir John has spent much of his career in the Middle East and was Britain's special envoy to Iraq immediately after the US-led invasion of 2003. His appointment suggests that the focus of British intelligence- gathering will continue to be on the Middle East.

He has also played a central role in forging UK policy on Iran, both as political director in the foreign office and as ambassador to the UN. Over the years, he has emerged as something of a hawk on the issue of forcing Iran to halt its uranium enrichment programme.

Downing Street yesterday said Sir John' Scarlett's decision to retire had nothing to do with the announcement this week of an Iraq war inquiry.

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Syria: These Teenagers Mean Business

By Nitin Jugran Bahuguna, Womens Feature Service

A math whiz since childhood, it seemed a foregone conclusion that Rasha Al Dabbas, 15, would take up a career in engineering or medicine. So when she informed her parents of her dream to open branches of her own bank in different provinces of Syria after graduation, they were taken aback.

Dalal Al Imadi, 15, has come up with a novel idea of creating a website on the internet to design advertisements for companies. "This is a very rare idea, giving companies an opportunity to promote their products on my website. There is no such website in Syria, yet," she claims proudly.

Turning away from the traditional and accepted career options of doctor, teacher or engineer, young women in Syria are setting out to storm the hitherto male bastion of the business world, be it in the banking sector, web-designing or as a private enterprise.

Under the auspices of SHABAB, a Syrian NGO, young girls are being given a unique opportunity to achieve their potential in diverse fields. The project is a national movement of local community action, dedicated to motivating and preparing young people to enter the business world by increasing their awareness of business and developing their key skills. "The objectives of SHABAB are to boost entrepreneurship amongst young Syrians, encourage them to enter the business world, equip them with the skills they need in order to succeed as productive individuals and create a positive impression of business amongst Syrian society," explains Yamama Al-Oraibi, Project Manager, SHABAB.

The NGO runs four programmes aimed at people between 15 and 24 years old: Business Awareness; Know about Business; Business Experience and Business Clinic. In line with its emphasis on reaching out to youngsters throughout Syria, SHABAB has implemented these programmes in the cities of Damascus, Aleppo, Homs, Lattakia, Deir al-Zour, Tartous, Rural Damascus and Quneitra.

Volunteers from the business communities bring their knowledge and experience into the classrooms. Besides raising awareness of business among young people, the project is an effective example of how the business world can contribute to the local community, states Yamama. "Since its inception three years ago, the project has directly benefited over 46,000 young people in 500 schools and recruited over 350 business volunteers," she maintains.

At the Al Farouk School for Girls in downtown Damascus, students of Class 10 are busy working on their different projects in groups of six. Rasha, who is the Marketing Manager of her project, says she and her friends want to set up a bank, which will have branches in each province "because we want to provide services to the largest number of customers".

She is aware of the challenges of competing with bigger established banks in the country, but has worked out a strategy to offer quality services. "To attract more customers, we will hold a lottery on special occasions and during Easter we give our customers gifts. We will also put up a permanent donation box in our bank for charity collections," she elaborates.

"This project has opened our eyes to the different job possibilities we can explore. As women, we don't need to confine ourselves to teaching or other traditionally accepted female occupations. After discussing this with my parents they have been very supportive. They know that Maths is my favourite subject and are confident I will excel because of my determination," adds a smiling Rasha.

The optimism and enthusiasm of these adolescents is amply demonstrated as child after child talks animatedly about her pet project. "I want to start a clothes and toy company for children, which I will name 'Baby Tune'," says Sara Parees, 15. Envisioning a luxury company offering competitive prices, Sara hopes to raise the initial capital by approaching charitable institutions or established business firms. "I feel as a single woman one has an advantage as charities look favourably upon us for loans. Also, I could approach big companies to sponsor us if we agree to give them a percentage of our future profits," she avers.

"I don't think every woman should be a doctor or engineer. Girls have more choices today," asserts Rouqa Hamzah, 16. Rouqa and Yoser Shelleh, 15, want to be designers of ladies' garments and accessories. They have already earmarked a site in the city where they will open their boutique, Beauty World, after graduation. "The logo of our boutique is a yellow lamp. The idea is to tell customers that our shop is like the genie of Aladdin's lamp and we will provide them with all their needs," explains Yoser.

"Our dresses will all be in the western style as it is in vogue now among girls and women for both formal and party wear," adds Rouqa. The two, in partnership with another friend, plan to each bring some capital to start their dream shop. "Yes, it is a risk, but it is interesting and it's also what we want to do. We are confident because each of us will pool different experiences in the field," says Yoser.

