Mutabbal's Diary

The demise of the dollar

2009-10-06T01:30:00.000-07:00

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
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The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Sean O'Grady: China will overtake America, the only question is when

Tuesday, 6 October 2009

Few things would be more powerfully symbolic of the shift in the balance of global economic power than to have oil traded in the Chinese renminbi rather than the American dollar.

True, no one is going to price a barrel of West Texas Intermediate Crude in renminbi tomorrow. But you can see how that could change. Oil is traded in dollars for economic reasons – not sentimental ones. The oil business pretty much started in the US (vividly portrayed in the film There Will be Blood), the giant oil companies are still mostly American, and the US has long been the world's largest consumer, importer and one of the largest producers of oil. The presidency of George W Bush offered ample evidence of the intimate connections between politics and oil. And the dollar is easily the most traded currency in the world. As such, it makes sense to trade oil in dollars.

Yet the financial tectonic plates are shifting – fast. Yesterday the president of the World Bank, Robert Zoellick, articulated what must be weighing on the minds of many Western policy-makers. A legacy of the current crisis "may be a recognition of changed economic power relations". In other words, the recession has accelerated the rise of China. The brutal truth is that for most of the next decade China's economy will grow by more than 10 per cent a year; America's by less than 2 per cent. China will soon be the world's largest economy, and largest creditor nation, a position enjoyed by a pre-eminent America in the 1950s. China will also be the largest consumer of oil, which will help push trading in it and other commodities towards a "basket" of currencies.

Now America is the world's greatest debtor, she can no longer sustain her role as protector of the world's only reserve currency in the long term. The humbling of Wall Street was proof that the American system was not invincible. Suddenly, a G20 embracing China, India and the other emerging powers is the only forum that matters. China has helped bail out our banks. Spats with the Americans and Europeans are set to grow more bitter. Yesterday the head of the IMF, Dominique Strauss-Kahn and the president of the European Central Bank, Jean-Claude Trichet, resumed their attack on the value of the yuan. Next will come an increasing US resentment at the vast debts built up with China, and, in turn, Chinese nervousness about their long-term worth.

And that is the paradox. China holds approaching $3 trillion in dollar assets, so she cannot afford to see the dollar collapse. Longer term, China does want to become less reliant on the dollar as a place to keep its savings. America needs China to buy her Treasury bills; and China needs America to buy her exports. They are like two drunken giants leaning on each other. Yet a sobering reckoning of some sorts seems inevitable; and it is difficult to see how both can be winners.

Leading article: The end of the dollar spells the rise of a new order

This radical proposal is a reflection of a changing economic world

Tuesday, 6 October 2009

Last autumn's global financial crisis set off an economic earthquake. And we are still feeling the tremors. The latest sign of the ground shifting beneath our feet is our report today of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.

It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year's meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.

It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls. For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.

But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.

But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order.

We should not be sentimental for the dollar. It makes economic sense for world trade to be conducted in a variety of currencies. Relying on one only has the advantage of clarity, but it also creates instability if the economy that underpins it faces uncertain prospects.

Yet we need to understand that exchange rate volatility is a symptom, rather than a cause, of what truly ails the world economy. The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs. Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.

A gradual move away from the dollar makes sense. But without a commitment from world governments – both in the rich and developing world – to reduce these destabilising global trade imbalances we will enter an uncertain new era; and one that could yet make us pine for the days of the dominant greenback.

A wealthy, insular Syrian Jewish enclave in Brooklyn reels after rabbis' arrests

2009-10-05T07:44:00.000-07:00

OCTOBER 3, 2009

A Community, Shaken
A wealthy, insular Syrian Jewish enclave in Brooklyn reels after rabbis' arrests

By LUCETTE LAGNADO

Brooklyn, N.Y.

When Morris Setton was a young man here, he and his brother Joshua went door to door selling bags of pita bread to the crush of Jewish immigrants from Syria and Egypt.

It proved to be an excellent business venture. The brothers, Jews of Syrian descent who emigrated from Cairo in the late 1950s with $5 in their pockets, found a community along the elegant Brooklyn boulevard of Ocean Parkway that disdained American white bread and was homesick for the tastes and scents of the Middle East—the spices, flaky pastries, black olives, rose water, cheeses and nuts the immigrants were used to savoring, and which were missing from their new lives.
Brooklyn's Syrian Jewish Community

Morris Setton, co-owner of Setton International Foods .

Fifty years later, Mr. Setton, 68, is America's King of Pistachios. He is the co-owner of a vast enterprise, Setton Farms, that has a large warehouse in Long Island and farms and processing plants in California. He can live anywhere, but has remained planted in the corner of Brooklyn where he started, at the heart of what he calls "The Community"—a little-known enclave of more than 75,000 Jews from Syria and other Arab lands, many of whom have prospered in America while sustaining strong ties to the cultural traditions of homelands that today are inhospitable to Jews.

That community has been reeling since the July arrests of three of its major rabbis on charges of money-laundering, following a sting using a federal government informant. Among those caught in the dragnet was Saul Kassin, the 88-year-old Chief Rabbi, a revered figure to Sephardic Jews for decades. Rabbi Kassin and two other rabbis—Eliahu Ben Haim and Edmund Nahum—are alleged to have laundered a total of more than $1.7 million, according to the U.S. Attorney's office for the district of New Jersey. The funds allegedly were laundered through charities and religious institutions they controlled in Brooklyn and Deal, N.J., the seaside resort where many Syrian Jews summer. Rabbi Kassin, through his lawyer, emphatically denied the allegations, as did Rabbi Nahum and his lawyer. Rabbi Ben Haim's lawyer, Lawrence Lustberg, said he was reviewing the evidence in the case and declined to comment further for this story.

The corruption case involved a government informant who purported, among other cover stories, to be dealing in fake Prada and Gucci handbags and wore a wire for the Federal Bureau of Investigation. He allegedly recorded the three rabbis agreeing to help him launder funds through their charities and take a percentage, according to a federal complaint. To the dismay and shock of the community, the informant was widely reported to be Solomon Dwek, one of their own, the son of another major local rabbi. Mr. Dwek's lawyer did not return repeated calls seeking comment.

Acting U.S. Attorney Ralph Marra Jr. compared the rabbis to "crime bosses" and accused them of using "entities set up to do good works" to launder millions. To defend the frail Chief Rabbi, his family reached out to Gerald Shargel, the prominent Manhattan criminal lawyer who represented the late Mafia don John Gotti and Sammy "the Bull" Gravano, as well as white-collar criminals such as Marc Dreier.

The arrests have shone a harsh light on a group that has resisted assimilation even as its members achieved wealth and success in America. A community that was always intensely private and closed now views outsiders with suspicion that borders on paranoia.

I grew up in The Community, albeit on the poor side—in Bensonhurst, the rather modest area where Sephardic Jews lived before they left for much swankier digs on Ocean Parkway and in Deal. My father was born in Aleppo, Syria; I was born in Cairo. Two years ago, I published a memoir about my father and the community. When I was a little girl new to America, my world revolved around my family and my small Sephardic temple. Rabbi Kassin was one of my Hebrew school teachers; another was Rabbi Baruch Ben Haim, the father of Rabbi Eliahu Ben Haim, Once, in class, I asked Rabbi Kassin why the Messiah couldn't be a woman. "Because he can't," he replied tersely.

The arrests spotlighted a world of tremendous wealth, one that had prospered since I left for college in the 1970s. A roster of some of the Syrian Jewish community's most successful members includes the Nakash brothers, who founded Jordache Enterprises, and the Gindi family, who started Century 21, the popular department-store chain in New York. Duane Reade, the drugstore chain, was founded by the Cohen brothers, who grew up in the Syrian community in Brooklyn. One of the community's top guns is Joseph Cayre, chairman of Midtown Equities, who is one of the leaseholders of the World Trade Center site and an owner of Barneys department store buildings in New York, Chicago and Los Angeles. Also from the community is Joe Sitt, chairman of Thor Equities, which owns the Palmer House Hilton in Chicago and several acres of Coney Island.

"I suspect there's more wealth on Ocean Parkway than there is in Beverly Hills," says Steve Solarz, the area's former congressman.

The community's ornate mansions aren't concealed behind hedgerows or gates as they are in the Hamptons—the wealth is on display for everyone to see. Along Ocean Parkway, houses are sometimes built right up to the lot lines. In Deal, there are Mediterranean-style villas with sweeping vistas of the ocean and stately Victorian homes with porches and Hollywood-style swimming pools.

Deal's social season is a swirl of engagement parties, bar mitzvahs, circumcision ceremonies and get-togethers at the Deal Casino, a club with a massive swimming pool and private beach. Weddings are elaborate affairs, some with 1,000 guests or more, held at Magen David of West Deal, the largest and most elegant synagogue.

Constant charity events are also a part of the social scene. Fund-raisers and raffles and auctions raise money for an array of causes: infertile couples, cancer-stricken children, impoverished adult cancer victims, religious schools, even brides too poor to afford a wedding trousseau. Tithing, or giving at least 10% of one's wealth to charity and your synagogue, is the practice.

There are also pockets of poverty. The community has been hit hard by the economic downturn, and many of its members in retail have seen business evaporate.

Rabbis were traditionally entrusted to see that money given for charity reached the needy. Wealthy community members who are fond of Rabbi Kassin say that he constantly approached people to help this needy person or that.

In the U.S. Attorney's complaint, Rabbi Kassin is alleged to have laundered more than $200,000 from the informant through his charity, while his nephew, Rabbi Ben Haim, is alleged to have laundered some $1.5 million; Rabbi Nahum is alleged to have laundered $185,000.

Mr. Shargel says the charges are baseless. "Rabbi Kassin did not launder money and never intended to violate any law—he was doing charitable work," he says, adding, "Rabbi Kassin didn't know from Prada and he didn't know from Gucci."

Any money collected "was for the people, and it was written down, and it was in the book, check by check," says Rabbi Nahum. He remains in his position at his synagogue. "At no time did Rabbi Nahum receive any personal gain related to these transactions and all monies received went to the charities," says his attorney, Justin Walder.

The community is home to several modern philanthropic institutions with lay boards, but a more antiquated system, where charitable funds are controlled by individual rabbis, has persisted. Rabbi Elie Abadie of the Edmond J. Safra synagogue in Manhattan says that the community also maintained "a mom and pop shop" style of philanthropy, not always subject to "oversight or checks and balances," which made its charities more vulnerable to allegations of improprieties. David G. Greenfield of the Sephardic Community Federation says there will now be a focus on "transparency," lay boards and "accountability."

Behind the scenes, there are deep divisions in this tightly knit community. Some are so shaken by the allegations that for the first time they say they are questioning their faith in the rabbis and calling for a thorough house-cleaning. Others—particularly more conservative, ultra-observant members of the community—are rallying around the rabbis and believe them to be innocent victims.

The division reflects a broader and more long-running split that's visible on the streets of Brooklyn and Deal. On Norwood Avenue, Deal's main shopping street, some Syrian-Jewish women wear wigs and long skirts—traditional religious garb that stands out in a community where many men and women pride themselves on dressing at the height of fashion.

Nostalgia for the Middle East suffuses the Sephardic community, and focuses on the ancient Syrian city of Aleppo. Aleppo produced legions of influential rabbinical scholars, and the community had strict customs about how to live, how to pray, how and when and whom to marry. It was also a city on a major trading route, which meant that Syrian Jews worked and interacted with Muslims and other groups, says Rabbi Abadie.

"On the one hand, the community was close-knit, and on the other it was worldly. They did not see a contradiction between their religion and close-knit family relationships with being cosmopolitan," he says.

That ability to function in the larger world served Syrian Jews wherever they settled. Many were adept, aggressive businessmen, their skills honed in at the Aleppo souk, and those talents have also been handed down through the generations.

The community has tried to hold onto to the traditions of Aleppo, or "Halab," as they call it, using its Arabic moniker. Even third- and fourth-generation Syrian Jews in Brooklyn pepper their conversations with Arabic expressions that hearken back to a country most never really knew. "Hazeet," they'll say of a man who has suffered a misfortune, "poor fellow." An inappropriate act is "eyb," or shameful.

From selling pita bread in the early 1960s, Mr. Setton and his brother by 1967 had earned enough to open the first Middle Eastern grocery on Kings Highway, a shopping strip located by Ocean Parkway. Setton Oriental Foods carried string cheese the brothers made by hand, dried fruit, spices and all kinds of nuts, from roasted hazelnuts and watermelon seeds to almonds and pistachios.

"When you had guests, you always gave them some pistachios, it was what you offered first," Mr. Setton recalls.

Now, Mr. Setton's lone shop has given way to multiple groceries that compete to sell Oriental specialties. Many of the shopkeepers speak Arabic, and old-fashioned bargaining is advisable.

Large families crowd restaurants like David's, a popular eatery that serves Middle Eastern cuisine—lentil soup pungent with cumin, skewers of ground beef called kufta kebab, bowls of savory okra stew—all prepared in keeping with strict Jewish dietary laws. A small bakery, Mansoura's, features trays of honey-drenched baklava.

"The Syrian food in Brooklyn is better than the Syrian food in Damascus," says Mr. Solarz, the ex-congressman, who has sampled both.

Nearby, on Ocean Parkway, synagogues are filled morning and evening with worshippers who pray and chant hymns in the ancient melodies and cadences of Syria and Egypt. Attendance is booming.

"You walk around and you will hear Arabic," Mr. Setton says on a tour of his old pita route. He can rattle off the names of who lives in every house—his old customers—though most are gone, the homes occupied by their children or young families. His own children live within a block or two of his home. His store, now called Chalouh International Foods, is today run by a Syrian Jew who emigrated from Damascus in the 1990s. A stone to guard against the evil eye, called a "shabah," is a brisk seller at $2.

On a Friday morning in August, long lines formed at the kosher food stores lining Deal's Norwood Avenue. Piled high on the tables of Kings Highway Glatt were packages of kibbe, the delicious little meatballs stewed in sour cherries or mushrooms that are the staple of Syrian cuisine and the centerpiece of the Friday-night sabbath meal. There was yebrak—grape leaves stuffed with rice and meat—and artichokes medias—artichoke hearts stuffed with ground meat and covered with sauce.

Older generations of Syrian women made these dishes from scratch, but these days, women line up to scoop up multiple ready-made packages of these delicacies. Some this summer were dressed for the beach, in pants or shorts and revealing halter tops. Others were in long skirts and long-sleeved blouses, their hair covered with a wig or a hat.

Come Friday, every woman in the community is busy making kibbe hamda, an aromatic dish that involves preparing a lemony broth, then adding garlic, mint and other spices, then throwing in vegetables and the meatballs.

"On Fridays you can drive down the streets of Deal or Brooklyn and know that every house has that kibbe hamda cooking," says Poopa Dweck (no relation to Solomon Dwek), a resident of Deal and author of the cookbook "Aromas of Aleppo." "You feel it—you smell it—the mint and the garlic and the kibbe that is boiling and everyone telling everyone not to be late."

Write to Lucette Lagnado at lucette.lagnado@wsj.com

F1 faces split as eight teams break away

2009-06-19T07:13:00.001-07:00

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

2009-06-18T04:34:00.001-07:00

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

2009-06-17T07:33:00.000-07:00

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
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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.

Israel Named Developed Market at MSCI, Korea Isn’t (Update3)

2009-06-16T04:59:00.000-07:00

Israel Named Developed Market at MSCI, Korea Isn’t (Update3)
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By Tal Barak Harif and Shinhye Kang

June 16 (Bloomberg) -- Israel was raised to developed- market status at MSCI Inc., whose stock indexes are tracked by investors with about $3 trillion in assets. South Korea, which was under review for an upgrade, remained an emerging market.

Israel, with $134.5 billion in stock-market value, was the 14th-biggest nation classified as an emerging economy by the New York-based firm, according to data compiled by Bloomberg. Korea will be evaluated for the developed-markets designation again in 2010, MSCI said.

The TA-25 Index of Tel Aviv shares has surged 30 percent in 2009, beating 20 out of 23 developed markets tracked by MSCI. Israeli technology and chemical companies may attract increased investment, according to Michael Wang, London-based strategist at Morgan Stanley.

“They deserve that distinction,” said Marc Tommasi, the Fairport, New York-based managing director of global strategies at Manning & Napier Advisors, which oversees $3.6 billion of equities outside the U.S. Becoming a developed market “opens countries to a broader universe of potential investors.”

Israel will shift in 2010. MSCI also said it will consider making Taiwan a developed market. The firm announced that the United Arab Emirates, Qatar and Kuwait will remain frontier markets.

South Korea

South Korea wasn’t classified as a developed market because its currency isn’t fully convertible and its stock market’s real-time data didn’t meet the requirement for the change, MSCI said.

“Investors have continued to highlight some significant accessibility issues for Korea which are not characteristic of developed markets,” MSCI said.

The benchmark Kospi index fell for a second day, declining 1 percent to 1,398.63 as of 12:03 p.m. in Seoul trading. The measure has risen 25 percent this year, lagging behind the gain in MSCI’s gauge of emerging markets.

“The South Korean stock market wasn’t interested in the MSCI upgrade, so I don’t think it will negatively affect market,” said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management Co., which manages $9 billion in assets. “Global money is likely to focus on emerging economies, which will recover faster than developed markets. I cannot see many benefits from the upgrade under the current situation.”

Emerging-Market Rally

The MSCI Emerging Markets Index of 22 developing nations has surged 34 percent this year as oil and metals prices rallied on signs the worst of the global recession is over, boosting the outlook for commodity producers. The MSCI World Index of 23 developed countries has climbed 4.9 percent, while the MSCI Frontier Markets Index that includes companies from 25 nations gained 14 percent through June 12.

Greece, which became a developed market in 2001, was the last nation to win that designation at MSCI.

Valuations on the TA-25 have more than doubled since the fourth quarter. Using the prior 12 months of operating profit, the price-to-earnings ratio for the TA-25 has jumped to 24.5 from 9.6 in November.

Israel’s economy is forecast to expand 0.3 percent in 2010, after shrinking 1.7 percent this year, the International Monetary Fund said in its April World Economic Outlook report.

The TA-25 Index fell 3.3 percent yesterday, the most in 2 1/2 months. Emerging-market investors prevented from owning the nation’s shares should it become a developed market may have sold stock in anticipation of MSCI’s change.

“We expect a significant negative impact on the TA-25,” Daniel Rapoport, the head of trading at Excellence Nessuah Investments Ltd. in Ramat Gan, Israel, wrote in an e-mail following MSCI’s announcement.

Selling by emerging-market investors barred from owning stocks in developed markets will probably exceed purchases from asset managers who specialize in the latter, Rapoport wrote.

“Moreover, while we expect the outflow to start immediately, the inflows will commence only after May 2010 when the implementation starts officially,” he wrote. “This could quickly create a significant downward pressure on the index.”

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Madoff victims spew avalanche of insults

4 hours 20 mins ago
AFP

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Calling him a "murderer" and a "monster," more than 100 victims of Wall Street swindler Bernard Madoff have asked the judge who will sentence him on June 29 for the maximum sentence. Skip related content
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A total of 113 victims of the fraud have written letters and emails to US District Judge Denny Chin, almost all calling for a life prison term and some demanding even further punishment.

Chin could sentence Madoff, 71, to up to 150 years in prison. The former chairman of the Nasdaq stock exchange operated the fraud for decades, conning investors into depositing billions of dollars that were then used to pay fictitious returns.

"Please make sure the facility in which he rots is extremely uncomfortable," wrote Jesse Cohen, a businessman from New Jersey who lost all his savings to Madoff's massive Ponzi scheme, in one of the letters released by federal prosecutors.

Summarizing the views of many victims, Ron Weinstein, 62, wrote: "This scum should never again see the light of day."

Madoff has been in jail since March after admitting guilt in the scheme, the biggest in Wall Street history and estimated to have involved around 61 billion dollars, of which only one billion has been recovered.

Natalie Erger, who described herself as "an investor sentenced by Madoff to a lifetime of financial ruin and emotional unrest," compared the financier to Adolf Hitler and Saddam Hussein.

Many of the investors were elderly retirees who thought their life savings were in safe hands.

Norman Feinberg, a 70-year-old retiree, said he had turned to Madoff because of his "impeccable reputation".

Carl and Alyse Kornblum, respectively 70 and 66 years old, wrote: "Can you believe as teenagers and school chums and young married we were once friends with Bernie and Ruth Madoff?

"I really can't believe Bernie could be such a sociopathic low-life!"

The angry words reflected the frustration and outrage of those who relied on Madoff for years to handle their funds, ranging from modest life savings to large fortunes.

"You are a murderer," wrote investor Phyllis Lerner, also calling Madoff, a member of New York's elite Jewish society and a frequent fixture at golf courses in Palm Beach, Florida, a "rapist" who committed "generational theft."

Jackie Stone called the former Wall Street star a "killer" and a "destroyer."

"I cry every day," she wrote.

William Cohen, another investor, said Madoff "is a psychopathic lying egomaniac who is still trying to feather his nest with a more moderate sentence."

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日本製紙グループ本社、四国コカ・コーラを完全子会社に、10月に株式交換

2009年6月16日

この記事を携帯へ転送

　日本製紙グループ本社は6月15日、傘下の飲料メーカー、四国コカ・コーラボトリングを10月1日付けで完全子会社にすると発表した。四国コカ・コーラの経営環境が厳しくなっているため、経営基盤の強化を図る。四国コカ・コーラはこれに先立つ9月25日に東京証券取引所で上場廃止になる見込み。

　事業会社の日本製紙が保有する四国コカ・コーラの発行済み株式54.93％分を、6月18日付けで持ち株会社の日本製紙グループ本社が取得する。その後、10月1日付けで日本製紙グループ本社と四国コカ・コーラの株式交換を実施する予定。四国コカ株1株につき日本製紙グループ本社株0.39株を割り当て交付する。

　これに伴い日本製紙グループ本社は新株400万5368株を発行する。同社の発行済み株式は6月15日時点で1億1225万3463株。

　四国コカ・コーラは2009年1―3月期の連結業績で3億700万円の純損失を計上し、前年同期から赤字幅を拡大した。2009年12月期通期は最終損益は3億5000万円の黒字を見込むが、事業地域の四国4県では人口減が進むなど、経営環境は厳しくなっている。

　日本製紙グループは四国コカ・コーラを完全子会社にしたあと、工場の操業改善ノウハウや技術を提供するほか、管理／間接部門の共有化を進める。また今後も厳しい経営環境が続きそうな国内製紙事業を、飲料関連事業の強化で補完する狙いもある。

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統一教会系ＮＰＯイベント、外務省が後援（1/2ページ）

2009年6月16日15時4分

　世界基督教統一神霊協会（統一教会）の関係者が運営するＮＰＯ法人のイベントを外務省が後援したり、そこで自治体の首長や現役官僚が講演したりしていたことがわかった。統一教会をめぐっては、脅迫的な手法で高額商品を売りつける霊感商法との関連が長年問題になっており、最近も福岡と東京で相次いで警察当局に摘発されている。

　ＮＰＯは「未来構想戦略フォーラム」（東京都武蔵野市）。０２年に発足し、０７年に都認証ＮＰＯとして法人化。「日本の未来ビジョンの構築」を目的に毎月、講演会やシンポジウムを開いている。

　共同代表２人のうち実務を担う男性は、統一教会系の「世界平和教授アカデミー」の元事務局長。副代表の男性は、０５年に同教会系の学会の発起人となった。事務局長には、０８年に同教会系の「世界平和青年連合」の支部長となった男性が就いている。さらに、フォーラムが主催するイベントでは、統一教会系の「天宙平和連合」用の受付を会場に設けるなどしている。

　外務省は昨年１２月、このＮＰＯが中心になって開いたシンポジウムを後援。０４年７月の同ＮＰＯ主催の会合では現職の大使が講演した。毎月の講演会でも杉並区の山田宏区長や内閣府、農林水産省の官僚が講演したり、武蔵野市が後援についたりしている。

　後援について、外務省は「規定に従った申請書が出され、趣旨も問題なかった。どんな団体かは、調べていない」。山田区長は「統一教会と関係があると分かっていれば、講師を断っていた」とする。一方、武蔵野市は「後援申請団体の役員に宗教を尋ねることは、信教の自由の点で問題がある。どうすべきか判断が難しい」としている。

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偽造証券？：１３兆円分密輸未遂で拘束の日本人　伊が釈放

　【コモ（イタリア北部）藤原章生】日本人男性２人が今月３日、計１３４０億ドル（約１３兆円）相当の米有価証券をイタリアからスイスに持ち出そうとしたとして、イタリア当局に拘束された事件で、所持していた証券は偽造の可能性が高いことが１５日までの毎日新聞の取材で分かった。また、今年４月上旬にも日本人が関与したとみられる別の偽造証券の押収事案があったことが判明。イタリア財務警察とコモ検察庁は、相次ぐ「巨額」偽造証券の背後に日本人を含む組織的な関与があるとみて捜査している。

　同検察庁は、在ローマ米大使館と連携し、押収した証券について調査。関係者によると、２人が所持していた米国債やケネディ債は「額面の大きさや発行年代が現存しない可能性が高い」という。イタリアの法律では、証券が本物の場合、２人には未申告輸出の容疑で巨額の罰金刑が科せられるが、偽物の場合、使用や提示がなければ処罰されないため、２人は事情聴取後に釈放された。在ミラノ日本総領事館は２人の所在を把握していないという。

　今年４月の事件では、日本人から依頼を受けたイタリア人男性が、額面２００億ドル相当の日本国債の偽造品をスイスに持ち出そうとして、財務警察に押収された。

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Italy to take three Guantánamo detainees

By Guy Dinmore in Rome

Published: June 16 2009 10:37 | Last updated: June 16 2009 10:37

Italy has stepped forward to help the Obama administration close its Guantánamo prison with a specific offer to take three detainees, but already the decision has led to dissent within Silvio Berlusconi’s centre-right coalition.

Barack Obama, US president, thanked the Italian prime minister in the White House on Monday for agreeing to accept “three specific detainees” from Guantánamo, which he intends to shut down by next January.

Mr Berlusconi’s offer was the first from an EU government following an agreement reached between the EU and the US on Monday on accepting detainees. The EU said it was up to each government to decide.

Italian newspapers reported that the three detainees were Tunisians. Officials in Rome were not able to provide immediate details on the agreement reached in Washington. It was not clear whether the three detainees would be released in Italy or imprisoned there.

Roberto Maroni, Italy’s interior minister and a member of the right-wing, anti-immigration Northern League, expressed his personal opposition to accepting detainees. He told Radio 24 that countries belonging to the Schengen open borders pact should only take detainees who would remain in prison.

Mr Berlusconi has been anxious to establish as good a relationship with the new US administration as the one he enjoyed with George W. Bush. Mr Berlusconi also offered to extend the deployment in Afghanistan of several hundred soldiers, Carabinieri and police instructors who have been sent for extra security over the coming election period.

Albania, a close US ally, was the first European government to take Guantánamo detainees, receiving five Muslim Uighurs who could not return to their native China for fear of persecution. Four more Chinese Uighurs were accepted by Bermuda, and 13 more are expected to settle on the Pacific island of Palau.

About 230 inmates still remain in Guantánamo, a US-controlled enclave in Cuba where the former Bush administration set up the prison in 2002.

Belgium, the UK, France, Ireland, Portugal and Spain have also expressed willingness to accept some Guantánamo detainees.

”This is not just talk. Italy has agreed to accept three specific detainees,” Mr Obama said on Monday.

Three Guantánamo detainees were transferred to Saudi Arabia last week, the US Justice Department said. Mr Obama is facing opposition in Congress to sending some detainees to prisons on US soil.

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Putin moves to heal Belarus rift

By Catherine Beltonin Moscow andStefan Wagstyl in London

Published: June 15 2009 17:41 | Last updated: June 15 2009 22:20

Vladimir Putin, Russia’s prime minister, moved to quash a diplomatic rift with Belarus on Monday after a dispute over milk imports threatened to harm relations between the former Soviet neighbours.

Tension between the two countries erupted over the weekend when Alexander Lukashenko, Belarusian leader, pulled out of a regional security summit in Moscow at the last minute.

Dmitry Medvedev, the Russian president, accused Mr Lukashenko of failing to act “as a true partner” after he said Moscow’s ban on Belarusian milk exports “effectively forces Belarusians to their knees”.

But on Monday Mr Putin told ministers, who had complained Mr Lukashenko was “over-politicising” the milk war, to be “more careful” in their statements. “Whatever happens, we are one family with Belarus. There can be all kinds of arguments and scandals in a family, but life takes its course and we need to work,” he said.

The outbreak of tension highlights the difficulties facing Moscow as it vies with the EU to cement its influence over former Soviet states and forge new economic and security ties.

A report published on Tuesday warns the European Union to increase its political and economic support for its eastern neighbours, including Belarus, or “face a ring of failing states and an increasingly active Russia rebuilding its sphere of influence”.

The European Council for Foreign Relations, a London-based think-tank, argues that the EU’s recently launched eastern partnership policy for the six countries – Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan – is not sufficiently dynamic as a response to the region’s political and economic crises. The authors call for country-specific support policies, including an urgent visa liberalisation.

Mr Lukashenko had been due to attend a regional security summit where participants, including Armenia, Kazakhstan and Kyrgyzstan, signed an agreement to create a regional rapid reaction security force to deal with terrorism and regional conflicts.

Mr Lukashenko said Belarus’ absence meant the agreement had no legal force.

The spat between Minsk and Moscow broke out just days after Mr Putin led a drive to agree a new customs union with Belarus and Kazakhstan, dropping Russia’s 16-year unilateral bid to join the World Trade Organisation in favour of a joint bid. The move was seen by analysts as part of Russia’s focus on building a regional power base.

Experts said Mr Putin would seek to keep a lid on the differences between Russia and Belarus as the customs union became a central goal.

“I believe the conflict will ease,” said Fyodor Lukyanov, editor of Russia in Global Affairs. “Russia will undertake all efforts to make sure the customs union goes through.”

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足利事件：県警本部長、菅家さんに直接謝罪へ　弁護団に意向伝える　／栃木

　「足利事件」の再審請求即時抗告審で、東京高裁に意見書を提出した菅家利和さん（６２）の弁護団は１２日、東京都内で記者会見し、県警の石川正一郎本部長が菅家さんに直接謝罪する意向を伝えてきたことを明らかにした。コメントでの謝罪から一転、県警トップが自ら直接謝罪する方針を示したことに、菅家さんは「許します」と語り、県警の姿勢を評価したという。

　県警は１１日、石川本部長名での謝罪コメントを発表したが、本人への謝罪の有無や時期については「適時適切に対応する」とし、明示しなかった。しかし弁護団などによると、同日夜、佐藤博史弁護士の事務所に県警から連絡があり、１２日朝、佐藤弁護士が県警に確認すると、「石川本部長は菅家さんに直接謝罪するつもりだ」などと伝えられたという。弁護団は日程を調整して、来週にも県警に予定を伝える方針だという。

　一方、県警刑事総務課によると、１１日夜に本部長コメントを弁護側にファクスで送付し、その後白井孝雄同課長が経緯を説明したという。しかし、石川本部長の直接謝罪について「コメントできない」としている。

Fears over US sovereign debts unfounded

2009-06-15T07:44:00.000-07:00

Fears over US sovereign debts unfounded

By Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ

Published: June 11 2009 18:35 | Last updated: June 11 2009 18:35

Fears of a crisis of confidence in the US sovereign debt market – and a subsequent dollar collapse – are unfounded, says Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ.

He acknowledges that concerns over the scale of US debt supply have been exacerbated by moves from some central banks to diversify out of US fixed income investments and into IMF bonds denominated in special drawing rights.

“However, this shouldn’t mask the reality, which is that foreign official institutions are buying more – not less – dollar denominated assets.”

Mr Halpenny notes the indirect bid at Wednesday’s Treasury auction of 10-year paper, a measure of foreign interest, was a healthy 34.2 per cent. He also says foreign exchange reserves are on the rise across Asia.

“Since the dollar began falling in April, the total increase in FX reserves held by the top eight Asian FX holders, ex-Japan and China, has been $70bn.”

But it is China’s dollar buying that has been most impressive.

“Since the collapse of Lehman Brothers, China has bought $171bn of US T-bills – 58 per cent of the total purchased by foreign official entities. March saw China buy $14.8bn of Treasuries, the second biggest ever monthly total.

“Instead of selling dollars, it appears foreign central banks are upping their holdings, which will ensure that talk of a dollar plunge remains just that.”

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天台座主：高野山を公式訪問　平安時代以降初
歓談後、笑顔で握手を交わす金剛峯寺の松長有慶座主（左）と天台宗の半田孝淳座主＝和歌山県高野町で２００９年６月１５日午後０時２０分、大西岳彦撮影
歓談後、笑顔で握手を交わす金剛峯寺の松長有慶座主（左）と天台宗の半田孝淳座主＝和歌山県高野町で２００９年６月１５日午後０時２０分、大西岳彦撮影

　天台宗（総本山・比叡山延暦寺＝大津市）の半田孝淳座主が１５日、高野山真言宗総本山金剛峯寺（和歌山県高野町）で営まれた「弘法大師降誕会」の法会に参列した。０５年の比叡山開創１２００年法要に当時の資延敏雄・金剛峯寺座主が比叡山を訪れているが、天台座主の公式訪問は平安時代以降初めてという。宗教協力の催しなどを通じ、金剛峯寺の松長有慶座主と半田座主が交流を深めたのがきっかけで実現した。

　高野山内の住職や信者ら約５００人が参列し、大師教会本部大講堂で営まれた法会で、両座主はともに一段高い内陣へ。弘法大師の稚児大師像に甘茶を掛ける作法を行った。その後、天台宗の一行は奥の院の弘法大師御廟（ごびょう）に参拝した。

　高野山真言宗は、通常「宗祖降誕会」と呼ぶ法会を、「宗祖は天台宗にもいる」と配慮して、この日は「弘法大師降誕会」と呼び変えた。両宗祖の空海と最澄は、唐（中国）で密教を学んだよきライバル。晩年は交流が途絶えたとされるが、天台宗務庁は「近世でも天台の僧が高野山で学ぶなど人的交流があると認識している」という。高野山真言宗宗務所は「今後も交流を深めていきたい」と話している。

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Czechs face painful spending cuts, warns PM

By Jan Cienski and Tony Barber in Prague

Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

The Czech Republic needs to make hard and painful cuts in spending if it is to rebound swiftly from the economic downturn, Jan Fischer, the prime minister, has warned.

The Czech Republic's finances are on an unsustainable path because of high levels of fixed spending, which unless corrected could hurt the chances of emerging swiftly from the economic downturn and delay entry into the euro, Mr Fischer says in an interview with the Financial Times.

"In the current economic situation we are suffering from a shortage of revenues. The biggest problem in closing the gap is compulsory expenditures, which account for about 80 per cent of the budget, much of that made up of generous social benefits," says Mr Fischer, a non-party technocrat.

"The government has a very limited manoeuvring space when it comes to the budget."

The Czech economy has slowed sharply owing in large part to a slump in exports to western Europe, particularly Germany.

The economy is open, with exports accounting for 70 per cent of gross domestic product. The finance ministry expects a contraction of 2.3 per cent for the year.

Last week Mr Fischer presented a three-year budget outlook that calls for spending cuts in all areas except for social payments and debt financing; the goal is for the shortfall not to exceed 170bn korunas ($8.9bn, €6.4bn, £5.4bn), or 5 per cent of GDP.

However, the finance ministry expects the deficit next year to be 5.1 per cent, compared with 4.5 per cent this year and only 1.5 per cent a year ago.

Revenues are expected to be 84bn korunas lower than foreseen in the budget.

"To be really stringent and conservative is going to be hard, it's going to be painful," says Mr Fischer, the former head of the Czech statistical agency who was selected as a consensus candidate for prime minister by the two leading parties after the unexpected fall of the centre-right Civic Democratic party government of Mirek Topolanek in March.

"If we allow the increase of our deficit, and our deficit goes to 7 per cent or even more, that would be really irresponsible, and this could . . . at least complicate our exit from the economic crisis," he says. Mr Fischer's government will present a budget in September, and final approval is likely after early parliamentary elections in October.

"I'm telling the politicians very clearly, it is up to you to begin the debate into the nature of expenditures, because from the long-term perspective this is not the way to go," says Mr Fischer. "This is a message to the politicians who will later administer the country."

The cuts being proposed by the non-partisan government are unlikely to be popular, but will probably stick after the elections because the new administration would be loath to let spending spin out of control, says Kamil Janacek, chief economist at Komercni Banka, a subsidiary of France's Société Générale.

"Both the big parties are prepared to let this interim government do the dirty work, which is to prepare a very austere budget," he says. Even keeping the deficit under 5 per cent of GDP is likely to mean the date of Czech entry into the eurozone will go back, admits Mr Fischer, the first realistic date being after 2015.

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Troubled Saudi group seeks talks with creditors

By Andrew England in Abu Dhabi and Patrick Jenkins in,London

Published: June 13 2009 03:00 | Last updated: June 13 2009 03:00

The troubled Saudi group owned by Maan al-Sanea is seeking talks with creditors in the UK and the Middle East as early as next week as it looks to restructure its debt.

In a letter sent to banks this week, Saad Group acknowledged the seriousness of the position of its companies and that some accounts have been frozen, bankers said.

An executive at one bank that had received the letter in the UK said meetings were now being arranged for next week. "We are 95 per cent sure that all creditors got this letter," he said.

The group's problems emerged after the Saudi central bank froze the personal accounts of Mr Sanea, who is one of the kingdom's most powerful businessmen. Bankers say the group, which had assets of $30.6bn at the end of 2008 according to rating agencies, has exposure to dozens of regional and international banks. Some western banks have already started closing credit lines.

This week, Citigroup and Credit Suisse placed at least 20m of Mr Sanea's 32m shares in Berkeley, the UK housebuilder, while shares he owns in 3i infrastructure have also been sold.

Mr Sanea, who set up Saad Group in the 1980s, also bought about 3 per cent of HSBC two years ago, but his holding in the bank has slipped to less than 2 per cent since the beginning of the year.

The proposed creditor meeting in London relates to Saad Investments Company Ltd (SICL), a Cayman Islands-based entity owned by Mr Sanea that had assets of $9bn at the end of 2008. Similar meetings are proposed in Saudi Arabia for creditors of Saad Trading Contracting and Financial Services (STCFS), which had assets of $14bn at the end of 2008, as well as in Bahrain, where Saad Group owns Awal Bank.

A regional banker, who has seen the letter issued by Saad Group, said that at least the company was providing statements to banks.

Amid concerns about regional banks' exposure to the group, the United Arab Emirates' central bank issued a circular this week telling financial companies: "You may set off your exposure against available assets in their names subject to your legal documentation."

The rare action related to Mr Sanea, STCFS and entities owned by another powerful Saudi family, Algosaibi Trading Services Ltd and Ahmad Hamad Algosaibi and Brothers (AHAB). The central bank memo, seen by the Financial Times, also ordered banks "not to allow any new facilities of the captioned groups till further instructions".

The region has a reputation for a lack of transparency and both Moody's and Standard & Poor's have withdrawn their ratings from Saad Group in part because of insufficient information.

"There's always a lot of gossip and rumours about the nature of his (Mr Sanea's) business, it was never clear where was the source of his funds," says another regional banker.

People who know Mr Sanea trace his rise to connections to the Algosaibi family, regarded as one of the most respected, merchant families in the kingdom. The family-controlled company, AHAB, is itself in talks with creditors as it seeks to restructure its debt. Mr Sanea worked for the family and married the daughter of Abdelaziz Algosaibi, one of AHAB's founders. But Saad Group has said there are no business ties with AHAB, "except on an arms' length commercial basis".

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Focus on image excises a fondness for tax havens

By Vanessa Houlder

Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

Achange of address often sends a message. For the handful of multinationals leaving offshore tax centres, the message is that they do not want to be associated with them, however reputable they may be.

When Accenture, the consulting group, announced plans last month to move its domicile from Bermuda to Dublin, the company said fears of a US government crackdown that could lead to higher taxes and compromise its ability to win public sector contracts, were among the reasons. Its regulatory statement said: "Continued criticism of and negative publicity regarding companies that are incorporated in countries that do not have tax treaties with the US, including Bermuda, could adversely affect us."

Such moves are a sign of how far tax has become a reputational issue for big business. "This perception thing is becoming more and more important," says Patrick Stevens, a tax partner at Ernst & Young, the professional services firm. "There are a lot of business people who are hugely more bothered about it than they were 12 months ago."

The election of President Barack Obama, who has repeatedly slammed the widespread use of tax havens by US businesses as "the biggest tax scam in the world", has had a powerful influence on perceptions.

So too have the negative headlines about bonuses and corporate malfeasance associated with the credit crunch, which have made many companies more sensitive about their image.

The recession has also stiffened the resolve of tax authorities. Pravin Gordhan, South Africa's finance minister, recently described aggressive avoidance as a "cancer", saying corporate social responsibility was taking on "a new meaning".

"If we want governments to take on the role of guarantor of last resort, which is what they have done, they require the fiscal capability to be able to do so," he said.

Even within the business world, there is a view that some companies have been overstepping the mark. Chris Spooner, a senior executive at HSBC, has long criticised the artificial approach to tax adopted by some companies, particularly in banking. "It doesn't make sense," he says. "It's a red rag to a bull [for the tax authorities] and it ruins the world for the rest of us."

One response from governments is to foster a climate of self-restraint. Reuven Avi-Yonah, an international tax specialist at the University of Michigan, says cultural attitudes towards tax are hugely important in securing voluntary compliance. "The US is far more successful in collecting the taxes due than countries like Italy . . . which do not see a patriotic duty in paying taxes," he says.

More generally, corporate attitudes to tax have shifted in line with broader business trends. Until the 1990s, companies saw paying taxes as part of their "general responsibility to society". But that changed, says Prof Avi-Yonah, as "shareholder profit maximisation [became] the sole legitimate goal of corporate activity".

One obvious problem of aggressive tax avoidance, he adds, is that governments are left with insufficient revenues to spend on

the infrastructure that businesses need. Another consequence is that it creates a higher risk of challenge by revenue authorities, as well as a general souring of the relationship between business and government.

Public disapproval is also important, particularly for household brands. This factor may be growing in importance as some pressure groups, politicians and unions are spoiling for a fight over tax avoidance. Tax, they argue, should be at the heart of the social contract between business and the rest of society.

Still, according to Judith Freedman of the Oxford University Centre for Business Taxation, a moral climate is only part of the answer. She advocates using a legal concept, "a general anti-avoidance rule" to tackle the issue.

"There is a subtle change in the way companies are concerned about reputation," she says, "but I am not sure it will solve the problem.

"Of course, companies should pay their fair share of tax. But there is no other norm to set that level other than the law."

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New York broker moves to sell Iraqi securities

By Anuj Gangahar in New York

Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

The rebuilding of Iraq's capital markets is set for a boost as Auerbach Grayson, a New York-based brokerage, becomes the first international company to sell Iraqi securities since the 2003 invasion.

Auerbach Grayson has signed an agreement with Rabee Securities, a Baghdad brokerage, through which it will provide research, trade execution and intelligence on companies traded on the Iraq Stock Exchange to US institutional investors.

Rabee is run by Shwan Ibrahim Taha, a former senior fund manager with Templeton Asset Management who also once ran a hedge fund for George Soros.

The deal comes five years after the Iraq Stock Exchange reopened, initially in a restaurant, after its predecessor, the Baghdad Stock Exchange, was dissolved and subsequently occupied by squatters following the invasion of Iraq by US and Allied forces.

Currently, the combined market capitalisation of the 94 companies listed on the Iraq Stock Exchange is $3bn and the average trading volume is about $10m per week.