Mariam Idris, 15, has planned a mall called Shining Island that will include a spa, an American restaurant and a dormitory for children.

One of the distinctive features of SHABAB is that it offers different segments of society the opportunity to participate in the implementation of its programmes and thus play an active role within their local community, states Mais Balkhi, a Business Experience Assistant Manager. She points out that its strongest working relationships are with the local business communities, government and civil society.

SHABAB forms part of the Syria Trust for Development. The first NGO in the country, it was launched under the patronage of Syria's First Lady, Asma Akhras al Assad. According to the Central Bureau of Statistics (CBS), female participation in total labour force has increased from 12.4 per cent to 16.3 per cent between 1994 and 2006.

To encourage young women entrepreneurs, the government has started a two-fold micro credit scheme that gives women both access to finance as well as training in marketing, sales and advertising at special training centres, Assad reveals. Observes the First Lady, "We are the first country in the Middle-East to develop a micro credit legislation to support small entrepreneurs to register their companies in the formal sector so that they have more benefits like tax benefits."

Womens Feature Service covers developmental, political, social and economic issues in India and around the globe. To get these articles for your publication, contact WFS at the www.wfsnews.org website.

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SQHC puts its fertilizer plant project in action
The Chairman of Syrian-Qatari Holding Company (SQHC), Mr. Nasser Hassan Al-Ansari, signed earlier last month a Memorandum of Understanding (MoU) on behalf of SQHC with the Ministry of Oil and Mineral Resources and the Ministry of Industry.

* Syria: 4 hours, 57 minutes ago
* PRESS RELEASE





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1. SQHC rolls out its projects across different industry sectors at the 1st GCC Investment Forum in Syria

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The purpose of the MoU was to establish a company to construct and operate a production facility to produce phosphate-based fertilizers.

In this light, meetings between the Ministry of Industry, the Ministry of Oil & Mineral Resources and SQHC are being conducted on regular basis in order to ensure a smooth transition from the MoU to the Final Definitive Agreement. Furthermore, SQHC commissioned a technical and feasibility study, currently being conducted by Nexant, an international consultancy company based in the UK, specialized in the energy, chemical and fertilizer industries.

Mr. Hassan Mukayed, CEO of SQHC, stressed the importance of this project and said:

'This is a strategic and crucial project to Syria's agricultural development. It will further bolster our self-sufficiency capabilities, as well as enhance our export competitiveness. Our ability to attract world-class partners and consultants, such as Nexant and others, is a testament to the crucial role SQHC is playing in its commitment to raising Syria's business standards. SQHC's world-class team is implementing our vision according to top international standards, facilitating mandatory financing and technical requirements.'



During a visit of Nexant's representatives to Syria from June 9th to June 11th, a consortium team comprising of SQHC, Nexant, the Ministry of Oil & Mineral Resources and the Ministry of Industry visited the Industrial City in Hassia, the TSP factory at the General Fertilizers Company in Homs, the Eastern Phosphate mines of the General Company of Phosphate and Mines in Sawana near Palmyra, the Phosphate Industrial Washing Facilities at the Eastern mines, and potential sites for the newly proposed phosphate based fertilizer factory.

'Upon positive findings of Nexant's market and feasibility study, and in collaboration with our international strategic partners, the Ministry of Oil & Mineral Resources and the Ministry of Industry, we are hoping to help transform Syria's phosphate-based fertilizer industry through the successful implementation of the project,' Mr. Mukayed added.

Syrian-Qatari Holding Company expects an expansion of its consortium, to include additional national, regional and/or international strategic partners. This will further bolster current capabilities in fertilizer production and marketing. Such discussions are already under way in the Middle East, Europe and elsewhere, and SQHC is giving careful consideration to various candidates.

Syrian-Qatari Holding Company is committed to introducing leading and pioneering investment opportunities to the Syrian market across different industries. The company sets sights on becoming the leading investment firm and partner of choice in Syria by investing in several other sectors such as Power Generation, Agriculture, Dairy & Juice, Healthcare, Real Estate and Financial Services.

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Russian move raises supply crunch fears

By Ed Crooks, energy editor

Published: June 17 2009 03:00 | Last updated: June 17 2009 03:00

Alexei Miller, Gazprom's chief executive, warned in a speech in Italy last week of a looming "supply crunch" in the oil market after 2012, caused by under-investment today, which could send oil and gas prices soaring.