The ISE, using its OMX system, developed by the Nasdaq OMX group, plans to be fully electronic by the end of this month. The banking sector comprises 60 per cent of the exchange's market capitalisation. Weekly trading volumes have tripled in the past year.

Auerbach Grayson specialises solely in the sale of foreign securities. David Grayson, co-founder, said that, in spite of the poor global economy in recent times, many clients have been coming back into "frontier markets" that have yet to achieve "emerging market" status.

"Iraq is in the headlines so often in a negative light that the perception is that it is not possible to do business there. But there are many investors who will perceive Iraq as very interesting.

"There will be cheaply valued companies and the economy will grow at a faster rate that other markets," he said.

The ISE's progress towards electronic trading potentially makes it more attractive to large institutions.

Mr Taha said there were several misconceptions about doing business in Iraq. "Actually the laws with respect to capital markets are liberal compared to the countries nearby," he said. "But the problems have been logistics and security."

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Serco wins £245m Dubai airports deal

By David Fickling

Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

Support services group Serco has won a 10-year, £245m contract to provide air traffic control at Dubai's airports. The emirate is attempting to transform itself into the world's biggest airport hub.

Dubai Airport is already the world's 11th-busiest cargo airport and 20th-biggest in terms of passengers carried. Maktoum Airport, a new facility under construction in the desert south-east of the city, is projected to become the world's busiest when it is completed in 2017, with a capacity of 160m passengers. Atlanta, the world's busiest passenger hub, has a capacity of 90m passengers.

There have been fears that Maktoum would be abandoned after the tightening of credit caused a sharp downturn in Dubai's construction sector last autumn. But Dubai Airports says the first terminal at the site, with a capacity of 7m-9m passengers, is on schedule to open next June, though details of the remaining facilities are still being finalised.

The contract, to be announced today, will cover radar services in and around the airport and will give Serco a role in designing the layout of Dubai's airspace routes.

Serco's background is in radar services - the group grew from a 1987 management buy-out of the Radio Corporation of America's UK arm, which has held contracts for the maintenance of RAF Fylingdales' ballistic missile early warning station in north Yorkshire for almost 50 years.

It also provides air traffic control services in Bahrain, where RCA UK signed its first contract in 1947, in Abu Dhabi, and in the smaller emirates of Sharjah and Ras al Khaimah.

Serco's most ambitious attempt to expand into air traffic control fell apart in 2001 after it lost a tender to be the minority partner in the UK's part-privatised National Air Traffic Services, following heavy campaigning by unions. The company wrote off £10.2m spent preparing the bid, which went to a consortium of BAA and UK airlines.

The group has signed £1bn worth of new contracts since the stat of the year and been appointed preferred bidder for a further £750m.

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「第２の西松事件」か…郵便制度悪用事件に民主警戒

　郵便制度悪用事件で大阪地検特捜部は１５日午前、東京・霞が関の厚生労働省と、同省雇用均等・児童家庭局長の村木厚子容疑者（５３）＝虚偽有印公文書作成・同行使容疑で逮捕＝の埼玉県和光市の自宅マンションを家宅捜索した。同省への捜索は２度目。同事件では、民主党議員の名前も浮上しており、民主党は「第２の西松事件に発展するのでは」と警戒している。

　村木容疑者は、同省障害保健福祉部企画課長だった２００４年６月、障害者団体「凛（りん）の会」（現・白山会）が、割引制度の適用条件を満たしていないのに、部下の同課係長、上村勉容疑者（３９）に企画課長の公印を押した虚偽の証明書を作成させた疑いが持たれている。

　捜査関係者によると、村木容疑者の上司だった当時の障害保健福祉部長（５７）は、虚偽の証明書発行について、任意聴取に「０４年２月ごろ、国会議員から電話で頼まれた」と証言しており、特捜部は「政治案件」として組織的に便宜が図られていたとみて経緯を調べる。

　特捜部はまた、「凛の会」代表の倉沢邦夫（７３）＝郵便法違反罪で起訴＝、同会発起人の河野克史（６８）両容疑者を同容疑で再逮捕した。

　関係者によると、上村容疑者はこれまでの調べに証明書の偽造を認めたうえで、「村木容疑者に手渡した」といい、虚偽の証明書を郵便事業会社（日本郵便）に提出した倉沢容疑者も「村木容疑者から証明書を受け取った」と供述している。

　村木容疑者は「全く知らない」と否認しているという。

　倉沢容疑者は、かつて民主党の石井一副代表の私設秘書を務めていたうえ、白山会会長側は同党の牧義夫衆院議員側に２４万円を献金していた。

　このため、民主党幹部は「民主党議員が関係者として実名で報道されているのは知っている。常識的には、特捜部も総選挙前には（政界ルートに）動かないだろう。ただ、西松事件の前科がある。ここまで内閣支持率が下落すると、政権維持のために禁じ手に踏み込む可能性もゼロとはいえないかもしれない」と警戒している。

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高遠さんにイラク住民「お帰りなさい」　拘束から５年、初訪問
2009.6.12 17:57

　２００４年４月にイラク武装勢力に拘束された北海道千歳市のボランティア、高遠菜穂子さん（３９）が事件後初めて５年ぶりにイラクを訪れ、帰国した。「知られていない虐殺現場がいっぱいあった。現状を伝えたい」と話す。

　高遠さんは今年４月、ジャーナリスト２人と中部ファルージャなどで病院や避難民地区を９日間訪問。「事件を思い出して緊張し、初めは車から外に出られなかった」が、住民は「お帰りなさい」と迎えてくれたという。避難民は郊外のバラックやテントで生活。地域間で支援に差があり設備や医師が不足する病院や、世界不況で寄付が少ないと嘆く支援者も。「医師の研修や避難民支援などできることを続けたい」

　事件後は「バッシングがつらかった」。帰国後に体調を崩したが、ヨルダンを拠点に医療品などの物資を送るなど活動。「死者の無念を伝えなくては」と各地で報告会を開いている。

遺伝子組み換えトウモロコシ　影響把握へ試験栽培　畜産草地研

2009-06-14T05:18:00.000-07:00

遺伝子組み換えトウモロコシ　影響把握へ試験栽培　畜産草地研
(6月11日 05:00)

　今月末にも遺伝子組み換えトウモロコシの隔離圃場試験を始める農業・食品産業技術総合研究機構畜産草地研究所（那須塩原市千本松）は10日、所内で報道機関や地元関係者らを対象に説明会を開いた。

　試験は米ダウ・アグロサイエンス社が開発した除草剤に耐性のある遺伝子組み換えトウモロコシの安全性評価が目的。栽培の過程で周辺野生生物の減少・消失など、生物多様性に影響を与える有害物質が発生しないかなど７項目の観点から、来年３月までの栽培、実験を行う。

　同研究所で遺伝子組み換えトウモロコシについて同様の試験が行われるのは、２００３年以降６件目。農水、環境の両大臣から承認され次第、試験に着手する。

　同研究所飼料作物育種工学研究チームの高溝正チーム長は「交雑防止には万全の措置を取る。除草剤への耐性があると、伸びたトウモロコシの上から除草剤を散布して雑草防除ができるなど、作業上の利点がある」と説明している。

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Email claims Japanese GM concerns

Posted June 7, 2009 11:25:00
Updated June 7, 2009 12:05:00
Canola crop

There is concern about the State Government's views on GM crops. (User supplied)

Email correspondence has revealed W-A's trade commissioner to Japan has serious concerns about the production and sale of genetically modified crops to Japan.

The emails, obtained under freedom of information laws, were written in January and discuss the Premier's visit to Japan in February.

One of the emails, written by Craig Peacock, the W-A trade commissioner to Japan says, there is a strong concern the new government is ignoring the concerns of a major customer base.

It goes on to say the concerns will eventually have a negative impact on all facets of Japan-WA agribusiness.

The State Opposition's Mark McGowan says the government needs to re-instate the moratorium on GM crops.

"Japan is our number one trading partner in terms of agricultural and fisheries products, more than $840 million a year of trade that we send to Japan," he said.

But the Agriculture Minister Terry Redman rejects the concerns, saying that Japan already imports a large amount of GM canola.

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Tasmania extends anti-GM ban

Tuesday, 26/05/2009

The Tasmanian Parliament has passed a bill to ban the release of genetically modified organisms for at least another five years.

The ban includes a zero-tolerance standard for non-GM seed coming into the state.

But Tasmanian canola growers say they're now unable to find seed suppliers that guarantee their non-GM seed meets Tasmania's strict zero tolerance standard on genetically modified material.

Roberts Ltd agronomist, Terry Horan, says all states except Tasmania have a 0.1 per cent allowance for GM material in planting seed and his company is urging the Tasmanian Government to fall in line.

"The companies such as Pioneer and other companies are happy to send seed out to any other state in Australia, with their minimum tolerance levels for gm adventitious presence, but nil is something they don't think they can meet."

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Liechtenstein Submits Law On Mutual Cooperation In Tax Matters With US, by Ulrika Lomas, Tax-News.com, Brussels
Thursday, June 11, 2009

The Liechtenstein government has recently adopted a report and proposal pertaining both to its Tax and Information Exchange Agreement (TIEA) with the US, signed on December 8, 2008, and to a law on mutual cooperation in tax matters with the US. An amendment to Article 102 of its constitution has also been approved.

The key issue surrounding Liechtenstein’s TIEA with the US, which is based on the Organisation for Economic Cooperation and Development’s (OECD) standard, is the element of mutual support provided by an exchange of information, imperative for the application and enforcement of the respective domestic tax laws.

According to Liechtenstein’s government, providing for an exchange of information enables mutual cooperation to take place between tax authorities, allowing them to work together. Nevertheless, the government has also confirmed that this exchange of information will not be granted automatically, only upon specific request.

Liechtenstein’s TIEA with the US reflects its recent commitment to adhering to and implementing the OECD’s standards regarding transparency and information exchange in tax matters, expressed in its declaration on March 12.

However, in order to execute the TIEA, Liechtenstein must first adopt a new national law. As a result, the government presented to parliament a law on mutual cooperation in tax matters with the US. This law sets out the precise conditions and procedures required for granting mutual assistance, as stipulated in the TIEA. Designed to ensure that assistance is provided swiftly and efficiently, the law also provides for the necessary legal protection.

Both the TIEA and the law on mutual cooperation in tax matters are due to enter into force on January 1, 2010.

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Britain to review legal basis of relations with Bermuda over Guantánamo row

Foreign Office tells island's prime minister he had no right to agree to take Uighur inmates without consulting London

Britain is to review the legal basis of its relations with Bermuda following a transatlantic row over the resettlement of Guantánamo detainees on the Caribbean island.

The US transfer to Bermuda of four Chinese Muslims, known as Uighurs, represents an acute embarrassment for the British government, which is supposed to oversee the foreign and security policy of the British overseas territory.

In angry telephone exchanges with Bermuda's prime minister, Ewart Brown, UK officials have contested his right to negotiate the transfer of the four Uighurs from US custody without consulting Britain.

Barack Obama has said he wants to close Guantánamo Bay detention camp by the end of the year, but is encountering serious problems in deciding what to do with the remaining 240 inmates. The Washington Post reported today that the administration had "all but abandoned" plans to resettle them on US soil in the face of determined bipartisan resistance.

Last year a US court order the Uighurs' release on the grounds that there was no evidence that they had acted against the US. Another 13 Uighurs are awaiting transfer to the Pacific archipelago of Palau, where there is considerable public resistance to the government's agreement to take them.

Under a 1968 understanding known as the general entrustment, Bermuda has the right to conduct external relations "on behalf of" Britain, on condition that London is consulted before agreements with other states are entered. At issue is whether the prison transfer represented such a formal agreement, or simply a local immigration matter. The Foreign Office insisted the matter was "a security issue for which the Bermuda government does not have delegated responsibility."

British officials said there would now be talks with Bermuda on the interpretation of the general entrustment. But by this evening they were playing down a suggestion made earlier in the day that the understanding would be suspended. Meanwhile, a Foreign Office official said Britain would help Bermuda carry out a thorough security assessment of the four Chinese Muslim separatists.

Taken by surprise by news of the Uighurs arrival, Britain's foreign secretary, David Miliband, is understood to have had an uneasy telephone conversation with the US secretary of state, Hillary Clinton, about why London was not told. Clinton reportedly said the US had assumed that Bermuda had agreed the move with Britain before agreeing to host the Uighurs.

Ian Kelly, the US state department spokesman, said Washington was confident that it could "work these things through" with the British government.

The Bermudan prime minister said he agreed to host the Uighurs because it was "the right thing to do", but conceded he had had a tense conversation with the island's British governor, Richard Gozney.

"He is seeking to further assess the ramifications of this move before allowing the government of Bermuda to fully implement this action," Brown said. "Our colonial relationship with the United Kingdom certainly gives him licence to do so."

However, a senior Labour MP accused the US of "riding roughshod" over British legal rights in pursuit of its own interests.

"The proper authority here is the British government and the US should have consulted with the Foreign and Commonwealth Office before they did anything of this kind," Mike Gapes, the chairman of the Commons foreign affairs committee, told BBC Radio 4's The World at One.

"I wonder what promises have been given to the Bermudans, potentially about going a bit soft on the tax haven status or something else as a quid pro quo."

The Chinese government yesterday demanded that all 17 men, who have been cleared of terrorism allegations, be returned to China.

A Chinese foreign ministry spokesman, Qin Gang, said the US should "stop handing over terrorist suspects to any third country, so as to expatriate them to China at an early date". He did not say if China would take any action.

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Britain warns its own tax havens
FELICITY LAWRENCE IN LONDON
13/04/2009 12:18:51 AM

THE Prime Minister, Gordon Brown, has put British overseas tax havens under renewed pressure to end their culture of secrecy within six months or face sanctions.

Mr Brown has written to all British Crown dependencies and overseas territories, setting them a September deadline to sign agreements to share tax information with the authorities.

Leaders at the recent G20 summit in London pledged to crack down on the tax abuse and shadow banking through offshore jurisdictions that was central to the global financial crisis.

The new move by Downing Street puts Britain in the unusual position of threatening punitive action against its own dependencies.

Mr Brown has also signalled in the correspondence that he wants to tackle not just illegal tax evasion through personal offshore bank accounts, but also tax haven companies used for tax avoidance by corporations and super-rich individuals.

Seven British territories were named by the Organisation for Economic Co-operation and Development when it published, to coincide with the G20 summit, a list of havens that had either not agreed to, or not yet implemented, its international tax standards.

Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat and the Turks and Caicos were all placed on the OECD's "grey list" for failing to deliver on promises to be more transparent, despite signing up to do so, in some cases, several years ago.

Mr Brown has also written to the Crown dependencies of Jersey, Guernsey and the Isle of Man, telling them that he expects rapid further progress to end tax and banking secrecy.

All three are on the OECD's "white list" of jurisdictions that have already implemented a number of bilateral agreements to share tax information with other authorities, but they are still used by companies engaged in tax avoidance.

Four countries placed on the OECD "black list" because they had not even agreed to share tax information have already changed their positions under the global political pressure.

Costa Rica, Malaysia, the Philippines and Uruguay have been moved to the grey list, having promised to reform.

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Bermuda Signs Tax Info-Exchange Agreement With Netherlands

Mon, Jun 8 2009, 15:27 GMT
http://www.djnewswires.com/eu

Bermuda Signs Tax Info-Exchange Agreement With Netherlands

LONDON -(Dow Jones)- The Bermudan government said Monday that it has signed a tax information-exchange agreement with the Netherlands which allows it to meet international standards on tax-haven transparency.

The move is expected to allow Bermuda to compete for financial services business more effectively against offshore jurisdictions which have already met these standards, such as the Isle of Man, Guernsey and Jersey.

Bermuda said the tax information-exchange agreement between Bermuda and the Netherlands is the 12th such pact signed with a foreign state by the British overseas territory.

The Organisation for Economic Cooperation and Development has said that tax havens must sign 12 such agreements with other nations to demonstrate they are committed to operating in a transparent manner and to meet its internationally-agreed tax standard.

The tax agreements are designed to allow countries to request information from other financial centers, including those viewed as tax havens, which allows them to levy the right amount of domestic tax on their citizens.

Many offshore financial centers believe investors are more willing to invest in an offshore center which has met international standards of operation than those which haven't.

Bermuda said it expects to sign several more new agreements in coming months.

"Bermuda has concluded negotiations with Germany, Mexico and Canada," said Paula Cox, Bermuda's minister of finance. "Signing dates are being arranged with Germany and Mexico for the very near future and it is anticipated that the signing with Canada will take place later in the year after Canada concludes its ratification process."

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WTO tries to make sense of Russia’s rethink

By Catherine Belton and Isabel Gorst in Moscow

Published: June 13 2009 02:46 | Last updated: June 13 2009 02:46

When Vladimir Putin announced this week that Russia was to drop its bid to join the World Trade Organisation after 16 years of negotiations and would instead enter as a customs union with Kazakhstan and Belarus, many western and even Russian officials were taken aback.

To some western officials, the switch looked like a pressure tactic to force Russia’s western negotiating partners to lift conditions blocking its immediate entry into the 153-member global trade bloc or face another set of protracted negotiations.

But many Russian commentators and officials say the turnround is part of a shift in Russia’s priorities as it focuses on expanding its sphere of influence in the former Soviet Union.

The switch comes amid intensifying frustration at tough conditions requested of Russia for entry into global structures such as the WTO – and the ever more widespread view in Moscow, especially after the financial crisis, that the importance of regional power blocs is poised to increase as US might wanes.

“For Russia, the most important strategic task is now to create an independent centre of power, its own economic bloc. One’s own club is now more important than the global club,” says Dmitry Trenin, a senior analyst at the Moscow Carnegie centre.

Fyodor Lukyanov, editor of Russia in Global Affairs, says: “The only chance for Russia to build its position is to create its own regional centre of influence,” as the strength of other powers such as China increases. “This is the multi-polar world Putin has been speaking of for so long.”

But others say this policy is a big mistake. “This is not [only] fragmentation, it is [also] plain stupid to align yourself with countries that don’t fulfil the minimum requirements for WTO entry,” said one senior western banker. Belarus and Kazakhstan have been severely affected by the crisis and are behind Russia in accession talks.

“It’s a prelude [to] what’s going to happen: Russia will revive the union of CIS states. But everyone is getting just a little bit cocky. If you are going to play the big muscle man, you need to deal with your own problems first. If you look at Russia’s infrastructure, it is a debacle.”

Russia’s leaders face strong domestic opposition to WTO accession, especially since the economic crisis. Domestic industry has been arguing it could be badly affected by foreign competition.

Many people argue Russia does not need the WTO at all, Mr Trenin says, while the customs union would strengthen its position as a trade player as it seeks to build a common economic space within the former Soviet Union (FSU).

Since the economic crisis hit the FSU, Moscow has been using its position as the strongest economy in the region, doling out billions of dollars in aid to boost its influence.

“This is all part of the reset,” Mr Trenin says, “[It is] the renewal of Russia’s relations with the western world.”

Mr Putin made the announcement on scrapping Russia’s unilateral bid as he signed a trilateral agreement with the prime ministers of Kazakhstan and Belarus to form a customs union between the three countries by January 1 2010, finally concluding the deal after years of stop- start negotiations.

Analysts said Russia had made a concerted push to get it through, piling pressure on Belarus as it launched a mini “milk war” at the weekend banning Belarusan milk product imports into Russia in a move that could have cost Minsk up to $1bn (€713m) in revenues. Kazakhstan, weakened by the crisis, wants to strengthen ties with Russia, they said. A Kazakh economist told the FT he believed Kazakhstan had “surrendered its independent trade policy” by joining the union.

EU sources say it is unclear whether Russia could continue talks on unilateral accession while conducting talks on entry for the customs union. Negotiations for entry as a customs union could delay Russia’s entry, they say.

Andrei Klimov, deputy head of the international affairs committee in Russia’s parliament, said Moscow was forced to choose between prioritising WTO entry or forming the union. “This decision is very logical. Russia has been trying to enter the WTO since 1993 without success,” he said. “They keep forwarding new conditions. This has [limited] our economic integration with our partners [in the FSU] ... If we entered the WTO first we would have to delay [formation] of the customs zone further.”

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Ahmadi-Nejad wins landslide in Iran

By Najmeh Bozorgmehr and Anna Fifield in Tehran

Published: June 13 2009 10:47 | Last updated: June 13 2009 15:22

The government of Iran on Saturday announced that incumbent Mahmoud Ahmadi-Nejad had won a landslide victory in the presidential election, amid claims from opposition leaders that the results in the historic contest had been “staged”.

Opposition supporters were shocked at the results and Mir-Hosssein Moussavi, the moderate former prime minister who was challenging Mr Ahmadi-Nejad, vowed to fight what he saw as an unacceptable result.

But Ayatollah Ali Khamenei, the supreme leader, made it clear that the contest was over.

“More than 80 per cent turnout and more than 20m votes for the president-elect is a real cause for celebration,” the supreme leader said in a statement on Saturday afternoon, calling the election “a startling and unique event”.

Mr Khamenei called on other candidates to help the president and asked the supporters of both sides to avoid “provocative words and deeds”.

He advised all people, especially the youth, to be aware of the “enemy’s plots”.

With about 82 per cent of the votes counted, the interior ministry said that Mr Ahmadi-Nejad had won 64.7 per cent of the vote, easily passing the 50 per cent threshold needed to win outright in the first round.

Mr Moussavi had taken only 32.2 per cent of the vote, the ministry said, while the two marginal candidates, reformist Mehdi Karroubi and fundamentalist Mohsen Rezaei, won 0.8 per cent and 2.07 per cent respectively.

The interior ministry released the results with record speed, without giving details of which constituencies had been counted.

Turnout was a record 85 per cent, according to the Guardian Council, exceeding the previous high of 79 per cent recorded when Mohammad Khatami, a reformist, won the election in 1997.

The results appear to be at odds with the huge groundswell of support that formed around Mr Moussavi in the final week of the campaign, and with the history of high turnout favouring reformists over conservatives.

“I warn that I will not succumb to this staged arrangement,” Mr Moussavi said in a statement on Saturday. “We witnessed the performance of dishonest officials, resulting in nothing except shaking the foundations of the holy Islamic republic of Iran and giving sovereignty to lies and dictatorship.”

Iranians knew vote rigging had taken place on a massive scale, Mr Moussavi said. “People who formed long queues and know who they have voted for, are watching in absolute astonishment the magical claims of officials and the statements on TV and radio,” he said.

Other reformists also lashed out. “It’s absolutely clear that the results have been engineered,” said one reformist close to Mr Karroubi. “From now on, those who were motivated to participate in elections and make changes won’t do so anymore.”

Mr Ahmadi-Nejad’s office did not make any comment on Saturday about the allegations of electoral fraud. But Mojtaba Samareh-Hashemi, the head of Mr Ahmadi-Nejad’s election headquarters, suggested that reformists could not accept the fact that most Iranian people did not want Mr Moussavi as their president.

“Everyone should obey people’s votes and those who thought they should rely on people to reach their personal plans and interests are wrong,” Mr Samareh-Hashemi said on Saturday, according to Fars news agency.

“Those who do not abide by people’s votes are in fact showing that what matters to them is their own power,” he said.

Mr Ahmadi-Nejad’s supporters are planning are huge celebration in Azadi Square in western Tehran on Sunday evening.

With the race between Mr Ahmadi-Nejad and Mr Moussavi tight and both men enjoying significant amounts of support most analysts expected a run-off next Friday to decide the winner.

Mr Ahmadi-Nejad still enjoys significant support in rural areas and among religious radicals, largely thanks to his generous handouts and revolutionary zeal. However, he has alienated large segments of society, including the middle class, youth and the business community.

Several hundred protesters gathered in front of the interior ministry and at Mr Moussavi and Mr Karroubi’s campaign headquarters on Friday night, and again at Mr Moussavi’s office on Saturday morning, but all were dispersed by police.

Security was tightened around these areas on Saturday morning, with road blocks set up on the thoroughfares around the interior ministry.

But there were reports emerging on Saturday that police had attacked a group Mr Moussavi’s supporters with batons outside the interior ministry, which announced the result of Friday’s election.

“Everyone is shocked,” said a reformist leader from the north-eastern city of Mashhad, but he added that there were no security problems.

Authorities in one town near Mashhad said Mr Moussavi won in that district but when the results were announced by the provincial governor, Mr Ahmadi-Nejad was victorious.

In Israel, a senior official said Mr Ahmadi-Nejad’s victory was “a very worrying development”.

“Mahmoud Ahmadinejad is the most militant of the candidates, and it can only lead his country into a confrontation with the western world,” the official said, according to Agence France Presse.

Mr Ahmadi-Nejad has sharply heightened tensions with Israel, once pledging to “wipe” the country off the map.

Before the results were released, President Barack Obama had hinted he was hopeful of a change in Iran hard on the heels of the defeat of Hizbollah, which is backed by Tehran, in last week’s Lebanese election.

“Just as has been true in Lebanon, what can be true in Iran as well...you’re seeing people looking at new possibilities,” Mr Obama told reporters, adding that he was excited by the “robust debate” in Iran.

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日本政府、「メコン・インド経済回廊」具体化を支援

　日本政府はメコン川流域とインドをインド洋を介して結ぶ「メコン・インド経済回廊構想」の具体化を支援する。構想の中核となるベトナム―カンボジア―タイを結ぶ高速道路を実現するため、中核国のタイと共同で７月、研究会を設立。民間資金を導入したインフラ整備を進めるための金融・法制面の枠組みづくりを支援し、日本の政府開発援助（ＯＤＡ）との組み合わせで構想の実現を狙う。

　高速道路はベトナム南部の都市ホーチミンからカンボジアの首都プノンペン、タイの首都バンコクを経てタイ南部でインド洋に面するラノン、パンガ、パクバラに至る。日本政府は麻生太郎首相が４月に提唱した、670億ドル（約６兆6000億円）の資金援助でアジアの経済規模を倍増させる「アジア経済倍増構想」の柱として推進する。(16:39)

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マグロの漁獲量、段階制限で合意　東太平洋、09年から

　水産庁は13日、東太平洋のマグロを管理する全米熱帯まぐろ類委員会（ＩＡＴＴＣ）が米国で開いていた年次会合で、メバチ・キハダマグロの漁獲量制限で合意したと発表した。2009年から11年まで段階的に制限する。日本に影響のあるはえ縄漁では、09年の漁獲枠を07年比で９％減らすことになったが、日本の漁獲実績からすると余裕があり、水産庁は「影響は大きくない」としている。

　ＩＡＴＴＣの漁獲量削減を巡る交渉では、巻き網漁の禁漁期間の延長などで合意できず、08年は正式な漁獲制限がないままだった。今回の会合では巻き網漁でも禁漁期間の拡大で合意。07年の42日間から73日間に延長された。

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日立復活へ100日プラン　「脱・総合電機」でグループ再編

　日立製作所が「脱・総合電機」にかじを切る。重電、情報通信など得意の社会インフラ事業に経営資源を重点配分するため、1000社を超すグループの構造改革は待ったなしだ。４月１日に就任した会長兼社長の川村隆（69）と３副社長が子会社からの復帰という異例の布陣。時計の針を戻したような経営チームは、グループ再編という古くて新しい課題にどう立ち向かうのか。

　ＪＲ東京駅前の日立本社が入る高層ビル。最上階の27階の役員フロアで開く経営会議は月１～２回が通例だが、川村体制の発足後は何度も臨時招集され、メンバーの副社長陣が議論を闘わせる場面が増えた。「100日プラン」。就任から100日をメドに策定を急ぐ経営計画は、新体制が目指すグループ戦略の羅針盤となる。

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いばらきコープ、初の赤字　ギョーザ事件響く

　いばらきコープ生活協同組合（茨城県小美玉市、佐藤洋一理事長）が12日発表した2009年３月期決算は、一般企業の最終損益にあたる当期剰余金が10 億6100万円のマイナスと88年の設立以来初の赤字だった。消費低迷に加え、08年１月に起きた中国製冷凍ギョーザ事件の影響で売り上げが伸び悩んだ。他の生協と連携して経費を減らし黒字回復を目指す。

　一般企業の売上高にあたる事業高は344億5500万円と、前の期に比べ4.7％減った。経常利益にあたる経常剰余金は１億6300万円のマイナスだった。減損会計を導入した結果、14億4500万円の特別損失が発生し、最終損益ベースでも赤字になった。

　事業高を部門別に見ると、食品販売・宅配などの供給高が333億円と前の期から2.6％減った。コンサートや公演など利用事業収入は３割増の7600万円だった。

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光化学スモッグを共同研究へ、日中韓環境相会合
2009.6.14 16:16

　日本と中国、韓国の環境相会合が１４日、北京で開かれ、大陸からの大気汚染物質の影響が指摘される光化学スモッグについて、発生メカニズムの共同研究を推進するなどとした共同コミュニケを採択し、閉幕した。

　会合は１１回目で、斉藤鉄夫環境相のほか、中国の周生賢環境保護相、韓国の李萬儀環境相が参加。光化学スモッグや黄砂対策など１０項目を今後５年間の優先的な協力分野とすることで合意し、これらの成果を８月に中国で開かれる予定の日中韓首脳会談に反映させる。

　光化学スモッグは、工場や自動車から排出される窒素酸化物（ＮＯｘ）などが光化学反応を起こすことで発生。九州などのスモッグでは、中国から流れ込む汚染物質の影響が疑われ、専門家の間で汚染物質の発生源と気象の関係などについて研究を進める。（共同）

大手新聞社決算、広告・部数落ち込みで各社減収

2009-06-13T07:32:00.001-07:00

大手新聞社決算、広告・部数落ち込みで各社減収 (1/2ページ)
2009.6.12 22:12
このニュースのトピックス：景気

　新聞全国紙５社の決算が出そろった。インターネットの普及や若年層の紙離れなどで新聞の販売部数が落ち込んだのに加え、昨年秋以降の急速な景気後退で広告収入が大きく減少し、そろって減収を記録するなど各社とも厳しい決算となった。このため、新たな収益源の確保に向け、ネット事業の強化などに取り組む構えをみせている。

　新聞事業の収支を示す単体の業績をみると、朝日新聞社と毎日新聞社が広告収入の落ち込みに経費削減が追いつかず、営業赤字に転落した。朝日が営業赤字を計上するのは初めて。毎日は最終損益でも１５年ぶりの赤字となった。

　日本経済新聞社は、景気の悪化で経済情報を求める読者が増えたことで「部数は堅調に推移した」（広報グループ）ものの、広告収入の落ち込みが響いて減収減益となった。また、産経新聞社は、夕刊フジやサンケイスポーツの販売部数が減少し、単体の営業利益を大幅に減らした。連結業績のみを公表した読売新聞グループ本社も最終赤字を記録した。

　各社がそろって減収となったのは、広告収入の落ち込みが大きい。電通がまとめた年間広告費によると、新聞広告は平成１２年をピークに減少し、昨年秋の経済危機で企業が広告出稿を抑えたことで、２０年には前年比１２・５％減と大幅な落ち込みをみせた。

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靖国神社宮司に京極氏　旧但馬豊岡藩１５代当主、民間出身
2009.6.12 22:41

　靖国神社は１２日、総代会を開き、１月に急逝した南部利昭前宮司の後任に、京極高晴氏（７１）を決めた。就任は１５日付。南部氏に続き、２代続けて旧華族で神職経験のない民間企業出身者の宮司となる。

　京極氏は旧但馬豊岡藩（兵庫県）の藩主だった京極家１５代当主。東大法学部卒業後、日本郵船事業部長、氷川丸マリンタワー社長、関東曳船社長などを歴任した。

　第１０代宮司就任に当たって京極氏は、「御創立１４０年にあたるこの年に、宮司の大役を仰せつかることとなり、身の引き締まる思いでいっぱいです」とのコメントを出した。

　前宮司の南部氏は１月７日、虚血性心不全のため急逝。後任人事は難航し、宮司は５カ月間、空席となっていた。

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プルトニウムに住民不安　目黒の防衛省施設４０年保管

2009年6月12日朝刊

防衛省技術研究本部。後方の煙突は目黒清掃工場＝東京都目黒区で、本社ヘリ「おおづる」から
写真

　東京都目黒区の住宅街にある防衛省技術研究本部の施設に、核物質のプルトニウム２３９が長年、保管されていることが分かった。新たな研究施設を造るために同省が開いた地元住民向け説明会で明らかにした。原爆を製造するには量が少なく、保管も厳重にされているという。しかし、猛毒の核物質が住宅街にあることを初めて知った住民は多く、不安を訴える声を受けて区は防衛省に安全管理を要請する。　（松村裕子、沢田一朗）

　このプルトニウムは旧防衛庁が一九七二年、核爆発の際に使う中性子線の測定機器が正常に動くかどうかをチェックするために米国から購入した合金四十七グラムのうちの三十二グラム。

　核燃料物質などを保管する際に必要な東京消防庁への届けを出さずに保管していたために八六年の国会質問で指摘を受け、謝罪して届けを出した。

　防衛省によると、機器のチェックには、扱いがより簡便な放射性同位元素のコバルトなどを使うようになったため、長年使用しておらず、今後も使う予定はない。

　文部科学省などによると、プルトニウムは売り手に返す以外引き取ってもらう方法はないため防衛省も手だてがなく、保管し続けている。

　防衛省は、住民の要望で九日夜、新設する施設の説明会を初めて開催。住民からの質問にプルトニウムの存在を認めたうえで、保管施設は生体認証で入る人物を限定し、監視カメラを設置するなど厳重に管理していると強調した。

　プルトニウム２３９で原爆を製造するには最低でも一・五キロ程度が必要とされる一方で、毒性は非常に強い。こうした情報の詳細が住民に知らされていないことが不安を増幅させており、住民からは「再度説明会を開いてほしい」との声が上がった。

　住民グループの一人中村正子さん（６６）は「国会で問題になった後、処分したと思っていた。二十年以上も保管していたとは」と驚く。目黒区も「保管を把握していなかった」と明かし、本部の敷地周辺が住宅街であることを重視して安全対策を要請する。

　防衛省は「盗まれないよう積極的に広報はしてこなかった。国会の指摘で届け出をしたため、保管し続けていることは住民も知っていると思っていた」と話している。

＜プルトニウム＞　放射性元素の一つ。天然には存在しない。ウラン燃料を原子炉で燃焼させると生成される。中でも、プルトニウム２３９は核分裂が容易なため、原子爆弾の原料にもなる。毒性が強く、粉末を吸い込むとがんを引き起こす可能性が高い。

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人生は「諸行無常」…ホリエモン、保釈後初の講演会

「チョウチョウの収集でもするんじゃ」辞任・鳩山をチクリ
保釈後初めて講演会を行った堀江氏（クリックで拡大）
保釈後初めて講演会を行った堀江氏（クリックで拡大）

　証券取引法違反で係争中の元ライブドア社長、堀江貴文氏（３６）が１２日夜、２００６年４月の保釈後、初の講演会を都内で開いた。逮捕について「何がいけなかったのか分からない」と弁明しながら、マスコミや検察を徹底批判。話題の鳩山邦夫前総務相を一刀両断するなど、リップサービスぶりは相変わらずだった。

　講演会は、３月に出版した「徹底抗戦」（集英社）の出版記念イベント。チケットは１－３万円と若干高めだが、東京・港区のホールには約４５０人が集まった。

　紫色のＴシャツ姿で登壇した堀江氏は、保釈時のスリムな姿がウソのようなふっくら体形。冒頭から「どんだけ君らは何も考えてないんだ！」などと検察、マスコミ批判を展開した。特に、同時に逮捕、起訴された元部下（宮内亮治元取締役）への“口撃”は激しく、「愛人が社内にいた」「横領していた」といった暴露話も飛び出した。

　質疑応答では、０５年の衆院選出馬に触れ、「（自分は）次期首相になれるんじゃないかと思っていた」と大胆発言。一方で「信じれば信じるほど裏切られる」としんみりしたり、人生を「諸行無常」と表現するなど、孤独な一面も見せた。

　講演後、取材に応じた堀江氏は、辞任した鳩山氏について「チョウチョウの収集でもやるんじゃないですか」とチクリ。秘書から聞いた話として「チョウのブリーディングをやりたいらしい。『極東の島国で首相をやっても歴史には残らないけど、新種を発見すれば百科事典に載るんだぞ』と言っていたらしい」と皮肉たっぷりに話した。

【チケット３万円】

　今回、警備態勢が確保できたために開いたという講演会。その警備を担当したのは作家の北芝健氏だ。「元刑事の経験を見込まれてオファーがあった。うちの空手道場の有段者ら６人で堀江氏の自宅まで警備にあたる」と北芝氏。

　会場には空席も目立ったが、「それでも一番いい席はすぐ埋まった」と主催者。大阪の経営コンサルタントの男性（２７）は「３万円は高いとは思わない。すごいオーラがある」と満足げで、まだ一部には神通力が残っているようだ。

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サマーズ委員長：「過剰消費から貯蓄へ」貿易赤字減に意欲

　【ワシントン斉藤信宏】サマーズ米国家経済会議（ＮＥＣ）委員長は１２日、ワシントン市内で講演し「米国民は貯蓄を増やす必要がある」と過剰消費からの脱却を図る考えを表明。「ドル安につながる巨額の貿易赤字の削減に取り組む」との方針を示した。また、「世界の国々、とりわけ新興国が内需拡大に真剣に取り組むことを期待したい」と中国やインドなど成長率の高い新興国に需要底上げへの協力を求めた。

　サマーズ委員長は米景気の現状についても触れ「消費者心理や企業の投資意欲などに改善が見られる」と述べ、「３カ月前と比較して、米国経済は明らかに良くなっている」と米景気が底打ちしつつあることを示唆した。ただ、「雇用情勢の悪化は続いており、その影響を過小評価するわけにはいかない」と先行きへの慎重な見方は崩さなかった。

　一方、自動車大手や金融機関、保険大手などを事実上の政府管理下に置いたことについては「他に選択肢がなかった」と強調。「政府による経営への介入は一時的なものに過ぎず、政府保有株は可能な限り早期に民間に売却する」との方針を示した。

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租税条約：政府、バミューダと交渉開始

　政府は１２日、バミューダ政府と租税条約の締結に向けた交渉を開始すると発表した。バミューダは優遇税制や銀行口座の秘密保持などで資金を吸い寄せるタックスヘイブン（租税回避地）の一つとされてきた。政府は情報交換を主体とした条約の締結で資金の流れなどの透明性を高めることを狙う。

　４月の金融サミットでタックスヘイブンは金融危機の一因とされ、税務の透明性の低い国への制裁も打ち出された。経済協力開発機構（ＯＥＣＤ）はバミューダを、国際基準を守っていない国に挙げていたが、改善されたため６月に対象から外した。

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LUKOIL to broaden its activity in Kazakhstan

12.06.2009, 18.05

KUSTANAI, June 12 (Itar-Tass) -- LUKOIL will broaden its activity in Kazakhstan, Company President Vagit Alekperov said at the Friday meeting of the Kazakh Presidential Council of Foreign Investors on Friday.

“Kazakhstan is a priority, and the crisis has enhanced its significance,” Alekperov said. “We will broaden the activity in your republic, which has created conditions for large investments.”

Intensive development of the Karachaganak oil and gas condensate field is vital for LUKOIL, he said. “If the ‘parallel action’ concept is approved, we will prepare to launch the project alongside negotiations between private investors, KazMunayGaz and Gazprom,” he said.

Also, LUKOIL is about to acquire the British Petroleum stake in the joint venture LUKarco, which has a share in the Caspian Pipeline Consortium and 5% in TengizChevroil.

Alekperov hopes for signing a contract on the development of the Khvalynskoye field on the Caspian shelf by the end of this year. The field is located in northern areas of the Caspian Sea. The Kazakh-Russian agreement of July 6, 1998, on the division of the Northern Caspian seabed, provides for joint development of the field.

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03:29 GMT, Saturday, 13 June 2009 04:29 UK
Spanish Civil War bodies exhumed
By Danny Wood
BBC News, Madrid

Workers examine remains in one of the two graves at Santa Marta, Spain

Seven bodies have been removed from Spanish Civil War graves in the first court-ordered exhumation.

The remains were transferred from two mass graves in the cemetery of Santa Marta village to a medical lab for official identification.

Archaeologists recovered the remains, belonging to men executed by supporters of Gen Francisco Franco in 1936.

This could be the first of thousands of official exhumations that have been the focus of a lengthy legal wrangle.

Judge Garzon

The matter of exhumations is still controversial in Spain 70 years after the Civil War.

Previously, exhumations were done by volunteers with no official help.

These seven bodies were officially exhumed in the presence of relatives over five days.

Historians says tens of thousands of victims of the Civil War and the repression under Gen Franco that followed still lie unidentified in mass graves around the country.

Last October, High Court Judge Baltasar Garzon announced that mass exhumations could begin - including the grave where poet Federico Garcia Lorca is thought to be buried.

Judge Garzon named Gen Franco and more than 30 members of his regime as instigators of alleged crimes against humanity.

But the public prosecutor argued that these crimes could not be examined, because of Spain's Amnesty Law that prevents any criminal investigation into the Franco years.

Judge Garzon pulled out of his inquiry and transferred the responsibility for any future exhumations to local courts.

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21:37 GMT, Friday, 12 June 2009 22:37 UK
Saudi pays up in Paris shop row

George V hotel in Paris

A Saudi princess who allegedly owed thousands of dollars in shopping bills in Paris has agreed to pay up after a bailiff visited her hotel, lawyers say.

Maha al-Sudairi, the wife of the Saudi interior minister, is paying more than $120,000 (85,700 euros; £72,800) to one store, according to its lawyer.

It came after a court order was issued allowing the seizure of her belongings.

The bailiff had gone to the luxury Georges V hotel, just off the famous Champs Elysee in the French capital.

Maha al-Sudairi has been staying at the hotel, which is owned by her nephew.

She has diplomatic immunity because of her husband's status.

Relief

The decision to settle the bill followed the court order obtained on behalf of the clothing chain, Key Largo. It was owed $125,000.

The shop's lawyer, Jacky Benazerah, said repeated demands for payment had been ignored and described the settlement as a relief.

He said: "The operation ordered by the judge began at 4.30pm in the presence of the local police chief. It seems that during the operation the Saudi consul turned up in person and, following talks, a guaranteed cheque for the total sum owed to my client was handed over."

But the BBC's Alasdair Sandford, in Paris, says the princess allegedly owes large sums to several chic Parisian stores from various shopping sprees carried out over the past year.

One lingerie store opposite the Georges V says it has been unable to recoup nearly $100,000.

This is not the first time the Saudi princess has made headlines.

In 1995, she was accused of beating a servant in Florida whom she suspected of stealing from her. No charges were filed.

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19:25 GMT, Friday, 12 June 2009 20:25 UK
Gaddafi no-show angers Italians

Libyan leader Muammar Gaddafi attends a meeting with Italian President Giorgio Napolitano on Wednesday

The Italian lower house has cancelled a high-level conference with Libyan leader Muammar Gaddafi after he failed to turn up after a two-hour wait.

Calling the delay "unjustified", Speaker Gianfranco Fini called the meeting off to applause from the crowd.

Col Gaddafi has prompted a number of controversies on his first visit to Italy, Libya's former colonial ruler.

An earlier address to a group of 700 Italian women - for which he was also late - drew both applause and jeers.

He and his 200-member entourage arrived to a red-carpet welcome on Wednesday hosted by Italian Prime Minister Silvio Berlusconi.

But at a debate in Rome University on Thursday, the colonel was heckled by students who were protesting against his human-rights record and a deal with Italy to forcibly return African migrants.

Long wait

The streets of Rome around the lower house of parliament were reportedly shut down in a security operation by police, and senior politicians had gathered in anticipation of Col Gaddafi's visit.

Students protest against the visit of Libyan leader Muammar Gaddafi at the La Sapienza University on Thursday

He had been due to begin meetings at 1430 local time (1230 GMT), but by 1630 had failed to arrive.