A few days later, he drove that warning home in the most vivid way possible, with Gazprom's investment cuts and production delays raising the spectre of a gas supply crunch in Europe.

The decision to defer the flow of gas from Gazprom's first development of the huge reserves in the Yamal peninsula, in northern Russia, makes perfect sense in the short term.

All the talk in the industry is of a global "gas glut", fostered by a surge in supplies of liquefied natural gas, particularly from the mega-projects in Qatar now coming on stream.

"Barely a year ago everyone was saying Gazprom would not be able to keep up with demand," says Jonathan Stern of the Oxford Institute for Energy Studies. "The speed of the turnround has been extraordinary."

The global recession has hammered Europe's gas consumption, particularly for industrial users. The car industry, for example, uses gas-fired heaters to dry paint, and many assembly lines have fallen silent.

Cedigaz, the gas industry association, has estimated that industrial demand in developed economies, including the European Union, the US and Japan, will be 17 per cent lower this year than last year.

Residential consumption is more stable, but the EU's overall demand could fall 5 per cent this year, even after an unusually cold January.

Gazprom, which is the biggest gas importer into the EU, has been forced to cope with that downturn at the same time as Russian demand has been plunging.

Prof Stern estimates that EU demand will be 20bn cubic metres lower than last year, Russian demand 40bn cu m lower and demand from Ukraine and other former Soviet states also 20bn cu m lower.

Gazprom has responded by cutting its own production and forcing independent Russian gas producers to cut theirs. It has also told Turkmenistan, one of its main central Asian suppliers, to cut its export price. An explosion in April cut the gas pipeline from Turkmenistan to Russia, and it has not yet reopened. The causes are disputed.

The rate at which gas demand picks up will depend on the pace of economic recovery.

Tony Hayward, chief executive of BP, said last week that although demand had steadied after dramatic falls earlier in the year, there were as yet no signs that it was rising again.

So Gazprom's forecast that even in 2012 its production is likely to remain lower than last year is a plausible assumption.

The alarming prospect for Russia is that western European demand will never recover. If the EU could meet its objective of raising energy efficiency by 20 per cent by 2020, then its gas consumption could fall through the decade. Cambridge Energy Research Associates, a consultancy, argued recently that even going halfway to the EU target could cut gas demand back to early 1990s levels by 2030.

However, other experts are sceptical those savings can be achieved, or that other fuels can substitute for gas in the next decade.

Colette Lewiner of Capgemini, the consultancy, argues that European gas demand is set to rise until at least 2020.

"I don't think renewables will be able to do enough," she says. "If you take all the other energy sources, you are still left with a rising need for gas."

European production, meanwhile, is in decline. The International Energy Agency estimates western Europe's gas production will fall by 30 per cent over the next two decades.

The search is on for new sources of gas to bring to Europe. The EU has high hopes for Azerbaijan and Turkmenistan, and recently there has been growing optimism about gas from northern Iraq. But the reality is that the EU cannot do without Russia, and sooner or later that gas from Yamal will be needed.

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Rise in agricultural commodity prices seen easing

By Javier Blas, Commodities Correspondent

Published: June 17 2009 11:59 | Last updated: June 17 2009 11:59

Agricultural commodities prices will rise 10-30 per cent over the next 10 years compared with their average of 1997-2006, less than previously feared because of lower economic growth and oil prices, two leading organisations said on Tuesday.

“Continued weakness in the general economy will further dampen commodity prices over the next two to three years,” the United Nations’ Food and Agriculture Organisation and the Organisation for Economic Co-operation and Development said. But they added that prices “should then strengthen with economic recovery”.

“We are forecasting lower prices than [we forecast] last year,” Merritt Cluff, a senior economist at the FAO and one of the report’s main authors, told the Financial Times. Last year’s report saw prices rising by an average of 40 per cent over the next decade.

Private sector analysts and agriculture industry executives are less relaxed, however. In addition, wholesale agricultural commodities prices have already risen to their highest level in eight months, up about 50 per cent from December’s lows.

The FAO and OECD acknowledged risks ahead, saying that “further episodes of strong price fluctuations cannot be ruled out nor can future short-lived crises” and added that agricultural commodities prices will “remain above historical averages”.

But the overall tone of their Agricultural Outlook 2009-18 report painted a more positive picture than last year, when at the peak of the food crisis they warned of sharply rising prices over the coming 10 years and a “structural upward shift” in food costs.

This time, however, the two organisations said that there was “lessening evidence” to suspect that the world has “undergone any structural upward shift” in food costs.

Most executives from the food industry and analysts believe, however, that agricultural commodities prices have experienced an structural upward shift in costs, which is likely to be exacerbated by water scarcity and climate change.

The report states, however, that agricultural commodities prices – even when taking into account inflation over the next 10 years – will not return to their low levels of the last decade, suggesting that food costs have, indeed, moved to a higher plateau.

Among individual food commodities, it sees higher prices for vegetable oil and corn, followed by rice, sugar and wheat. Meat and dairy product prices will remain little changed when compared with the levels of 1997-2006.

The organisations said that the agricultural sector was expected to be better shielded from the global economic crisis than others because of ”the recent period of relatively high incomes” and the fact that a drop in personal incomes has little effect on food demand.

Agriculture, long a neglected sector in terms of policy discussions, is now being examined more closely by policymakers after the 2007-08 food crisis, which saw record prices for staples such as wheat and rice spark food riots from Haiti and Bangladesh to Egypt and Senegal.

The FAO and OECD warned that even if food prices rose by less than feared over the next 10 years, global food security would remain a problem. “High food costs, combined with the global credit crunch, falling international trade and investment flows, lower remittances and budgetary pressures on development aid, are reversing the progress made in combating global poverty,” they said.

Jacques Diouf, head of the Rome-based FAO, told the Financial Times earlier this year that the combination of high food prices and the economic crisis would boost the number of chronically hungry people above 1bn for the first time this year, up from 963m in 2008.

Before the food crisis started in 2007, there were fewer than 850m chronically hungry people in the world, a level that had remained roughly constant since the early 1990s thanks to the global fight against poverty and increased economic growth in countries such as China and India.

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知事会の内部留保金３１億円、橋下知事が返還要求

　大阪府の橋下徹知事は１７日の記者会見で、全国知事会が約３１億円の内部留保金を外国債や地方債に投資していることを明らかにし、「（運用の）責任の所在がはっきりしない」と批判、即時解約と留保金の返還を求めた。

　内部留保金は、全国知事会が入居する都道府県会館（東京）の建て替えのために、都道府県から集めていた負担金の余剰分。府や知事会によると、２００３年～０６年に、知事会事務総長の決裁で外国債１１億円の購入に充てられたほか、地方債に１４億４０００万円、普通・定期預金に約５億６０００万円運用されている。

　このうち外国債は３０年間の運用が元本保証の条件で、知事会は府に対し、仮に今年５月時点で解約して売却すれば、約４億円の損失が発生すると説明したという。

　橋下知事は記者会見で、「余っている金はすぐ返してもらう。（途中解約による損失は）知事会事務局の人件費で責任をとるべきだ」と批判。これに対し、知事会側は「資産運用は少しでも積立金を増やそうとして行ったこと」としている。

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“大富豪”英女王に補助金７５００万円、「いびつな制度」批判も

　広大な領地を持つ英国のエリザベス女王が、欧州連合（ＥＵ）から巨額の農業補助金を受け取っていることが明らかになった。

　英政府が先月公表した資料によると、女王は昨年、ロンドン北方約１６０キロにある王室私有地サンドリンガムの「農地の生産助成金」として、ＥＵから４７万３５８３ポンド（約７５００万円）を受け取った。ここは、女王が毎年クリスマスを過ごす離宮、ダイアナ元皇太子妃が少女時代に住んだ家や森林が広がる保養地で、約８０平方キロ・メートルの農地もある。

　ＥＵの農業補助制度は、第２次世界大戦後の食糧不足解消を目指して始まり、現在は小規模農家の支援を名目としている。補助金は原則として地権者に支払われるため、「大富豪」の女王も受給権を持つ。英研究機関「欧州改革センター」のジャック・サーストン研究員は、「いびつな制度の象徴」と批判する。

　農業補助金は現在、ＥＵ予算の約４０％を占める。過去に何度も改革論議が浮上したが、農業大国フランスなどの反対で難航。制度が矛盾をはらんだまま維持され、「本来の目的である所得再配分とはほど遠い」（同研究員）のが現状だ。

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柔道の世界無差別は中止へ、会場のマカオ「経済情勢厳しい」

　今年９月にマカオで開催予定だった柔道の世界無差別選手権が中止されることが１７日、全日本柔道連盟の理事会、評議員会で報告された。

　大会を主管するマカオ連盟から先月、厳しい経済情勢などを理由に国際柔道連盟に開催を返上する意向が伝えられ、代替開催も厳しい見通しという。

　同選手権は男女無差別だけで実施され、昨年、フランスで第１回大会が行われた。

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US banks to break free of state assistance

By Francesco Guerrera and Greg Farrell in New York

Published: June 17 2009 01:22 | Last updated: June 17 2009 01:22

JPMorgan Chase and Morgan Stanley will no longer issue government- guaranteed bonds in an effort to sever their financial ties to the US authorities and show investors they can fund themselves without Washington’s help.