The conference was then called off "due to the delay" by Gaddafi, said Mr Fini to applause from the waiting crowd.

"A delay that has not been justified to the lower house speaker and for which... I consider this conference cancelled," he said.

Observers say Col Gaddafi has made a habit of failing to appear on time for his appointments while on his Italian visit.

They say he was half an hour behind schedule for his meeting with the Italian head of state, President Giorgio Napolitano; an hour late for government President Berlusconi; an hour late for the Senate; and an hour-and-a-half late for La Sapienza University.

'Forced by necessity'

Col Gaddafi was also an hour late for his audience with prominent Italian women from the fields of business, politics and culture earlier on Friday.

Nonetheless, he entered the gathering at Rome's concert hall to loud applause, and was introduced by Italy's Equal Opportunities Minister Mara Carfagna, a former beauty queen.

Col Gaddafi spoke about the condition of women in Europe and Africa with some of his trademark female bodyguards standing by.

"In society I think there is complete equality between men and women," he told the audience, which included some women who were carrying posters of him.

"The European woman has arrived where she is today, driving trains and buses, travels on her own, sleeps in hotels, and so formally she is emancipated.

"But this wasn't because of her free choice or development but because she was forced by necessity," he added.

Although the comment drew boos from many of the women present, other remarks were met by applause and laughter.

There was a throng of women around the Libyan leader as he left, with several trying to get his autograph or take his picture.

"I hope that Gaddafi can take inspiration from women in Italy and the West to reflect and improve the condition of women in his own country," business woman Soraya Bonincontro told Reuters news agency.

Col Gaddafi held a similar meeting on a visit to Paris in 2007, when he told guests he wanted to "save European women".

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23:28 GMT, Friday, 12 June 2009 00:28 UK
Pirates expand to Oman's waters

Pirate (File photo)

A cargo vessel has been hijacked by suspected Somali pirates off the coast of Oman - the first such attack in the area, Nato says.

MV Charelle, under the Antigua and Barbuda flag, was attacked 60 nautical miles south of Sur on the Omani coast.

It was the "first case of armed robbery outside the [pirates'] normal operations area," Lt Cmdr Alexandre Fernandes told Reuters news agency.

The vessel is now thought to be heading towards Somalia.

Lt Cmdr Fernandes, on board a Portuguese anti-piracy patrol near the Gulf of Aden, said the pirates were "probably looking for other areas of operations where there are less patrols by warships".

See map of how piracy is affecting the region and countries around the world

There was no information about the number of crew or their nationalities.

This week, the US Navy warned that Somali pirates were expanding their range of operations far beyond the East African coast.

One attack has been confirmed on a ship as far north as the Red Sea. The gangs have also extended their raids down beyond the Seychelles.

The pirates were able to strike further away from the coast with the help of bigger mother ships, said the US Navy.

Somalia has been without a stable government since 1991, allowing piracy to flourish.

More than 30,000 vessels annually transit the pirate-plagued Gulf of Aden and the busy shipping lane has offered rich pickings for raiders.

The gangs are currently holding 14 ships and more than 200 seamen in the region.

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14:58 GMT, Thursday, 11 June 2009 15:58 UK
Egypt u-turn on publishing Israeli books
By Christian Fraser
BBC News, Cairo

Farouk Hosni

The Egyptian culture ministry has agreed to publish Arabic translations of two novels by Israeli writers.

The decision comes in the wake of recent criticism of Culture Minister Farouk Hosni, who is bidding to become the next head of Unesco.

When asked about Israeli books in Alexandria library last year, the minister said that if they existed, he would burn them himself.

Mr Hosni later apologised but it was seen as having dented his chances.

The post of director general of the United Nations cultural agency is considered a valuable prize on the diplomatic circuit. The Egyptian government is very keen for its man to be chosen.

But the culture minister and abstract artist Farouk Hosni has come under some severe criticism for comments he made last year to the Egyptian parliament in which he said he would burn any Israeli books that were being held by the Alexandria library.

Mr Hosni subsequently offered his apologies.

'No coincidence'

Now the ministry is trying to put some weight behind his campaign by announcing that it will publish Arabic translations of novels by the renowned Israeli writers Amos Oz and David Grossman - for the first time.

The national translation centre said it was translating books from 27 languages including Hebrew.

The timing of this announcement is surely no coincidence.

A spokesman for the ministry said he hoped to have an agreement signed with their English and French publishers by early July - a good two months before the Unesco decision.

However, they are still refusing to deal directly with the Israeli publishers because they say it would cause a scandal in Egypt and across the Arab world.

Culture chasm

Only two Israeli books have ever been published in Arabic here.

Despite the peace deal signed by the two countries in 1979 Egypt has resisted any cultural integration in protest at Israel's continued occupation of Arab land.

Even Alaa Aswani, who wrote the renowned Yacoubian Building, which was later turned into a successful film, has refused to have his books translated into Hebrew.

Unesco, based in Paris, is responsible for promoting international collaboration through education, science, and culture.

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Gaddafi tells Italy to scrap political parties
Thu Jun 11, 2009 5:02pm EDT

By Stephen Brown and Philip Pullella

ROME (Reuters) - Libyan leader Muammar Gaddafi, addressing Italians in a historic Rome square, embarrassed his hosts on Thursday by saying he would abolish political parties and give Italians direct power if it were up to him.

"There would be no right, left or center. The party system is the abortion of democracy," Gaddafi said in a sunset address in the famous Campidoglio square designed by Michelangelo atop Capitoline hill.

"I would abolish political parties so as to give power to the people," said the idiosyncratic Gaddafi, while some members of the crowd held up pictures of the Libyan leader and banners welcoming him.

His angry host, right-wing Rome mayor Gianni Alemanno -- who had praised the Libyan leader an hour earlier -- told reporters Gaddafi's discourse on political parties was "unacceptable" and that "we don't accept lessons on democracy from anyone."

Gaddafi also praised Italy for condemning fascism after the colonial period. Alemanno, standing beside him, was once the youth leader of a neo-fascist party and sparked controversy last year by refusing to label fascism as evil.

Earlier in the day Gaddafi, making his first visit to the former colonial power, faced protests by students over his human rights record and over a bilateral agreement for Italy to send back boatloads of African migrants crossing the Mediterranean.

The students tried to stop him giving a lecture at a Rome university, hurling paint and scuffling with police.

He told the students terrorism was "the residue of colonialism."

"Terrorism is to be condemned and most victims (of terrorism) are innocent and unarmed," Gaddafi said. But the world community had to look at the root causes of terrorism, such as injustice, he added.

The North African nation, once a pariah accused of sponsoring terrorism, has seen a thaw in its relations with the West since Gaddafi promised to give up the quest for weapons of mass destruction. International sanctions were lifted in 2003.

Italy, which last year apologized for Italian atrocities during its 1911-1943 colonial rule, is at the forefront of the diplomatic thaw and now gets a quarter of its oil from Libya, and more recently Libyan capital injections into Italian firms.

But Gaddafi retains a defiant tone, arriving on Wednesday in Rome with a picture pinned to his uniform of Omar al-Mukhtar, a resistance hero hanged by Italian occupiers in 1931.

Italian television on Thursday screened "Lion of the Desert," a 1981 film about al-Mukhtar which was banned in Italy until now.

Gaddafi, who as current chairman of the Africa Union will attend a G8 summit in Italy next month with U.S. President Barack Obama, also criticized the U.S-led war in Iraq during a speech earlier on Thursday to the Italian senate.

"Iraq was a fortress against terrorism, with Saddam Hussein al Qaeda could not get in, but now thanks to the United States it is an open arena and this benefits al Qaeda," he said.

He also compared the U.S. air strike on Tripoli in 1986, in which one of his daughters was killed, to an al Qaeda attack.

"What difference is there between the American attack on our homes in 1986 and bin Laden's terrorist actions?" he asked. "If bin Laden has no state and is an outlaw, America is a state with international rules."

Arguing that the world should have room for "regimes of all kinds" including "revolutionary" Libya, he asked: "What's wrong with North Korea wanting to be communist? Or Afghanistan being in the hands of the mullahs? Is not the Vatican a respectable theocratic state with embassies all over the world?"

Some senators from the opposition center-left managed to get Gaddafi blocked from speaking in the main chamber, forcing the speech to take place in a nearby annexe.

Gaddafi also complained that the world had not rewarded Libya for giving up its ambition of owning weapons of mass destruction.

"We cannot accept living in the shadow of intercontinental missiles and nuclear weapons, which is why we decided to change route," he told the senators.

"We had hoped Libya would be an example to other countries," Gaddafi said. "But we have not been rewarded by the world."

On Wednesday, his host Prime Minister Silvio Berlusconi said Libya agreed to supply more oil to Italy and the head of Libya's sovereign wealth fund said he was eyeing investments in Italian electricity and infrastructure companies and joint ventures with Italy in Libya.

Vale agrees 28% price cut with Nippon and Posco

2009-06-12T06:02:00.001-07:00

Vale agrees 28% price cut with Nippon and Posco

By Javier Blas in London and Peter Smith in Sydney

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

Vale of Brazil, the world's largest iron ore producer, yesterday agreed to a 28 per cent cut in annual prices for its ore sales to Japan and South Korean steelmakers, a smaller reduction than the 33 per cent offered by its main rival Rio Tinto.

The agreement with Nippon Steel of Japan and Posco of South Korea further damages the traditional benchmark system, which has been the cornerstone of the iron ore and steel industry for the past four decades. The first price agreement between a miner and a steelmaker has normally created a benchmark the rest of the industry follows.

The smaller cut for Brazil fine iron ore reverses last year's bigger price increase for Australian ore. Rio Tinto and BHP Billiton, which mine almost all their ore in Australia, have argued in the past that they deserved a higher price for their ore because of lower transportation costs from Australia to China than from Brazil to China.

The deal also complicates the negotiations between miners Vale, Rio Tinto and BHP and their Chinese customers, lead by China Iron and Steel Association. Beijing is demanding a 40-50 per cent cut and is refusing to take a smaller reduction.

The drop in iron ore prices for the year, which started in April, is the first since 2002. In the past six years the total price increase has been about

500 per cent.

After ore, coal is the second most important ingredient for steel, and annual contract prices for this commodity are also moving lower.

BHP Billiton, the world's biggest mining group, yesterday said it had cut annual contract prices for metallurgical coal by about 58 per cent from last year's levels, in line with the benchmark set when Nippon Steel negotiated cuts of up to 60 per cent in March.

BHP holds the number one spot in the global seaborne metallurgical coal market, with leading customers from Japan, India and western Europe.

The Anglo-Australian mining group said a "significant portion of contracts had been concluded after it agreed prices with key global customers" at a price of about $129 a tonne.

"Based on settlements to date, US dollar freight on board prices for prime metallurgical coal products are expected to decrease by approximately 58 per cent from 2008 levels," BHP said in a statement.

The first term-contract that set the industry benchmark was agreed in March, when Nippon Steel and BMA, a joint venture between BHP and Mitsubishi Corp, agreed a coal price of $128-$129 a tonne .

That dramatic drop marked an end to six years of climbing prices, which culminated in a record price of $300 a tonne for coal.

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BHP Billiton cuts coal contract prices by 58%

By Peter Smith in Sydney

Published: June 10 2009 08:26 | Last updated: June 10 2009 08:26

BHP Billiton, the world’s biggest mining group, has cut annual contract prices for metallurgical coal by about 58 per cent from last year’s levels, in line with the benchmark set when Japan’s Nippon Steel negotiated cuts of up to 60 per cent in March.

BHP holds the number one spot in the global seaborne metallurgical coal market with leading customers from Japan, India and western Europe.

The Anglo-Australian mining group said on Wednesday a “significant portion of contracts had been concluded after it agreed prices with key global customers” at a price of around $129 a tonne.

“Based on settlements to date, US$ FOB [freight on board] prices for prime metallurgical coal products are expected to decrease by approximately 58 per cent from 2008 levels,” BHP said in a statement. Metallurgical coal and iron ore are the key ingredients for making steel.

The first term-contract that set the industry benchmark was agreed in March when Nippon Steel and BMA, a joint venture between BHP and Mitsubishi Corp, agreed a coal price of $128-$129 a tonne.

That dramatic drop marked an end to six years of climbing prices, which culminated in a record price of $300 a tonne for coal.

Market conditions have changed since the commodities boom ended last year and as the global economy struggles to recover from the recession.

Metallurgical coal demand has been particularly bad due to the weakness in the steel market.

BHP this year announced production cuts of up to 15 per cent in metallurgical coal and 30 per cent reductions in manganese. It also scaled back its nickel and pellet operations.

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Lloyds prepares for up to 400 branch closures

By Jane Croft and Daniel Thomas

Published: June 9 2009 09:51 | Last updated: June 10 2009 01:21

Lloyds Banking Group is working on the basis that it may close up to 400 bank branches, including 164 Cheltenham & Gloucester outlets set to shut in November.

The bank has hired Jones Lang de Salle and CB Richard Ellis, the property consultants, to carry out work on a reorganisation of its property portfolio that is thought to include the branch closures and disposals.

Lloyds announced 1,660 job losses on Tuesday. It has previously said that some of its 3,000 branches will be closed during the next three years as it steps up its integration of HBOS.

The bank has never given a number for future branch closures and on Tuesday declined to comment on the figure of up to 400.

Lloyds said 833 jobs would be lost through the C&G branch closure programme.

The bank is also dropping Bank of Scotland and Intelligent Finance as mortgage brands for independent financial advisers, resulting in 159 job losses.

It is to move its personal loans product team from Chester to London by end of 2011, leading to 265 job cuts, mainly in Chester.

Lloyds added that the retail bank would combine certain roles such as product development, risk and finance, which will result in 168 job losses.

Black Horse Personal Finance business is reorganising its CarSelect business and will move from Cardiff to Birmingham.

Lloyds will also reduce Black Horse centres by 31. These changes will result in a total loss of 140 full-time jobs by October.

Unions were shocked by the scale of the closures and urged the government to use its stake in Lloyds to encourage the bank to move work back from India to the UK.

Steve Tatlow, assistant general secretary of LTU, the trade union at Lloyds, said: “It is wholly unacceptable that at a time when Lloyds is planning to make redundant many thousands of staff working for C&G, mortgages and in head office, it refuses to abandon its jobs-to-India policy.”

Unite, the UK’s largest trade union, called the closure “disgraceful”.

Lloyds said that all but 19 C&G branches had an existing Lloyds TSB branch within 400 metres.

One estimate has suggested that the network accounts for about only 6 per cent of Lloyds’ overall mortgage lending.

Helen Weir, group executive director of the retail bank at Lloyds said: “Cheltenham & Gloucester is a very strong brand. The strategic focus for C&G from now on will be to further strengthen its intermediary and direct savings businesses.”

Lloyds has promised to make more than £1.5bn ($2.4bn) in annual cost savings from its integration of HBOS and has already cut almost 3,000 jobs this year.

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Bazaars feel the wind of change

By Anna Fifield and Najmeh Bozorgmehr in Tehran

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

The crowded stone alleys of Tehran's main bazaar, a labyrinth of plates and carpets, spices and DVDs, have long been a conservative stronghold in Iran.

The bazaaris still wield economic and political power, albeit to a lesser extent than in 1979, when they were a strong force behind the Islamic revolution. But many appear to be turning against Mahmoud Ahmadi-Nejad, who will seek a second term as president in a hotly contested election tomorrow that has the economy at its core.

"Some are supporting Ahmadi-Nejad but they are few - he has lost his support in the bazaar," says Abbas, sitting behind the counter in his sock and underwear shop.

"It's because the bazaar has become so stagnant during the last four years. There are not many customers because no one has any money, and Ahmadi-Nejad has broken the backs of the businessmen by increasing taxes," says Abbas.

Mr Ahmadi-Nejad came to power in 2005 promising to share Iran's oil wealth among the people. He has done that by distributing everything from cash to potatoes, contributing to spiralling inflation and a sharp deterioration in ordinary Iranians' purchasing power.

Official statistics put inflation at 24 per cent and unemployment at 12.5 per cent, although independent economists suggest the reality is much worse.

Iran's income has dropped sharply since oil prices began falling from their peak of $147 a barrel 12 months ago, adding to the economic malaise. The International Monetary Fund estimates that growth will slow from 4.5 per cent last year to 3.2 per cent this year.

On the campaign trail in recent weeks, Mr Ahmadi-Nejad has defended his economic performance, saying he has helped improve the lives of the downtrodden.

"The foundations have been laid in these four years for a big economic jump," said Mr AhmadiNejad, who claims that the inflation rate is only 14 per cent.

Certainly, he has helped some ordinary people. Mr Ahmadi-Nejad's supporters have taken to the streets with banners saying: "Guardian of people's money, we support you."

But his three rivals have repeatedly criticised his economic management and have mocked his questionable use of statistics during televised debates.

Mir-Hossein Moussavi, his strongest opponent, is considered to have managed the economy relatively well while he was prime minister during the Iran-Iraq war in the 1980s. But he is still viewed with some suspicion because, at that time, he advocated socialist policies.

While Mr Ahmadi-Nejad has pledged to continue with his populist distribution-oriented policies, Mr Moussavi has pledged to oversee more rational economic management.

The economic plans of the former premier have so far been a mixture of socialist and open market policies. Should he get elected, Mr Moussavi's first priority will be dealing with housing problems as the root cause of poverty, while promising to promote a pro-business atmosphere and accelerate privatisation.

Of course, many people in the conservative bazaar continue to support the incumbent, who has held himself up as a protector of revolutionary ideals.

But there has been a palpable shift in allegiances in the bazaar, where some are supporting the other fundamentalist candidate, Mohsen Rezaei, or the reformist cleric Mehdi Karroubi. Most of those who have moved, however, are supporting Mr Moussavi.

"Ahmadi-Nejad has not been able to curb inflation - prices of everything have doubled in the last four years," says Fazlollah, who has been sitting in his stall selling men's suit fabric for 32 years. He voted for Mr Ahmadi-Nejad in 2005, but says he is supporting Mr Moussavi this time.

Business leaders believe that this will contribute to a shift in support towards Mr Moussavi outside the boundaries of the bazaar.

"The majority of the business community support Mr Moussavi and believe that if Mr Ahmadi-Nejad is re-elected the economic problems will be multiplied," said Saeed Shirkavand, deputy economy minister under the previous reformist government.

"Ahmadi-Nejad basically put aside expertise in running the country's economy, which led to unbalanced allocation of financial resources, replacing long-term plans with daily-based decisions and closing the centres which were making macro-economic decisions," said Mr Shirkavand.

Gholam-Hossein Shafei, the head of the chamber of commerce in the north-eastern city of Mashhad, added that the government had failed on the economy.

"The government's plan to promote short-term projects has been a failure," he said, "and led to [a] shortage of finance for industries, half of whom are now working with less than 50 per cent of capacity, while the rest are struggling or facing bankruptcy".

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KNOC considers Addax tie-up

By Ed Crooks and William MacNamara

Published: June 9 2009 03:00 | Last updated: June 9 2009 03:00

Korea National Oil Corporation is considering a take-over or asset deal with Addax Petroleum, people with knowledge of the situation said.

Addax, an oil exploration and production company active in west Africa and the Kurdistan region of Iraq, revealed yesterday that it had held "preliminary discussions" about a possible deal.

Interest from the state-owned South Korean group is another sign of the growing corporate interest in Kurdistan as hopes rise that the political deadlock obstructing oil exports from the area is breaking.

The Kurdish regional government said oil exports of 40,000 barrels per day from Addax's Taq Taq field and 60,000 b/d from the Tawke field operated by DNO of Norway began on June 1.

Heritage Oil, another small company active in the Kurdish region, and Genel Energy of Turkey are expected to announce a merger this morning to create the largest investor in the area.

Genel and Addax, which is dual-listed in London and Toronto and has a market capitalisation of C$5.6bn ($5bn), are developing Taq Taq as a joint venture.

KNOC has built a strong presence in Kurdistan, with stakes in five blocks close to Taq Taq, described by Addax as "potentially a world-class oilfield". The Korean group said last month it would begin drilling wells on its blocks in October.

The Chinese oil groups Sinopec, CNPC and CNOOC have also been suggested as possible bidders for Addax.

However, investing in the Kurdish region risks souring relations with Baghdad and jeopardising the oil and gas contracts in the rest of Iraq that have attracted Chinese interest.

KNOC was in April rejected as a possible bidder for contracts issued by the Iraqi government, possibly because of its presence in Kurdistan.

Although the oil has started flowing in Kurdistan after years of impasse, political concerns still linger around the region.

Ashti Hawrami, the regional government's oil minister, triumphantly led the June 1 ceremony marking the official start of Kurdistan oil exports, even as Baghdad's oil minister Hussein Shahristani continued to declare many Kurdistan oil licences illegal.

Mr Hawrami said that within four years Kurdistan would produce 1m b/d and $20bn in annual revenues.

Iraq's central government will receive all revenues from Kurdistan's oil, then return 17 per cent to Kurdistan. From this sum, operators such as Addax will in theory be paid.

But no mechanism has been agreed on how to pay the first exporters.

Other companies drilling in the region include OMV of Austria, Mol of Hungary, and Sterling Energy and Reliance of India.

KNOC is advised by Merrill Lynch.

Addax and Merrill Lynch declined to comment. Addax's shares rose 9 per cent in Toronto to C$39.26.

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Chain reaction a threat to Sanea fortune

By Andrew England in Abu Dhabi

Published: June 12 2009 03:00 | Last updated: June 12 2009 03:00

It has been a week when Maan al-Sanea's fortunes have dipped to new lows. For one of Saudi Arabia's most powerful businessmen, having his personal bank accounts frozen by the Saudi central bank and acknowledging liquidity problems with his Saad Group must have been bad enough.

But this week, it is understood the billionaire's woes have caused some international banks to close credit lines to him and his businesses. To make matters worse, the United Arab Emirates' central bank sent a circular to banks enabling them to offset exposure to him and one of his companies against available assets, while ordering banks in that Gulf state to "not allow any new facilities" to them.