In separate statements, the two banks said on Tuesday they did not expect to have to sell short-term bonds backed by the Federal Deposit Insurance Corp, a banking regulator.

The announcements by the two banks, which could be followed by Goldman Sachs and the other institutions that passed the government’s recent stress tests, make it likely the debt guarantee plan will not be extended beyond its October deadline.

The move by JPMorgan and Morgan Stanley underline the gap between banks that have freed themselves from government aid and rivals such as Citigroup, Bank of America and Wells Fargo that still owe money to the authorities.

Citi, BofA and Wells declined to comment on whether they would issue more FDIC-backed debt.

General Electric, which did not receive government funds but whose finance arm GE Capital has issued billions of dollars in FDIC-backed and non-guaranteed bonds, said it would continue to raise funds through both sources.

JPMorgan, Morgan Stanley and Goldman are among the 10 financial groups that on Wednesday will send a combined $68bn back to the government following last week’s decision to let them repay funds from the troubled asset relief programme.

In a letter to Barney Frank, chairman of the Financial Services Committee of the House of Representatives, Lloyd Blankfein, Goldman’s chief executive, said the group was “grateful for the government’s extraordinary efforts and the taxpayers’ patience”.

“While we regret that we participated in the market euphoria and failed to raise a responsible voice, we are proud of the way our firm managed the risk it assumed on behalf of our clients,” he added.

The FDIC set up the plan to guarantee bonds of up to the three years in maturity last year when the credit crunch threatened to starve financial groups of funding.

The move helped banks to raise more than $263bn in debt at below-market interest rates, according to Dealogic. But as credit markers thawed and banks became eager to free themselves from the tough rules that came with the government aid, the authorities told them they had to raise debt outside the FDIC plan before they could repay Tarp funds.

The FDIC also introduced an additional fee for banks using its guarantee as a way of weaning institutions off the subsidised bonds.

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Israel reconsidering rationality of visa-free trips for Ukrainians

17.06.2009, 02.42

TEL-AVIV, June 17 (Itar-Tass) – Israel is reconsidering the rationality of a mutual renunciation of travel visas with Ukraine in the wake of the economic crisis, Israeli Minister of Tourism Stas Misezhnikov told a news briefing in Jerusalem Tuesday.

Although the abolition of travel visas for tourists between Israel and Russia has proved efficacious in the conditions of the crisis, the situation with Ukraine is somewhat different.

“The abolition of travel visas for Russian tourists proved efficacious, since that country has felt a much smaller damage from the crisis than other European countries and, by and large, the curve of the demand for tourism did not suffer as much as in Ukraine where the middle class was impoverished,” Misezhnkov said.

“That’s one of the reasons why the Israeli Foreign Ministry is currently reviewing the rationality of visa-free traveling for the Ukrainians,” he said. “As for Russia, the situation is different.”

An agreement on visa-free mutual trips by Russian and Israeli tourists went into effect in September 2008.

Soon after that, the Israeli Foreign Ministry said Ukraine would be the next country in the post-Soviet space it would hold talks with on the abolition of visas.

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’Dairy problem’ btw Russia, Belarus settled, says minister

17.06.2009, 04.23

MOSCOW, June 17 (Itar-Tass) – Russia and Belarus have rounded up talks on the ‘dairy problem’ and have reached an agreement that both sides find acceptable, Russian Agriculture Minister Yelena Skrynnik said late night Tuesday after talks with Belarussian officials.

“We ended our consultations and talks at an encouraging note and signed an agreement acceptable for both countries,” she said.

Joint efforts helped the countries to agree on zero imports of powered milk from Belarus in the second and third quarters of the year.

This means that Russian dairy factories will buy powdered milk from Russia producers in the period of ‘big milk yields’, Skrynnik said adding that this will make it possible to rule out the situations of powered milk sale at dumping prices.

“Simultaneously, Russia will increase the imports of Belarussian curdles, cheese and butter in line with the market demand in this country,” she said.

Skrynnik indicated that the two sides “worked out the mechanisms of control over the agreements, which they will observe scrupulously.

“We realize that Russia and Belarus are brotherly nations and they must develop trade but it should be mutually beneficial, “ she said.

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Belarus ready to suspend powdered milk exports to RF for 6 months

15.06.2009, 15.22

MOSCOW, June 15 (Itar-Tass) - Belarus has expressed readiness to suspend powdered milk exports to Russia for six months, Russian Agriculture Minister Yelena Skrynnik told a meeting of the government’s presidium on Monday.

“Today we received a verbal proposal from Belarus to stop the import of powdered milk for six months, for the second and third quarters – this is the season of large milk yields,” she said.

“This is a good proposal for us. It will give an opportunity to our agricultural producers to sell Russia’s milk at adequate and acceptable prices,” Skrynnik said.

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Medvedev calls for Chinese investment in Russia


MOSCOW, Jun 17 (Prime-Tass) -- Russian President Dmitry Medvedev on Wednesday called for Chinese investment in Russia, ITAR-TASS reported.

"We paid considerable attention to the subject of investment cooperation," he said at a meeting with his Chinese counterpart Hu Jintao. "Both Russia and China seek to achieve a qualitative breakthrough in this field."

Chinese companies are prepared to invest in Russia's electric power, timber processing, and transportation industries, Medvedev said.

Medvedev also called for cooperation in the natural gas and coal industries.

Commenting on other issues, Medvedev said that Russia and China would consider promoting the use of the ruble and the yuan in bilateral trade settlements.

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Ukraine glorifies Nazism and defames Great Patriotic War in new history books
16.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/world/ussr/107780-ukraine_nazism-0

New textbooks on history are going to be published in Ukraine in the nearest future. Ukrainian officials from the Ministry for Education and Science said that the word combination 'Great Patriotic War' would not be mentioned in the new books and would be replaced with 'Second World War.'

Ukrainian nationalists from the Organization of Ukrainian Nationalists, who fought against the Red Army, were labeled as the fighters of the national movement for liberation in Ukraine . What about their cooperation with Nazi Germany?

Deputy head of Ukraine’s Ministry for Education and Science, Pavel Polyansky, said that there was nothing presumptuous about it.

“Everything is based on documents. We do not estimate anything in our textbooks. When we speak about Hitler’s Nazi Germany, we do not use such epithets as ‘anti-human dictatorship,” he said.

The official stressed out that schoolchildren were free to discuss the subject of Ukrainian nationalists at classes. However, his remarks about the absence of any estimations in the new textbooks contradicted to the official press release from his ministry. “The Organization of Ukrainian Nationalists is a movement for liberation,” the document runs and mentions nothing about their cooperation with Nazis.

Until recently, the authors of textbooks on history in Ukraine tried not to write anything about the cooperation of the Ukrainian Nationalists with Nazis. President Viktor Yushchenko said that the organization was struggling both against the USSR and Nazi Germany. However, there is not even a document to prove that.

Nowadays, Ukrainian authorities say that those who cooperated with Nazi Germany should be labeled as national heroes. If the new textbooks were based on real documents, they would obviously unveil the truth about the role of Ukrainian nationalists in the war.

However, the Ukrainian authorities prefer to be neutral about Nazi Germany, which means that Ukraine attempts of glorify Nazism. Yushchenko would be jailed for such textbooks in Germany or Austria.

Read also: "Ads praising Nazi WWII division pop up in Ukrainian town"

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Moscow metro to introduce women-only carriages and VIP trains?
17.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/russia/history/107791-moscow_metro-0

The Moscow metro is not going to follow the example of Beijing authorities to introduce women-only carriages to prevent the sexual harassment of women.

“We have never considered such a question,” the chairman of the press service of the Moscow metro, Pavel Sukharnikov, told RIA Novosti.

The official added that there were no complaints from female passenger of the metro. However, this subject receives a lot of attention on the Russian Internet. Many bloggers write on their web-pages that every woman was subjected to sexual harassment in public transport at least once in her lifetime.

Psychologists say that public transport provides a perfect environment for that: many people, availability and an opportunity to avoid punishment. Up to 40 percent of female passengers of the Moscow metro were subjected to sexual harassment.

Dmitry Gayev, the chairman of the Moscow metro, previously said that there would be no VIP carriages in the underground. The idea to introduce such carriages appeared in St. Petersburg.