The predicament of the Saudi, who is described as a hard negotiator, has shocked investors in the Gulf and beyond.

"From my point of view it is sad," says Tony Pidgley, the co-founder of The Berkeley Group, a UK housebuilder and long-term business associate of Mr Sanea. "It's a shock because I always thought he was a well-balanced, cautious man."

Mr Pidgley first met Mr Sanea some 20 years ago. Then Mr Sanea, 54, was little known inside or outside the Gulf kingdom. But he arrived at Berkeley's office with a team of English analysts, ensured they were satisfied with the management and took a stake in the British company.

In the years since, Mr Sanea's holding in Berkeley grew to slightly less than 29 per cent, while his profile soared both internationally and domestically to new heights - most notably when the Saudi acquired a 3 per cent stake in HSBC two years ago.

Today, however, the unexplained action by the Saudi central bank appears to have triggered a chain reaction that is threatening his empire. At least 20m of Mr Sanea's 32m shares in Berkeley have been placed by Citigroup and Credit Suisse this week, Mr Pidgley says. More shares have been sold in 3i infrastructure, while his stake in HSBC has also fallen to below 2 per cent since the beginning of the year.

Mr Pidgley says his company is largely unaffected, although two real estate joint ventures in London with a total value of about £20m between Berkeley and Mr Sanea's may have to be unwound.

The saga is the latest chapter in the life of a man born into an average Saudi family living in neighbouring Kuwait. He trained as a fighter pilot before entering the business world and building a multibillion dollar fortune. This year, he was listed on Forbes' world billionaires list with a personal net worth of $7bn, and his group has subsidiaries as far afield as the Cayman Islands, Geneva and Bahrain.

People who know the businessmen trace his rise through to his connections to the Algosaibi family, regarded as one of the most respected of Saudi Arabia's merchant families, but which is now facing its own travails.

Not only did he work for the family, but he married Abdelaziz Algosaibi, the daughter of one of the founders of Ahmad Hamad Algosaibi & Brothers.

Mr Algosaibi apparently took him under his wing and it is thought he helped finance Saad Group, which Mr Sanea founded in the 1980s. Upon Mr Algosaibi's death in 2003, Mr Sanea's wife is believed to have inherited a large sum of money, which is thought to have enabled Saad Group to accelerate its expansion.

By the end of 2008, Saad Group, which is named after Mr Sanea's son who was killed in an accident, had seen its assets increase to $30.6bn, according to rating agencies.

Still, a regional banker says Mr Sanea, a keen fisherman who bases himself in Saudi Arabia's oil-rich eastern province, was always classified as a bit of an outsider in the kingdom because he did not come "from blue-blooded stock of merchants".

Mr Pidgley remembers a man who was on hand to help in him in the past - not least during the 1990s UK property crash when Mr Sanea was on hand to provide funding to a joint venture. "It would be easy to say he has not behaved properly but from our perspective over about 20 years, we have always enjoyed [good relations]" Mr Pidgley says. "He's tough, you would expect a man like that to be tough."

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Insolvency laws go on trial

By Robin Wigglesworth in Abu Dhabi

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

After almost a decade of healthy growth rates, strong profits and only a few blips to speak of, the Gulf's corporate world has entered uncharted waters and several companies have foundered.

In Kuwait, two leading investment companies have already defaulted, and analysts warn that many more might be bankrupt. In the United Arab Emirates, two property developers in Ajman and Ras al-Khaimah have admitted they are insolvent, and across the emirates many other companies are said to be struggling to meet their commitments as cash flows are sapped by the crisis.

Even in Saudi Arabia, where the corporate world was expected to fare relatively well in spite of the economic headwinds, two leading family-owned groups have run into difficulties, triggering a rash of ratings downgrades and hushed speculation.

In spite of laws that often stipulate that companies that fail to meet financial commitments within a given period must declare themselves insolvent, further bankruptcies in the region could be hidden from plain view by embarrassed local creditors and authorities unwilling to force the issues, experts warn.

"Informal insolvencies are happening; you just don't hear about it. With a lot of the smaller companies you probably never will," says Hani Bishara, head of restructuring for the Middle East at Ernst & Young.

Experts say insolvencies and bankruptcies are likely to continue to emerge in the Gulf, representing an unusual challenge for a region unfamiliar with failing companies and ferocious financial crises.

But the experts warn that the local framework of courts, laws and regulations is inadequate. This keeps many cases informal and out of the legal system, and spooks local bankers, some of whom have lent largely on reputations and family names.

Some fear that a lack of transparency and poor legal recourse will scare away international capital at a time when it is needed.

"All countries have to have an orderly way of going through insolvency," says Christopher Niehaus, regional managing director and joint head of investment banking at UBS. "If not, it will take longer to resolve, be more haphazard, and ultimately be to the detriment of shareholders, creditors - pretty much everyone."

According to a recent report by Hawkamah, a Dubai-based non-profit organisation led by Nasser Saidi, chief economist of the Dubai International Financial Centre, Gulf authorities should therefore step up efforts to improve their legal framework.

The report, authored with the help of the World Bank, the Organisation for Economic Co-operation and Development and Insol International, an insolvency body, said the relevant laws and rules in the Middle East and North Africa scored an average of 88 out of 153. The average among OECD states is 124.

Oman was the highest ranked country, with a score of 105, while Saudi Arabia, the Gulf's economic powerhouse, scored 85 and the UAE, the second largest Arab economy and the main business hub for the region, scored only 74.

"The Gulf countries tend to have better insolvencies than the non-Gulf countries in the Middle East and North Africa, but we all need to improve our insolvency rules," Mr Saidi said. "And it's not just a matter of laws but of implementation."

Most cases never even go to court due to the length of time it takes to resolve, and are worked out between the company and its creditors on an ad hoc basis.

"The creditor enforcement rights are largely untested and there perhaps isn't confidence in the court system or insolvency regime to work through insolvency cases quickly or effectively," says Mr Bishara.

"That's why creditors here are hesitant to take action, as they don't know how well organised it will be, how much value will be destroyed in the process, or what the end result will be."

It takes 3½ years on average to settle an insolvency in the Middle East and North Africa, more than twice the average in the developed world, says the Hawkamah report.

Coupled with often tardy discovery of distressed situations, this means creditors - and others with interests in an insolvency, such as employees - often get a rough deal.

The average recovery rate in Middle East and North African bankruptcies is only 30 cents on the dollar, compared with an average of 55-60 cents in developed countries, says Robert Sanderson, a partner at KPMG, the accountants, and president of Insol.

Gulf corporate governance practices and company structures are often less sophisticated than in developed markets. Lawyers say that this complicates the winding-down process.

Hawkamah hopes it can encourage regional authorities to reform and improve their relevant regulatory and legal framework, to cope with the expected rise in bankruptcies. "The purpose is to improve insolvency regimes and creditor rights in order to mitigate the results of the financial crisis and be better prepared the next time there is a crisis," Mr Saidi says.

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Qatari bail-outs boost local bourse

By Robin Wigglesworth in Abu Dhabi

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

Qatar's most recent intervention in its banking sector has been met by hearty applause from investors, who have sent the Doha Securities Market into positive territory after heavy losses earlier this year.

Last month, Sheikh Hamad bin Jassem al-Thani, Qatar's prime minister, offered to buy up to $4.1bn of commercial banks' property investments, to "support the real estate sector . . . and allow banks to continue to play their vital role" in the country's development.

The intervention followed one in March, when the government bought nearly the entire domestic equity portfolio of the banking sector. And late last year the country's sovereign wealth fund spent $5.3bn on equity stakes in local banks.

"All three measures have proven that they're taking a proactive stance to managing the crisis," says Ahmed al-Hammadi, head of EFG-Hermes in Qatar. "They're not waiting for problems to emerge in the banking sector and spreading to the economy, but acted pre-emptively."

The local bourse has reacted jubilantly. After being one of the world's worst performing stock markets this year, Qatari stocks have gained 46 per cent over the past three months, outpacing MSCI Barra's Arabian, emerging and frontier markets indices. The Doha securities market index has risen 6.7 per cent this year.

Details of the latest banking rescue plan are likely to include mortgages, commercial property loans and direct real estate investments, bankers say.

Selling institutions will probably be able to choose between buying government bonds and taking cash, and have the option to buy back the assets at the selling price in the future - in effect a put option that caps their downside.

"Qatar has huge gas reserves and can afford to put money into the economy to shield it from the crisis," says Saleh Etrad Faraj, head of Nomura's operations in the country.

Though asset managers expect this rally will soon come under pressure from profit-taking and the light trading and sharp volatility of the Middle East summer, Qatar may weather the seasonal sell-off better than most Gulf markets.

"There might be hiccups along the way, but people are going to continue to invest in Qatar due to its strong position," says Mr Faraj. "I wouldn't be surprised if we see more help being provided, although Qatar banks remain in a strong position."

However, the triple bail-out of banks could have less welcome longer-term implications.

Like the "Greenspan put" - the former US Federal Reserve governor's strategy of aggressively lowering interest rates when faced by a falling stock market - the "Qatari put" could fuel moral hazard by fostering an expectancy that the state will bail out investors and banks in the future.

In the near term, investors have cause for rejoicing, but Qatar could still rue its nascent reputation for activism if banks are encouraged to lend and invest riskily - knowing that that the financial muscles of the state stands behind them.

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Investcorp taps into discounted US debt

By Robin Wigglesworth in Dubai

Published: June 9 2009 03:00 | Last updated: June 9 2009 03:00

Investcorp, the London and Bahrain-listed alternative asset manager, has dipped into the US discounted debt market, investing in a series of individual loans and senior debt backed by US commercial property.

Two Investcorp credit funds paid about 75-80 cents on the dollar for the loans, which carried a face value of about $171m, James Tanner, head of Investcorp's placement team, told the Financial Times.

"This is very much the premium end of debt," Mr Tanner said.

He added that the investments are in "individual loans that are still performing and that are backed by good tenants and thus cash flows".

Investcorp, which has previously owned Tiffany, the jewellery chain, and Gucci, the luxury goods group, has over the past two decades established itself as an important conduit for sovereign and private wealth in the Middle East into western hedge funds, private equity and real estate.

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Chinese imports keep dry bulk carriers afloat

By Robert Wright

Published: June 10 2009 22:57 | Last updated: June 10 2009 22:57

A surge of iron ore and coal imports into China has boosted the earnings of dry bulk carriers and halted the wave of bankruptcies and defaults that swept the sector late last year and early this year.

Average day earnings for the largest ships, known as Capesizes, have risen from about $17,000 on April 6 to a high of $93,197 on June 3. Prices have since fallen but were yesterday at $70,272 a day, almost four times the rate in early April.

The surge has brought relief to a sector that saw possibly the sharpest fall-off in earnings of any industry as a result of the economic downturn. Average Capesize earnings fell 99 per cent from a peak of $233,988 per day on June 4 last year to about $2,400 in December.

However, owners and shipbrokers fear the slowdown and the large number of dry bulk ships awaiting delivery could soon push the market back down.

“I’m not very optimistic about its sustainability,” Michael Bodouroglou, executive chairman of dry-bulk shipping company Paragon Shipping, said of the spike.

The rate rises follow a recovery of activity in China’s imports of iron ore. The suddenness of the surge has caused severe congestion at the busiest Chinese iron ore ports, such as Qindao. Because congestion prevents ships heading back to pick up new cargoes, it has helped to push prices up further.

The increase has been most pronounced for Capesizes because they had previously seen bigger falls in rates and are uniquely exposed to the steel industry.

Capesize ships carry only iron ore and coal, most of it destined for steel mills. Smaller ships have also benefited as charterers struggling to find affordable Capesizes have resorted to chartering smaller ships instead.

Rates for Panamaxes, the largest ships able to use the Panama canal, were $18,383 per day on Wednesday, up from about $12,000 in early April.

However, Dale Ploughman, chief executive of Seanergy, another dry bulk shipping company, said many of the imports had been by iron ore traders, rather than end customers. That could mean the ore was being imported to be stockpiled rather than used immediately. Large stockpiles can produce sudden falls in imports later.

Quentin Soanes, an executive director at London-based Braemar Shipping, pointed out that 18 Capesize ships had already been delivered this year, a further 106 were due for delivery and only 12 have been scrapped.

“We don’t think it’s sustainable,” Mr Soanes said of the spike. “There are still a lot of newbuildings that will deliver this year.”

The market recovery could prevent owners from scrapping old ships – a move that was widely considered necessary to prevent over-supply. Most of the dry bulk ships that were rested several months ago because they could not operate profitably have already returned to the market.

However, there remain some grounds for optimism. The market was now clearly functioning again, Mr Bodouroglou said. It seized up almost entirely last autumn as the credit crunch restricted trade finance.

“My feeling is that the industry’s fundamentals have come into play again,” he said.

Both Mr Ploughman and Mark Richardson, head of futures at London-based SSY Shipbrokers, also insisted there was real substance to the rally. The iron ore traders must believe there was a real market for their product to be importing it into China in such quantities.

“They don’t take a cargo of iron ore, which is 150,000 tonnes, and just hope they’re going to sell it,” Mr Richardson added.

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Swedish sports car group poised to buy Saab

By John Reed in London

Published: June 12 2009 03:00 | Last updated: June 12 2009 03:00

Koenigsegg, the Swedish producer of supercars, is set to buy Saab, General Motors' Swedish premium brand. GM is to announce it is in exclusive sales talks with the company and its allied Norwegian investors, a -person close to the talks said yesterday. The deal is likely to be closed by early summer.

The development would mark bankrupt GM's third move to dispose of a car brand in less than a fortnight, part of its plan to focus on four core brands. It follows last week's announcement of the sale of Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery and of Saturn to Penske Automotive Group, the dealership chain.

The decision follows talks this week between the three shortlisted bidders and GM at its European headquarters in Zurich. Koenigsegg "has the best overall offer", the person close to the deal said. Further details were not immediately available. The privately owned company, based near Malmo, sold 18 cars last year and is said to be interested in applying its knowledge of nichemodels to a higher-volume carmaker.

GM is putting more money into the deal than any buyer, a second person familiar with the sale said this week, pledging $500m of assets and cash.

Koenigsegg beat bids from Renco, US investor Ira Rennert's holding company that bought and turned round the maker of Humvee, and Merbanco, a group of private investors in Wyoming. About 10 groups toured Saab's plant in Trollhattan, near Gothenburg.

GM Europe and Koenigsegg could not be reached for comment.

Saab cars have ardent fans but the brand was widely seen as neglected under GM's 19-year stewardship.

GM'sadvertising campaign playing up Saab's aviation heritage failed to ignite sales which peaked at 133,000 in 2006 and totalled just 98,000 last year. GM has not seen a profit at Saab since buying its stake in 1990.

Saab is seeking to slash its debt by 75 per cent under court supervision. Its new buyers are expected to announce agreements on engines, manufacturing and technology with GM, which is in talks to sell the rest of its European operations, grouped round Germany's Opel, to a group led by Magna International of Canada.

GM's contribution to a spun-off Saab includes production tooling for a new version of its flagship 9-5 model slated to premier in Frankfurt this year, plus cash of about $150m.

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Telenor outraged by bailiff threats in Russia

By Catherine Belton in Moscow

Published: June 9 2009 03:00 | Last updated: June 9 2009 03:00

Bailiffs raised the pressure on Telenor's main Russian investment yesterday after threatening the immediate sale of the Norwegian company's strategic stake in Vimpelcom, the mobile phone operator.

Russia's federal bailiff service said it had drawn up documents to auction the stake in the "nearest future".

It was the first such statement since a Siberian court issued a $1.7bn ruling against Telenor in March and froze its Vimpelcom shares in preparation for a potential sale amid a stand-off with its Russian partner in Vimpelcom, Mikhail Fridman's Alfa Group.

The legal dispute is being watched closely by investors as a test for Russia's investment climate.

Shares in Telenor fell more than 4 per cent.

The company said any such transaction would be "outrageous" while it was still appealing against the $1.7bn ruling, which it has refused to pay, claiming it has "no merit".

It has claimed that the suit, filed by a minority investor in Vimpelcom, is an attempt by Alfa to seize its shares. Alfa denies any connection to the suit, which came amid a complex five-year legal battle between the two partners over Vimpelcom and Kyivstar, the Ukrainian mobile operator.

Analysts said any imminent move to sell Telenor's shares would damage Russia's investment climate and again cast doubt on Russian President Dmitry Medvedev's pledge to uphold the rule of law.

They said the bailiffs' statement, which was unusual for the service, might be a pressure tactic to encourage Telenor to divide up its assets with Alfa.

It came after senior Telenor executives held meetings with top Russian officials at the St Petersburg Economic Forum over the weekend to press their case in the stand-off, according to a person familiar with the situation.

No one could be reached for comment at the federal bailiffs' service.

Vladimir Putin, the Russian prime minister, called last month on the two sides to solve their dispute by legal means. This followed a meeting with Jens Stoltenberg, his Norwegian counterpart.

Mr Stoltenberg had called on the Russian government to ensure that no sale took place until the appeal process was exhausted. But Mr Putin gave no such assurances publicly.

Any forced sale ahead of hearings on Telenor's appeal "would send a pretty awful signal about the prospects for foreign investment in Russia", said Roland Nash, head of research at Renaissance Capital, the Moscow investment bank.

The escalation of the stand-off is another consequence of the global financial crisis, which has left western markets closed to Russian companies and Russian businessmen with little incentive to behave according to western standards, he said.

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Norwegian model of mineral wealth management offers long-term success

Published: June 9 2009 03:00 | Last updated: June 9 2009 03:00

From Andrew Carlson.

Sir, Martin Sandbu and Nicholas Shaxson (“Give the people their resource wealth”, June 5) manage to dismiss one of the world’s great socio-economic achievements of the modern era with a mere sentence. The effective management by the Norwegian government of their country’s vast mineral wealth has allowed Norway to rise from one of Europe’s poorest countries at the end of the second world war to one of the world’s wealthiest countries today. As one of the few success stories when it comes to mineral wealth management, the Norwegian model offers a far longer-term solution in terms of economic development when compared with the authors' solution of directly disbursing mineral revenue to a country’s citizens.

With the establishment of the country’s sovereign wealth fund in 1990, Norway has been particularly successful in avoiding various aspects of the “Dutch disease” and has shown itself to be a model for other countries seeking to manage their resource wealth prudently so that they can achieve maximum domestic economic development. The Norwegian government’s mandate that its fund invest its assets primarily in international securities has allowed the country to achieve a high degree of economic growth and diversification while at the same time helping to lay the groundwork for low inflation and unemployment.

Instead of proposing various untested methods for managing a country’s mineral wealth, the authors should instead spend their time advocating increased support for the Norwegian government’s oil for development programme, as its method has clearly been proven successful with the passage of time.

Andrew Carlson,
University of Kansas School of Business,
Lawrence, KS, US

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Italy's leaders welcome Gaddafi spending spree

By Guy Dinmore in Rome

Published: June 12 2009 03:00 | Last updated: June 12 2009 03:00

Muammer Gaddafi yesterday launched a shopping spree in Rome on his fence-mending visit to Libya's former colonial ruler.

The Libyan leader investigated further stakes in Italian industry and infrastructure via his $70bn (€50bn, £43bn) sovereign wealth fund.

Despite a few political protests by opposition parliamentarians, students and members of the Jewish community driven out of Libya in the 1970s, Italy's centre-right government celebrated Mr Gaddafi's red carpet visit - his first since taking power in 1969 - as a welcome boost for a struggling Italian economy.

How the world is changing was not lost on Franco Frattini, Italy's foreign minister, who at the same time was hosting a meeting of G8 development ministers focused on improving aid to Africa and examining the impact of the global financial crisis.

Libya had emerged as an important donor in sub-Saharan Africa, Mr Frattini said, even as Italy's "financial constraints" had forced it to curtail - but, it insists, not abandon - the ambitious aid goals it set out at the Group of Eight summit at Gleneagles in 2005.

"Libya at an international level is taking on a more co-operative role," Mr Frattini told the Financial Times. He disclosed that Mr Gaddafi had agreed to work with Italy in trying to stabilise Somalia, where the embattled government was fighting militant Islamists.

Mr Gaddafi, who renounced weapons of mass destruction in 2003, will mark another milestone in his international rehabilitation by attending the G8 summit in Italy next month as president of the African Union.

Among Mr Gaddafi's 200-strong entourage in Rome was Abdulhafid Zlitni, chairman of the Libyan Investment Authority, who said Libya was looking at investing in Italian industry. He named Enel - Europe's second largest power utility - and Impregilo, a construction company. Libya was also "following the value of Telecom Italia stock".

Claudio Scajola, Italy's minister of economic development, said that "in this new climate of friendship" Libya might also increase its stake in Eni, Italy's energy major, which sources the largest share of its global crude oil production from Libya. The construction of four free-trade zones for Italian companies in Libya was also on the agenda, plus agreements on solar energy and infrastructure.

Italy is Libya's largest trade partner. Libya has held long-term stakes in Fiat, the carmaker, and Juventus football club. It recently helped Unicredit in the bank's capital-raising by building a 4.6 per cent stake, and announced its intention to buy up to 10 per cent of Eni.

Silvio Berlusconi, prime minister, clinched drawn-out efforts to take relations with Tripoli to a new level last August when he visited Libya, apologised for Italy's 1911-43 colonial occupation and pledged $5bn in compensation.

In return, Italy gained priority in Libyan infrastructure projects and - of significant political value to Mr Berlusconi - an immigration deal where Libya would take back African refugees intercepted at sea by Italian forces on their way to Italy. That agreement was condemned by the Italian Catholic church and the United Nations refugee agency.

Mr Gaddafi praised his hosts for righting the wrongs of colonial rule and lectured them on the ills of the past. He upset some Italians on his arrival by pinning a photograph to his chest of Omar al-Mukhtar, a resistance hero executed by Italian Fascists in 1931.