“I’ve heard those rumors about VIP trains and VIP carriages in the St. Petersburg metro. The subject was discussed actively, but I can officially reject the information,” he said.

“The metro is an open system of transportation, where all people are equal, just like they are in a sauna. If you’re stuck in a traffic jam, leave your Bentley and ride the metro,” Gayev said.

Dmitry Gayev also said that there would be neither bathrooms nor garbage cans in the Moscow metro.

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Oil Age ends in about 50 years?
16.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/business/finance/107778-Oil_Age-0

The world has enough oil reserves for 42 years at current production rates.

This was announced Thursday in a report of British Petroleum Ltd, Bloomberg.com wrote.

"Fossil fuels will remain the dominant source of energy well into the future", British Petroleum Ltd Chief Executive Officer (CEO), Tony Hayward, said at a presentation in London.

Global proved oil reserves fell last year, the first drop since 1998, led by declines in Russia, Norway and China, according to BP Plc.

Oil reserves totaled 1,258 trillion barrels at the end of 2008, compared with a revised 1,261 trillion barrels in 2007, BP said in its annual Statistical Review of World Energy Tuesday.

"Declines in Russia, Norway, China and other countries offset increases in Vietnam, India and Egypt," BP said on its Web site.

BP Ltd and other oil companies are struggling to replace reserves as access to deposits becomes harder, and older fields in places like the UK and Mexico are depleted.

Russia passed a law in 2008 that limits foreign ownership in some of the country's biggest energy and metals deposits.

Middle East countries, which hold 60% of global reserves, restrict access for international companies, novinite.com reports.

However there is a different point of view expressed by The Australian.

“All of that looks pretty encouraging, particularly as last year's ratio of reserves to annual production stood at 42 times. In the simplest terms, that ratio means global conventional oil reserves will last 42 years if production keeps going at current levels and there are no new discoveries.

That's the good news, but on the flipside there's a lot of muttering in the oil industry about some developing nations' tendency to overstate their reserves for political purposes.

Against that, oil extraction technology is improving all the time and the "proved reserves" numbers are meant to refer to oil that is readily extractable by existing methods. In the simplest scenario, drillers can now send wells out horizontally to do a much more thorough job of extracting oil from existing fields than they did, say, 10 years ago.

That's clearly a plus. But back on the negative side, there's a difference between proven reserves and economically extractable reserves, since some deeper fields aren't worth exploiting unless oil is closer to $US80 a barrel than $US30. With the crude price now at the upper end and rising, that will increase the amount of economically recoverable oil. Miners would say it's lowering the cut-off grade.

Conclusion? We won't run out soon and the final date for the Oil Age will be put back further and further as the price rises. Don't bank on the tar sands, meanwhile, since there's another dimension: CO2 emissions. Converting tar sands to oil releases huge amounts of CO2 and there's no current technology available to stop that. Then again, there could be one out there.

All of which suggests we might still be arguing about the end of the Oil Age in 50 years. Let's hope that by then it will all be hypothetical thanks to the development of other energy sources”.

Click business/story/0,28124,25635024-5005200,00.html" target="_blank">here to read the full text of the article.

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Russian scientists found connection between Alzheimer's disease and sense of smell
17.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/science/health/107787-Alzheimer_disease-0

Alzheimer's disease and the sense of smell are closely connected.

The Russian scientists who have been working on establishing a connection between the sense of smell and the development of certain diseases came to conclusion that the distortion of smell perception may signal the beginning of Alzheimer's disease.

“Our studies give doctors an opportunity to diagnose Alzheimer's disease at its earliest stage,” says Dr. Natalia Bobkova from the Russian Academy of Sciences.

“Alzheimer's disease is one of the main problems which the scientific community is facing today. Despite huge investments and scientific efforts taken around the world the number of people suffering from this disease is growing. About one percent of the population in developed countries and about 15 percent of people over 65 are suffering from Alzheimer's disease,” says Natalia Bobkova.

One of the most important parts of modern neurology is studying the factors which lead to brain degeneration. Alzheimer's disease is a typical example of such a pathological process. This process leads to complete personal degradation, memory loss and spatial disorientation. Today there are more than ten theories explaining the origin of this disease. According to the most popular theory, it is a specific beta-amiloida fiber that causes Alzheimer's disease.