Resistance by some Italian lawmakers obliged Mr Gaddafi to address the Senate not in the main chamber but elsewhere. Mr Gaddafi spoke of terrorism, saying people should understand the reasons behind it. He did not directly mention the 1988 bombing of the Pan Am flight over Lockerbie, Scotland, for which Libya accepted responsibility.

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PZ Cussons looks to clean up in Nigeria

By Jenny Wiggins

Published: June 10 2009 23:12 | Last updated: June 10 2009 23:12

When Imperial Leather soap was introduced into the UK in the late 1930s by Paterson Zochonis, scented with a fragrance commissioned by a Russian Count from London perfumers Bayleys, the company was already well-established in West Africa.

Almost 80 years later, Nigeria is the single most important contributor of revenues and the fastest-growing part of the group, whose origins date back to the 1870s when Scot George Henry Paterson and Greek George Basil Zochonis set up a trading post in Sierra Leone.

Chief executive Alexander Kanellis has big plans for the Nigerian operations. PZ Cussons, as the group is now known, is trying to develop the retailing sector in Nigeria so that it can more easily sell its refrigerators, microwaves, televisions and air conditioners – sold under the brand “Haier Thermocool” (a joint venture with China’s Haier Group) – to the country’s expanding middle class.

“There is no modern retail trade at all,” claims Mr Kanellis, who became chief executive in 2006 after more than a decade in brand and regional management jobs with the company in Nigeria, Indonesia and Thailand.

PZ Cussons opened its first “HT Cool World” retail store in Lagos two years ago, after introducing electrical goods to the country in the mid-1970s. There are now five stores in three cities, including Abuja and Kano. Before it started opening the stores, through which it sells less than 3 per cent of its white goods, traders would go into its depots and buy goods on credit before selling them in the open market or small shops.

In a trading statement on Wednesday, PZ Cussons eased analysts concerns about weakness in the Nigerian economy following declines in the value of the Naira against the US dollar and sterling.

It stressed that trading in its Nigerian division continued to be strong thanks to a resurgence in oil prices, which are a key driver of the Nigerian economy.

Analysts are becoming increasingly confident of the company’s ability to increase its profits following investment in Nigeria and the UK.

Goldman Sachs this month raised its rating on PZ Cussons from “sell” to “neutral”, noting the group’s “strong earnings growth outlook, especially in Africa”. Its shares, which on Wednesday gained 1¼p to 180¾p, have risen 23 per cent over the past six months, outperforming the FTSE 100, which is up 3 per cent.

Mr Kanellis foresees more than a decade of growth for PZ Cussons in Nigeria, where it is the leading supplier of refrigerators and freezers, claiming that of the country’s 22m households, only 40 per cent own refrigerators. He argues that the remaining households will buy refrigerators as electricity becomes more widely available, although the company has moved to widen the target market for electrical goods by selling generators.

PZ Cussons also supplies cleaning products, and Mr Kanellis says that rising incomes bode well for sales of its laundry detergent brands, such as Zip and Jet. “As people get richer they wash their clothes every day,” he says.

The company is also building a UHT milk factory in Nigeria to strengthen its nutrition business. It already has one factory making powdered and evaporated milk following a joint venture, Nutricima, with Glanbia in 2003. Analysts say the venture, which has been losing money in part due to record high global milk prices, is expected to make a small profit this year.

Africa (mostly Nigeria but also Ghana and Kenya) accounts for 46 per cent of group revenues, and 34 per cent of its operating profits. Its European business – mostly the UK – contributes more than half of its profits.

In the UK, PZ Cussons’ £75m purchase of the Sanctuary Spa brand – which sells body care products through retailer Boots – from HG Capital last year helped boost sales over Christmas. Analysts say that Sanctuary is attracting consumers who are trading down from more expensive products.

The family-controlled company (the Zochonis family retains a 51 per cent stake) is hoping a new £26m “personal wash centre of excellence”, opened in February at its headquarters on the outskirts of Manchester, will improve the quality and range of its products, which include Carex handwash and Original Source shower gels. It wants to develop more “natural” products, as well as ranges targeted at young people.

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Shell reaches $15.5m settlement with Nigerian activists

By Harvey Morris in New York

Published: June 9 2009 03:00 | Last updated: June 9 2009 23:49

Royal Dutch Shell and the families of Ken Saro-Wiwa, an executed Nigerian opposition leader, and other activists hanged by the military government in 1995, agreed a $15.5m settlement in a court case stemming from allegations the oil group was complicit in the executions.

The settlement, in which Shell and its Nigerian subsidiary denied any liability, ended a 13-year legal campaign by relations and supporters of Saro-Wiwa to hold the company accountable.

A spokesman for the plaintiffs said $5m (£3.1m) of the settlement to be paid by Shell would be put into a trust fund to promote education and welfare in the Ogoniland region of the Niger delta.

The balance would be shared among 10 plaintiffs after legal costs were met, the spokesman said.

Saro-Wiwa and eight other Ogoni activists were hanged after leading a campaign against Shell's activities in the region and the then military-led government of General Sani Abacha.

Shell, which said the civil case before a federal court in New York was without merit, always insisted it had no role in the execution and had appealed for clemency after the death sentences were handed down by a military tribunal.

Oil production stopped in Ogoniland in 1993 when Shell was forced to cease operations amid mass protests led by Saro-Wiwa against the environmental damage alleged to have been inflicted on the region by the company's operations.

The plaintiffs had alleged that at the request of Shell, and with Shell's assistance and financing, Nigerian soldiers used deadly force and massive, brutal raids against the Ogoni people throughout the early 1990s to repress a growing movement against the oil company.

The plaintiffs' spokesman described yesterday's outcome as a fair settlement that spared the families of Saro-Wiwa and his fellow activists up to four more years of litigation if the case had gone to trial.

The case was brought under the Alien Tort Statute, a 1789 law that gives non-US citizens the right to file suits in US courts for international human rights violations. The case had been due to go ahead after Shell failed to have the charges dismissed.

Commenting on the establishment of the $5m trust fund, Ken Saro-Wiwa Jr, son of the late activist, said: "In reaching this settlement, we were very much aware that we are not the only Ogonis who have suffered in our struggle with Shell."

Paul Hoffman, a human rights attorney in the case, said: "This settlement is only a first step towards the resolution of still-outstanding issues between Shell and the Ogoni people."

A statement by the plaintiffs' lawyers after the settlement was announced said the settlement was a step towards holding corporations accountable for complicity in human rights violations, wherever they were committed.

"We hope that this settlement provides another building block in the efforts to forge a legal system that holds violators accountable wherever they may be and prevents future violations," the statement said.

Although it acknowledged no wrongdoing, Shell said it agreed to settle the lawsuit in the hope it would aid the "process of reconciliation", according to a statement quoted by Associated Press. "This gesture also acknowledges that, even though Shell had no part in the violence that took place, the plaintiffs and others have suffered," Malcolm Brinded, Shell's director of exploration and production, said.

The plaintiffs' lawyers stressed the settlement only reflected the claims of their clients and not those of the Ogoni people, although the outcome had the potential to benefit thousands of other people in Ogoni.

"The Ogoni people have many outstanding issues with Shell, and it is Shell's responsibility to resolve those issues with the Ogoni people themselves. The plaintiffs do not speak for the Ogoni people, nor have they attempted to resolve those issues," the lawyers said.

The case had been due to go to trial on May 27 but was repeatedly delayed.

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Armenian “Gohars” will shine in Syria
01:25 pm | Today | Culture

The "Gohar" Ensemble will perform on July 9 at the Opera Theatre in Damascus and the historical fort amphitheatre in Aleppo on July 16-17.

Despite the large number of musicians (15 soloists and 12 dancers in addition to the 150-member choir and orchestra), the "Gohar" Ensemble is the only Ensemble in Armenia that has performed in Lebanon, Cyprus, Russia, Turkey, the U.S. and Canada in the past couple of years.

The DVD version of "Gohar" Ensemble's performances contains information about the Ensemble in Armenian and Armenian with English letters and are distributed more to Armenian schools in the Diaspora than sold.

The concerts of "Gohar" stir crowds and the audience joins the group as they sing and dance on stage.

The "Gohar" Ensemble was founded on December 7, 1999 in Gyumri under patronage of Lebanese Armenian Gohar Khachaturian. The "Gohar" choir and orchestra were founded afterwards. The free musical instruments and instruction gave many talented children the opportunity to receive a substantiated musical education.

Many of the children are continuing their education in the most high-profile music education institutions abroad and some have gone on to become full members of the "Gohar" symphonic choir and orchestra. The creation of the "Gohar" symphonic choir and orchestra is greatly connected to Cyprus-Armenian conductor, composer and educator Sepu Abgarian. Leaving Cyprus, he came and got "enlisted" in the "Gohar" orchestra.

Many of his compositions are part of the list of songs performed by the "Gohar" symphonic choir and orchestra. Sepu Abgaryan has also written numerous symphonic, choir and instrumental songs.

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Real Madrid's business model

Published: June 12 2009 03:00 | Last updated: June 12 2009 03:00

Real Madrid's £80m ($132m, €94m) purchase of Cristiano Ronaldo from Manchester United will doubtless be portrayed, in some quarters, as megalomaniacal madness. In fact, it is part of a carefully thought-out and rather clever business strategy.

About seven years ago Florentino Perez, who has just reassumed control of the football club, built the first team of Real international superstars or " galácticos " - including Zinedine Zidane of France, Roberto Carlos and Ronaldo of Brazil, David Beckham of England and Luís Figo of Portugal. Critics denounced this as a team of show-boaters - the Harlem Globetrotters of football. They pointed out that Mr Perez had sanctioned the sale of a key member of the side, the unglamorous, ungalactic defensive midfielder Claude Makelele - and that Real's fortunes declined shortly afterwards. The galácticos never won very much.

But the critics missed the point. The galácticos were part of a commercial strategy that hugely boosted Real's income, via guest appearances, the sale of merchandise and television rights. Real now have the highest revenues of any football club in the world, and these have doubled since 2002.

I once discussed the strategy with Real's commercial director, who compared football with the film industry. Real, he argued, was a content provider - just like a Hollywood studio. So just as it was rational for a film studio to pay millions to get a box-office star such as Tom Cruise in a movie, so it was rational for Real to pay huge amounts to sign a Beckham or a Zidane. Their celebrity could then be leveraged into higher sales. Real were already looking forward to the age of video-enabled mobile phones. Their dream was to build up a global community of Real fans. Then whenever Beckham or Zidane scored, these fans would get a text message and would be able to watch the goal on their phones - for a price.

It seems to me, seven years on (I had this conversation in 2002, while researching The Economist survey of world soccer - tough assignment), that the technology is just about there. The original galácticos have moved on - although Beckham played quite well for England on Wednesday night. But a new generation of content-providers is about to arrive in the form of Ronaldo and Kaka, the star of the Brazilian national side.

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Broadband ‘lands’ in east Africa

By Barney Jopson in Nairobi

Published: June 11 2009 23:32 | Last updated: June 11 2009 23:32

East Africa will on Friday move closer to ending its isolation as the world’s last region not connected to the global broadband network when a fibre optic undersea cable “lands” at the Kenyan port of Mombasa.

The region at present relies on satellite internet links that are slow, unreliable and often prohibitively expensive, problems that have inhibited business activity, public sector efficiency and the spread of internet access.

The connection of two undersea cables to Kenya’s domestic fibre network promises to deliver the kind of infrastructural transformation rarely seen in Africa, a continent infamous for bad roads, ports and power supplies.

At a “landing” ceremony in Mombasa on Friday, Mwai Kibaki, the president, is due to mark the arrival of the $110m Teams submarine cable, which is part-owned by Kenya’s government and Kenyan telecoms companies, including affiliates of Vodafone and France Telecom.

Bitange Ndemo, senior official at the ministry of information and communication, said: “We used to call such huge infrastructure projects white elephants because the planning was poor, they never got finished and they never benefited the people. This is the first time we’ve had such a major project go through.”

The arrival of Teams follows that of Seacom, a rival $600m cable project, wholly owned by private investors, which connects several points on the east African coast directly to London, Marseilles and Mumbai.

“The cables are the great hope for this economy. Look around and everything else is down,” said Aly Khan Satchu, a Nairobi-based financial analyst. Other likely beneficiaries are Ethiopia, south Sudan, Uganda, Rwanda, Burundi, Tanzania and Mozambique.

Seacom was due to be operational in July, said Jean-Pierre de Leu, its senior vice-president. Teams, which links to Fujairah in the United Arab Emirates, should be operational by September, said Mr Ndemo.

The cables could reduce wholesale internet prices in Kenya from their current level of about $3,000 per megabit per month to as little as $100, said Kai Wulff, head of KDN, a data communications group and Teams shareholder.

Access Kenya, another shareholder and an internet service provider, has bought capacity on both cables, said Jonathan Somen, its managing director. Once the cables are operational the company’s customers could expect to get twice as much bandwidth for the price they pay today, he said.

Kevit Desai, chief executive of the Kenya Private Sector Alliance, a business federation, said the potential was huge, but stressed: “The cables are really enablers, not profit centres.”

To reap the maximum benefit he said that prices for end users must be as “internationally-competitive” as wholesale connection prices.

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改正著作権法が成立、裁定緩和や検索サイトのキャッシュ生成など実現
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　通常国会で審議されていた著作権法の改正案が2009年6月12日、参議院本会議で可決・成立した。2010年1月1日に施行される。

　今回の改正著作権法では、裁定申請中の著作物の利用に関する規定を新設（第六十七条の二）。権利者の所在が不明の著作物を二次利用する場合、文化庁に担保金を供託することにより、裁定を受ける前でも二次利用を可能にする。従来の裁定制度では、申請前に「相当な努力」を払って権利者を探すことが求められており、二次利用にかかる手間が過大であるとされていた。著作物の二次利用をめぐっては、テレビ局が過去に制作・放送した番組をインターネットなどで配信する取り組みが進められており、こうした動きを後押しするものとなっている。

　検索サイト関連では、キャッシュ生成に伴う複製に関する規定が設けられた（第四十七条の六）。検索サイトを業として行う者は、検索や検索結果の提供に必要な範囲内で、インターネット上のコンテンツを自社サーバーに複製し、データベースとして保管することができる。従来は検索サイトの構築・運用に伴うキャッシュの扱いが著作権法上明文化されておらず、検索サイトを運営する事業者などから懸念の声が出ていた。

　違法コンテンツ対策では、いわゆるダウンロード違法化規定を追加（第三十条第一項）。著作権を侵害しているインターネット上の録音／録画コンテンツを、侵害の事実を知りながらダウンロードし、ユーザーのパソコン内のHDDなどに複製する行為を違法とした。従来は、違法コンテンツであっても私的利用の範囲内であれば合法的にダウンロード、複製できる規定となっていた。

　この規定をめぐっては、ネットユーザーを中心に反対意見があった。これを受け、「違法配信と知らずに録音又は録画した著作物の利用者に不利益が生じないよう留意するとともに、本改正によるインターネット利用への影響について、状況把握に努めること」「本改正に便乗した不正な料金請求等による被害を防止するため、改正内容の趣旨の周知徹底に努めるとともに、レコード会社等との契約により配信される場合に表示される識別マークの普及を促進すること」という付帯決議が議決されている。また、同規定に違反した場合の罰則規定は設けず、ネットユーザーに一定の配慮をしている。

　このほか新設／改訂された主な内容は次の通り。

* 国立国会図書館において、古い資料の劣化を防ぐ目的で複製／データベース化し、アーカイブを構築する（第三十一条第二項）。
* 視覚障害者が著作物を認識できるよう、文字を音声に変換して複製したり、それをネット上にアップロードしたりできるようにする（第三十七条第三項）。
* 聴覚障害者が著作物を認識できるよう、音声を文字に変換して複製したり、ネット上にアップロードしたり、貸し出し用として複製したりできるようにする（第三十七条の二）。
* インターネット上のサーバーで故障や混雑が起こるのを予防したり、故障したサーバーを復旧したりするために、サーバー上のデータを複製できるようにする（第四十七条の五第一項）。
* インターネット上のプロキシーサーバーにおいて、送信を効率的に行うために必要な範囲内でコンテンツの複製を認める（第四十七条の五第二項）。
* 調査・研究などのために、インターネット上などの大量の著作物をコンピューターで解析する場合、必要と認められる限度内で複製を認める（第四十七条の七）。
* 著作物の複製物をパソコンなどで合法的に利用する場合に、情報処理を円滑に効率的に行うために必要な範囲内で、パソコン内にキャッシュを生成することを認める（第四十七条の八）。
* 美術／写真の著作物を譲渡／貸与しようとする場合に、作品の所有者やその委託を受けた者がDRMを施した上でネットオークションの画面などに画像を掲載することを認める（第四十七条の二）。

　このほか付帯決議において、「インターネット配信等による音楽・映像については、文化の発展に資するよう、今後見込まれる違法配信からの私的録音録画の減少の状況を勘案しつつ、適正な価格形成が促進されるよう努めること」という項目が盛り込まれている。

BRICs Buying IMF Bonds to Join ‘Big Leagues,’ Goldman Says

2009-06-11T06:17:00.001-07:00

BRICs Buying IMF Bonds to Join ‘Big Leagues,’ Goldman Says
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By Lester Pimentel and Valerie Rota

June 11 (Bloomberg) -- Brazil, Russia, India and China’s plan to shift some foreign reserves into International Monetary Fund bonds may be more a signal of their growing financial clout than a lack of demand for U.S. assets.

“They’re saying they are part of the big leagues,” Alberto Ramos, an economist at Goldman Sachs Group Inc., said in a telephone interview from New York. “They’re not buying IMF bonds to diversify reserves. They want to be seen as having a large voice” in global markets, he said.

Russia and Brazil announced plans yesterday to buy $20 billion of bonds from the IMF and diversify foreign-currency reserves. China will purchase $50 billion and India may announce similar funding, Brazil’s Finance Minister Guido Mantega said. The countries are seeking a stronger voice in international financial institutions such as the IMF, according to He Yafei, a vice foreign minister at China’s Ministry of Foreign Affairs.

Treasuries declined yesterday, pushing benchmark 10-year yields to the highest since October, after the government sold $19 billion of the securities and Russia said it may move out of U.S. debt to buy the IMF bonds. The so-called BRICs, an acronym coined by Goldman Chief Economist Jim O’Neill in 2001 for the biggest emerging markets, have combined reserves of $2.8 trillion and are among the largest holders of Treasuries.

‘Much Bigger’

“If this was the beginning of something much bigger, then the market would front-run that,” said Dominic Konstam, head of interest-rate strategy at Credit Suisse Securities USA LLC, in an interview from New York. “It wouldn’t be in the interests of Russia or China to watch the value of their assets go down.”

The 10-year yield climbed to as high as 3.99 percent yesterday from 3.86 percent, according to BGCantor Market Data. The yield has surged from 2.21 percent on Dec. 31 as the U.S. steps up debt sales to finance a record budget deficit and pull the economy out of the deepest recession since the 1930s.

Treasuries slid yesterday in part because the announcement by Russia and Brazil was a “sudden shock,” said David Spegel, head of emerging-market strategy at ING Groep NV in New York.

“We are asking to increase the voice and representation of emerging economies,” He said at a June 9 briefing for President Hu’s Jintao’s participation in a BRIC summit next week in Russia.

China has 3.66 percent of votes in the IMF, Russia 2.69 percent, India 1.89 percent and Brazil 1.38 percent, according to the fund’s Web site. The U.S. has a 16.77 percent voting power.

Selling Treasuries

Alexei Ulyukayev, first deputy chairman of Bank Rossii, said Russia would sell some of its $140 billion of Treasuries to make room for the purchase of the IMF bonds. Mantega said Brazil’s central bank would decide which assets to sell from its reserves portfolio for the transaction.

China’s State Administration of Foreign Exchange said last week that it’s “actively” considering buying as much as $50 billion of the IMF bonds.

BRIC nations can’t pull out of the Treasury market because there “aren’t a lot of alternatives out there that are AAA rated,” Spegel said.

“With their reserve levels so high -- $2 trillion from China -- where are they going to put their money?” Spegel said in a telephone interview.

The IMF board may consider late this month or in July the proposal to sell the notes, which would be the fund’s first issue, IMF spokeswoman Conny Lotze said today by e-mail. The plan will likely determine other aspects regarding use of the securities, such as whether they can be traded among countries much like U.S. Treasury bonds.

Russia Meeting

The debt will pay a yield similar to U.S. Treasuries and will be denominated in the fund’s basket of currencies, known as Special Drawing Rights, Mantega said yesterday in Brasilia. The IMF calculates the value of SDRs daily, with 44 percent weighted toward the dollar, 34 percent to the euro and the remainder split between the yen and the pound, according to its Web site.

Officials from the BRIC nations are scheduled to meet next week in Yekaterinburg, Russia, where they plan to discuss the status of the dollar as the world’s reserve currency. Ulyukayev said Russia will sell Treasuries “because a window of opportunity for working with other instruments is opening,” according to Interfax news wire. The remarks were confirmed by a Bank Rossii official who declined to be named, citing bank policy.

Geithner Trip

Treasury Secretary Timothy Geithner said in Beijing on June 2 there will be enough demand for record sales of U.S. debt. The U.S. budget deficit is projected to reach $1.75 trillion in the year ending Sept. 30 from last year’s $455 billion, the Congressional Budget Office says.

The spread between 2- and 10-year Treasuries, which reached a record 2.81 percentage points this month, averaged 0.69 percentage points during the fiscal year 2001. During the four- year period of government budget surpluses from 1998 through 2001, the spread averaged 0.22 percentage points.

Geithner met with Chinese officials after Premier Wen Jiabao called in March for the U.S. “to guarantee the safety of China’s assets” and central bank Governor Zhou Xiaochuan proposed a new global currency to reduce reliance on the dollar.

BRIC nations have been adding to their foreign reserves over the past month to stem currency rallies sparked by speculation that the developing nations will help lead the world out of recession. The Brazilian real is up 20 percent against the dollar the past three months. Russia’s ruble has gained 13 percent and the Indian rupee has climbed 10 percent.

The four countries increased international holdings by more than $60 billion last month, according to data compiled by central banks and strategists.