Read also: “Treatment of Alzheimer's disease by new drug to be possible in several years”

Normally this fiber is present in the human body in microscopic proportions. If a person develops Alzheimer's disease, this fiber is accumulated in the brain forming plaques. Patients say that they usually feel changes in the sense of smell when the disease begins.

Russian scientists decided to investigate this hypothesis to find out whether there is a connection between the loss of the sense of smell and the degeneration process in the brain. Alzheimer's usually develops very slowly. That is why it is very important to create the model of the disease. And the Russian scientists have created it.

In their experiments on rats the scientists removed the rodents' olfactory bulbs and found out that the defects in the olfactory system of the rats triggered a fast development of Alzheimer's disease. They explain such consequences saying that the olfactory system is directly connected with such an important brain structure as hypocamp. There is no doubt that the hypocamp destruction leads to the development of Alzheimer's disease.

The model created by the Russian scientists allows not only to diagnose the disease, but to find the most appropriate medicine to cure it.

Read also: “A safe technique for the focused erasure of troubling memories”

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BRIC countries catch up and overtake G7

17:5617/06/2009

MOSCOW. (Oleg Mityayev, RIA Novosti economic commentator) – The Russian city of Yekaterinburg on May 16 hosted the first official summit of BRIC, a group comprising four countries showing the highest rate of economic growth – Brazil, Russia, India and China.

Russian President Dmitry Medvedev said in the wake of the summit that the event was aimed at promoting a fairer world order.

The BRIC nations currently account for 15% of the global economy and 42% of global currency reserves. These are important reasons for BRIC to have ambition to influence international economic and financial policies.

According to many estimates, emerging economies will the driving force of the expected global economic recovery – that is, they will bail out wealthier nations. Citigroup’s chief executive Vikram Pandit said at the St Petersburg International Economic Forum in early June that “China, India and Russia will become the engine of world growth for a while.”

Most estimates put China’s and India’s 2009 GDP growth at 6% and 4%, respectively, while the Group of 7 will still be in recession. The two fastest growing modern markets, China and India, are not heavily dependent on exports to industrially developed countries, but are developing independently due to booming internal demand.


Emerging economies linked to developed ones by currency and trade

However, most economists are convinced that emerging economies, BRIC countries included, are unable to develop independently of the industrialized nations. International trade and the global currency system are reportedly the two key reasons behind this unbreakable bond.

The need to reform the existing system of monetary management was a key issue in the run-up to the Yekaterinburg summit. All the BRIC countries put forth their own proposals about how to decrease the role of the weakened U.S. dollar in international trade and finance.

One proposal was to boost the role of SDRs (Special Drawing Rights), an international reserve asset issued by the IMF; another, a broader use of regional reserve currencies and their combinations; or the use of their own currencies for bilateral settlements.

However, shortly before the event, its participants seemed to recall that they kept a large portion of their currency reserves in dollar assets, and those assets’ further depreciation was the last thing they wanted.

As of last March, China has U.S. Treasuries worth $767.9 billion, Brazil $126.6 billion, and Russia $138.4 billion.


BRIC countries overtaking the West at different paces

Jim O'Neill, chief global economist at Goldman Sachs, who invented the term BRIC in 2001, has issued several forecasts since on the time these countries’ aggregate GDP exceeds that of G7, with each forecast putting the date closer. The latest one says this will happen by 2027, less than 20 years from now.

China’s economy will exceed the U.S. in size at about the same time, O'Neill predicts.

At the same time, however, the BRIC group has major discrepancies between its members. China and India are expected to show substantial growth even in 2009, the year marked by the deepest global recession. Brazil’s economy will be in stagnation, posting a 1% GDP decline, according to the same estimate, while Russia will suffer a deep fall, by over 6%.

Indeed China and India have objectively better prospects than Russia and Brazil. This difference is due to higher diversification of the two leading BRIC economies.

“China’s and India’s development is fuelled by a steadily growing internal consumer demand and state investment,” Maxim Simagin, analyst at the Alfa Capital asset management company, told RIA Novosti. “Russia and Brazil are two export-oriented, commodity-based economies. Brazil’s economy is even more diversified than Russia’s because the latter is heavily dependent upon exports of natural gas, oil, metals and fertilizers, while Brazil has in addition a developed financial sector, agriculture, manufacturing and services,” he added.

The term BRIC primarily refers to the ever-growing clout of the world’s largest emerging economies, not to a political bloc. Therefore, that the group’s members are developing at different rates does not mean this new driving force of the global economy is going to become weaker.


The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.