“They want to be seen as good citizens of the IMF,” Goldman’s Ramos said. “It’s an investment that can empower them in the institution.”

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【足利事件】「誠に遺憾で申し訳ない」栃木県警本部長
2009.6.11 14:41

　足利事件で菅家利和さん（６２）が釈放されたことを受け、栃木県警の石川正一郎本部長は１１日、「真犯人と思われない方が、長期間にわたり刑に服されることになったことについては、誠に遺憾で申し訳ないと考える」との談話を文書で発表した。

　県警が菅家さんの逮捕や服役に関して謝罪したのは初めて。

　また、高田健治刑事部長が、文書を発表した経緯について説明。「刑の執行停止を厳粛に受け止め、菅家さんや関係者、県民の方々に早期に謝罪することが適切だと判断した」と述べた。菅家さんへの直接の謝罪について問われると、「現段階では菅家さんとは連絡をとっておらず、抗告審などの推移を踏まえ、適時適切に対応する」とした。

　菅家さんの逮捕に至った当時の捜査などについては「現在、事件の問題点を検討するチームを設けており、結果を公表したい」と話した。

----------------------------
農村システム協の不正支出…天下りの幹部、お手盛り給与

　農林水産、経済産業、総務の３省が所管する社団法人「日本農村情報システム協会」（東京都豊島区）の不正支出問題。

　自己破産の方針を決めた協会は今後、通産省（現・経産省）ＯＢの副会長（７９）が代表を兼務する任意団体に不透明な業務委託を続けていたとして、６億円以上の委託費返還を求める方針だが、実はこの任意団体の恩恵を被っていたのは副会長一人ではない。破綻(はたん)の背景には、中央省庁ＯＢらが巨額の補助金という「甘い汁」を吸う構図が見え隠れする。

　◆二つの財布◆

　農水省などの指摘によると、協会は、同じビル内にある任意団体「情報システム技術会議」にコンサルタント業務などを委託、うち６億４６００万円は水増しなど不正支出だったという。

　副会長は２００５年に非常勤になるまで年１０００万円の給与を受け取る一方、約２０年前から今年３月まで技術会議の理事長職に就き、同会議からも年１２００万円を受け取っていた。

　“二つの財布”を持っていたのは副会長ばかりではない。

　農水省を退職後、複数の公益法人を「渡り」、０６年に協会に入った常務理事（６４）も、就任初年度は協会から８００万円の年収を得ながら、技術会議からも顧問名目で２５０万円を受領していた。長男と次男がそれぞれ協会に勤務していた時期もある。

　経産省出身で０７年７月に就任した理事（５９）も、協会からの９００万円の年収のほか、技術会議からも年４００万円の顧問料を受け取っていた。

　協会は０４年には基本財産４億４０００万円を使い果たし、監査の度に赤字隠しの工作を続ける状態だったが、「協会は毎月数百万、時には１０００万円単位でぽんぽんと振り込んでくれた」と技術会議関係者は話す。だが、協会側は「出張費などがかさんだ」との釈明を繰り返すばかりで、役員報酬を含め、詳細な使途についてはいまだに正式に明らかにしていない。

　◆暗黙の条件◆

　協会の主力業務は、農漁村へのケーブルテレビや防災無線の普及事業。国の補助金を利用して敷設したい市町村を顧客に、コンサルタント業務などを行ってきた。農水省幹部は「ある時期まで、補助事業の採択を希望する場合、協会にコンサルを依頼するのが暗黙の条件だった」と明かす。

　きっかけは、１９９１年３月の構造改善局長（当時）名の通達だ。農業構造改善事業の計画策定を巡り、同協会などの名前を挙げ、「適当と認められる者には委託することができる」という一節が入っていた。

　農水省は「協会に計画策定を委託することも可能ということを示しただけ」と釈明するが、「市町村側にすれば『補助金が欲しければ協会を使え』と受け止めたようだ」と認める。

　こうした「ひも付きの補助事業」の実態が国会などで批判され、農水省が９７年４月にこの通達を廃止するまでに、多い年で２億円近い補助金が協会に“還流”していたという。

　◆甘い指導◆

　００年４月、農水省は協会などに対し、業務外注の際には入札を行うよう指導。ところが、協会はその後も、技術会議に随意契約で発注していたが、農水省は「技術会議のことは把握できなかった」と話す。

　農水省では毎年、協会に職員を派遣し、決算などを精査していた。農水省は「不正を見抜けなかったのは経理が操作されていたため」と釈明する。だが、０５年度決算では、４億６０００万円近い基本財産がありながら、その運用益がわずか「２２６４円」。「通常ならあり得ない不自然な数字」（構造改善課）でありながら、矛盾を見過ごしていた。

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Latvia's currency crisis is a rerun of Argentina's

By Nouriel Roubini

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

After a recent failed public debt auction, the authorities in Latvia are desperately trying to prevent a depreciation of the currency, the lat. The country's predicament is similar to the one that faced Argentina in 2000-01: a severe recession driven by global financial shocks, a sudden drying up of capital inflows and the need to reduce a large external deficit worsened by an unsustainable currency peg.

As in Argentina, the International Monetary Fund initially went along - somewhat uncomfortably - with the authorities' strong preference for not letting the currency depreciate, in spite of its significant overvaluation. But a real exchange rate depreciation is necessary to restore the country's competitiveness; in its absence, a painful adjustment of relative prices can occur only via deflation and a fall in nominal wages that will take too long and exacerbate the recession.

Draconian cuts in public spending will be required if Latvia is to improve the current account. But this is becoming politically unsustainable. And while fiscal consolidation is needed - as Argentina found in 2000-01 - it will make the recession more severe in the short run. So it is a self-defeating strategy as long as the currency remains overvalued.

Of course, as in Argentina, letting the currency depreciate would lead to massive negative balance-sheet effects. The large foreign liabilities of households, companies and banks are in foreign currency; the real value in local currency of such debts would increase sharply after a devaluation. Devaluation may therefore lead to default by many private sector agents - and as the country's banks are local subsidiaries of Swedish banks, a financial meltdown in Latvia could prove damaging for its neighbours.

Nonetheless, devaluation seems un-avoidable and the IMF programme - which ruled it out - is thus inherently flawed. The IMF or the European Union could increase financial support for Latvia but, as in Argentina, this would be throwing good money after bad. International resources are better used to mitigate the collateral damage of depreciation.

An introduction of the euro immediately after devaluation could help prevent the exchange rate from overshooting, although it would require the eurozone to admit a country that does not yet satisfy the formal criteria for membership. Euroisation after depreciation is a more credible strategy for Latvia than dollarisation would have been for Argentina, as Latvia was on its way to membership and its business cycle is highly correlated with that of the EU. Euroisation without depreciation will not work, as a real depreciation is necessary to restore competitiveness. Of course, any depreciation - with or without euroisation - will make many foreign currency debts unsustainable and will require a forced debt restructuring, as in the case of Argentina.

To minimise the risk of contagion, the best strategy may be: depreciate the currency, euroise after depreciation, restructure private foreign currency liabilities without a formal "default", and augment the IMF plan to limit the financial fallout. It is a risky strategy but - as in Buenos Aries nine years ago - when plan A does not work it is time to move to plan B sooner rather than later. Delaying plan B would only cause a bigger blowout when the unavoidable currency crisis eventually occurs. It is to be hoped the lessons of Argentina in 2001 have been learnt.

Latvia's authorities are trying desperately to prevent depreciation by intervening in the foreign exchange market. While the very thin interbank market slows down the rate at which domestic and foreign financial institutions can short the Latvian currency and put pressure on the central bank reserves, the country is bleeding forex reserves at an alarming rate. Only a miracle or some draconian and credible fiscal adjustment (that does not exacerbate the recession) could restore the peg's credibility and lead to a growth recovery.

At this point, a currency and financial crisis is pretty much unavoidable; the issue is how to minimise the domestic and international costs of the needed change in the policy regime. As the experience with Argentina suggests, procrastinating will make the unavoidable crash - and the regional contagion - even more -dramatic and costly.

The writer is a professor of economics at New York University's Stern School of Business and chairman of RGE Monitor

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Relief in Latvia spreads across the water

By Robert Anderson

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

As fears of an imminent Latvian devaluation receded yesterday, relief was felt across the Baltic sea in Sweden, biggest investor in this country of 2.3m people.

Latvia's deepest recession since the aftermath of communist rule has dominated trading in Swedish financial markets. The krona and shares in Swedish banks have been on a two-week rollercoaster, driven by the twists and turns of Latvia's struggle to keep its International Monetary Fund programme on track and fears that it might abandon its currency peg.

"Just speaking about devaluation creates nervousness in itself," says Louise Lundberg of Standard & Poor's, which has put Latvia's rating on credit watch.

Twists in Swedish sentiment have put the lat under pressure, though to a much lesser extent than the krona because the market is illiquid and tightly policed by the central bank. "The Swedish financial market has become a proxy speculation for Latvia," says Kristaps Strazds, head of trading at SEB in Riga.

Nervousness over the lat was sparked last month when Sweden's central bank announced that it would bolster its foreign exchange reserves by borrowing Skr100bn ($13bn, €9bn, £8bn). That sparked worries in the markets as it was widely seen as designed to give the central bank more firepower to help Swedish banks if Latvia devalued.

This assessment appeared to be confirmed by comments from a former central bank chief - and current adviser to Latvia - that it was only a matter of time before Riga devalued.

Yesterday, the central bank gave renewed life to these rumours by borrowing €3bn ($4.2bn, £2.6bn) from the European Central Bank under a little-known swap agreement. The move appeared designed to speed up the strengthening of reserves as concern over Latvia rose.

The announcement had an immediate effect on the krona. It weakened in early trading, though it recovered its momentum later after Brussels signalled that the European Union would stand behind Latvia.

Market worries have not only focused on the risk of devaluation in Latvia, but also the knock-on effect for neighbouring Lithuania and Estonia, the damage that would do to Swedish banks, and whether the Swedish government would have to step in to provide support.

Swedish banks are particularly exposed to the risk of a devaluation because much of their lending in the Baltic states has been in foreign currencies.

Devaluations would increase the debt burden of mortgage holders and companies, triggering more defaults, deepening the recession and putting pressure on the untested insolvency system.

Even though the risk of a Latvian devaluation is receding, the recession in the Baltic will increase loan losses. "Just because Latvia doesn't devalue doesn't mean Sweden won't end up footing the bill," says Gunnar Tersman, Baltic analyst at Handelsbanken in Stockholm. "The timing is just different: if you devalue it's right in your face; if you don't, it creeps up on you all the same."

Swedbank and SEB, the most exposed lenders, have turned to their shareholders to strengthen their capital in recent months, but Swedbank may need an injection of state equity in the event of a devaluation, say -analysts, because other sources of funding might be cut off.

The Swedish Financial Supervisory Authority said the four big Swedish banks could absorb more than Skr150bn in losses over three years in the Baltic states without falling below required capital levels. "However, in extreme -scenarios the market will most likely require a higher level of capital," it said -yesterday.

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米国債など「13兆円」不正持ち出し、邦人？２人を拘束　伊警察

　【ジュネーブ＝藤田剛】イタリアの報道によると、同国警察は総額1340億ドル（約13兆円）の米国債などの有価証券を不正に持ち出そうとした日本人とみられる２人をスイスとの国境で拘束した。２重底になっているカバンに大量の有価証券を隠し持っていることが発覚し、押収された。

　日本政府も拘束の事実は確認しているが、日本人との情報が本当かどうかは不明としている。氏名や持ち出しの理由なども分かっていない。

　イタリア警察は有価証券の金額があまりにも巨額なため、偽造の可能性を含めて捜査を進めているもよう。有価証券が本物の場合、総額の約40％の罰金が科せられる可能性があるという。(14:18)

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Iraqi teen tackles maths puzzle, but not the first: university

May 28, 2009

STOCKHOLM (AFP) — A 16-year-old Iraqi immigrant, who figured out a solution to a complex maths puzzle, was not the first person to come up with a successful formula, Sweden's Uppsala University said in a statement Thursday.

Swedish media, including the website of the Dagens Nyheter daily, reported Thursday that Mohamed Altoumaimi had found a formula to explain and simplify the so-called Bernoulli numbers, a sequence of calculations named after the 17th century Swiss mathematician Jacob Bernoulli.

The Falu Kuriren newspaper, which ran the original story, said Altoumaimi was the first person to crack the puzzle and had enlisted the help of a senior lecturer at Uppsala University to check his formula.

But a statement published on the university's website said the reports were inaccurate.

"Senior lecturer Jan-Aake Lindhal verified the formula, but added that although correct, it was well known and readily available in several databases," the statement said.

The Falu Kuriren also reported Altoumaimi had been offered a place at Uppsala once he finishes high school, but the institution denied this was the case.

"The student... has not been admitted to Uppsala University," the statement said.

Altoumaimi, who came to Sweden six years ago, is currently at high school in Falun, central Sweden and plans to take summer classes in advanced mathematics and physics this year.

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Guantánamo panel urges US to take Chinese Uighurs

By Demetri Sevastopulo in Washington

Published: May 20 2009 00:28 | Last updated: May 20 2009 00:28

The task force on Guantánamo Bay detainees set up by Barack Obama has recommended the administration go ahead and release into the US two Chinese Uighurs held at the prison, the Financial Times has learned.

The White House’s hesitation on its original decision to release the two comes as Republicans increase their attacks on Mr Obama’s plans to close Guantánamo, which would involve transferring a total of some 240 detainees to the US.

Republicans won a political victory on Tuesday after Democrats withdrew $80m (£53m) in funding for the closure of the camp until the administration had come up with an adequate plan to transferring detainees. The plight of the Uighurs illustrates the difficulty Mr Obama faces in trying to carry through his promise to close the prison.

Two government officials told the FT that the task force had advocated releasing two of the 17 Uighurs – Muslims from Xinjiang province – held at Guantánamo as part of the effort to fulfil the president’s pledge to close the US detention facility on Cuba within a year.

The White House was now wavering from its original intention to implement the recommendation under pressure from Congress. One official said the administration had originally overruled the homeland security department and Federal Bureau of Investigation, who had “screamed bloody murder.”

Dean Boyd, a justice department spokesman, said: “We have no announcements on whether any final decision has been made with respect to the disposition of the Uighurs or other detainees at Guantánamo, or on the claim of interagency disagreements.”

Lindsey Graham, a South Carolina Republican senator, and Joseph Lieberman, an independent senator from Connecticut, also introduced legislation that would block the release of the Uighurs into the US.

“Former enemy combatants should not be released into the general population of the US,” said Mr Graham. “Any decision to do this will put Americans at unnecessary risk.”

Mr Graham told the FT there was “huge” support for the legislation. Asked whether any lawmakers were arguing on behalf of releasing the Uighurs in the US, he said: “The Uighur caucus is pretty small.”

Some Democrats have also questioned whether the US should take the Uighurs, who were captured in Pakistan after fleeing Afghanistan in the wake of the 2001 invasion.

The Pentagon, which no longer deems the Uighurs as “enemy combatants”, has cleared most of them for release. The US has refused to return them to China – where they are considered part of a terrorist separatist movement – out of concern that they might be tortured or killed.

The administration of George W. Bush spent several years trying to persuade other countries to take the Uighurs, but only succeeded in getting Albania to take five of the 22 detainees. Many critics have argued that the US would have more success obtaining help from other countries by taking some Uighurs itself. Germany and Sweden, which have large Uighur communities, have previously refused to accept any of them.

Tom Malinowski, Washington advocacy director at Human Rights Watch, said the administration understood that the US needed to take some of the detainees in order to encourage Europe to help, but that the congressional rhetoric would complicate those efforts.

“You can’t argue these people are too dangerous to be released in the United States and then ask Germany to take them, that doesn’t work.”

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ECB offers Sweden €3bn loan

By Ralph Atkins in Frankfurt, Joshua Chaffin in Brussels,and Robert Anderson in Stockholm

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

The European Central Bank has acted to head off a financial crisis in the Baltics, providing Sweden's central bank with a €3bn loan in a confidenceboosting move amid growing fears over Latvia's economy.

The ECB move signalled the central bank's willingness to shore up official European help for countries such as Latvia, whose prime minister, Valdis Dombrovskis, voiced optimism that the country would soon receive another tranche of multinational aid.

The ECB's loan to the Riksbank - a rare example of aid for a country outside the eurozone - will be used to augment the Swedish central bank's foreign reserves, increasing its capacity to help Sweden's private sector banks, which dominate the Baltic region's financial sector.

Since the global financial crisis erupted, the ECB has been wary about extending help beyond the borders of the eurozone. Yesterday's move suggested it was prepared to do that.

Jean-Claude Trichet, ECB president, has been careful not to rule out stepping up help to the Baltic region, although such a move could prove controversial within the bank.

The €3bn ($4.2bn, £2.6bn) being lent to the Riksbank is part of a previously undisclosed "swap" agreement, which was struck in December 2007 and allows the Swedish central bank to borrow up to €10bn in exchange for Swedish kronor for up to three months.

Last week Mr Trichet revealed it had an agreement allowing the Latvian central bank to obtain liquidity from the ECB, but only against euro-denominated collateral.

The ECB will worry about the financial risks and potential costs involved in stepping up to help the Baltic countries, as well as the dangers of setting a precedent that might prove awkward in a future crisis in eastern Europe or elsewhere.

The Latvian lat has stabilised this week, boosting sentiment towards other eastern European currencies, after Riga said it had found another 500m lats (€711m, $993m, £610m) in budget savings.

This has raised hopes that the International Monetary Fund will soon approve the next €1.4bn tranche of aid under Latvia's stabilisation plan.

"This gives us certainty about the next tranche," said Kristins Strazds, head of trading at SEB bank in Riga. "This should end the devaluation rumours in the short term."

However, Joaquín Almunia, European economic affairs commissioner, stressed in Brussels the need for Latvia to sustain its budget cuts over the long term.

"We are convinced that there are no other alternatives - that all other possible alternatives are more painful or worse for the Latvian citizens, for the Latvian economy and also for the EU economy," Mr Almunia said, noting the importance of keep the lat's peg to the euro, given the country's high level of foreign debt.

Mr Almunia was speaking after a meeting with Mr Dombrovskis, who was confident that Latvia's parliament would next week approve the emergency budget cuts.

Earlier, Mr Dombrovskis told the Financial Times that the situation was beginning to stabilise.

"It's important . . . that people know that we will continue to receive this international loan package," he said.

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ADIC launches four funds

By Andrew England in Abu Dhabi

Published: June 9 2009 15:02 | Last updated: June 9 2009 15:02

The Abu Dhabi Investment Company, one of the oil-rich emirate’s oldest state investment vehicles, said on Tuesday that it was launching four equity funds focused on the region that would be open to international institutional investors.

The launch of the funds is part of a two-year restructuring exercise at the company, which has been rebranded “Invest AD” and has historically acted as an investment arm of the government. But it is now aiming to attract foreign investment to the region by offering a range of financial services to international institutional investors.

“The region is seen as a source of capital ... from our perspective we also think the region should be seen as a destination of capital,” said Nazem al-Kudsi, the company’s chief executive. “We know the region very well, we have the expertise and we feel strongly about corporate governance and we have access.”

Two of the four open-ended funds – a United Arab Emirates fund and an Emerging Africa fund – have already been launched with seed money. The other two – a Gulf Cooperation Council equities fund and a Middle East and North Africa fund - are expected to be launched in the next few weeks.

The region’s bourses have followed a similar trajectory to global markets, suffering heavy losses last year before picking up in recent months.

ADIC is one of a growing number of state investment vehicles acting on behalf of Abu Dhabi, which is the capital of the United Arab Emirates. Set up in 1977 it does not declare the size of its assets under management, but bankers estimate it invests about $10bn.

Although its primary focus is on the Middle East and North Africa, Mr Kudsi said the company would consider opportunities outside the region. Last week, the company announced that it had entered into an agreement to acquire a stake in Gornaya Karusel resort being built for the 2014 Winter Olympics in Sochi, Russia. It has not disclosed details about the size or value of the stake.

The company also has a joint venture with UBS to raise $600m for an infrastructure fund. Last month it said it had commitments of up to $250m with its first close.

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Saad sees its lines of credit shut off

By Andrew England in Abu Dhabi, Simeon Kerr in Dubai, and,Neil Hume and Patrick Jenkins in London

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

Western banks have begun to close down credit lines to Maan Abdul Sahed AlSanea and his investment entity, Saad Group.

People familiar with Mr Sanea's investment business said that some of the several dozen international banks that had lending relationships with the Kuwaiti-born former fighter pilot had started liquidating shareholdings.

The moves came after news of an edict from the United Arab Emirates central bank, restricting lenders' business with Saad or related companies, including Ahmad Hamad Algosaibi & Brothers. One banker who had seen the memo said the central bank had instructed local banks not to grant new facilities to the Saudi groups until further notice.

Apparently taking their cue from that directive, Citigroup yesterday placed 30m shares, or a 4 per cent stake, in 3i Infrastructure, owned by Mr Sanea at 85p, according to traders. The previous day, the bank placed 16.1m shares in Berkeley at 701p, the homebuilder. Credit Suisse placed another 4.4m Berkeley shares at 715p, according to Bloomberg. This week, Saad Group sold half its stake in Berkeley.

Saad's only comment was: "We are continuing to make progress with the restructuring plan announced last week and will update you further in due course."

It has emerged that the Saudi central bank had frozen the personal accounts of Mr Sanea, who is also a major shareholder in HSBC. The action was taken shortly after the International Bank Corporation (TIBC), a wholly-owned entity of Ahmad Hamad Algosaibi & Brothers, had defaulted.

Saad Group has since appointed Lawrence Graham LLP and BDO Corporate Finance as advisers as it seeks to restructure its debt.

Algosaibi has not made public comments, but it is understood that TIBC defaulted because its parent was carrying out a group-wide debt restructuring.

In a second circular, the United Arab Emirates' central bank has told banks they may offset any credit facilities with two troubled Saudi groups against deposits held by the companies, bankers said yesterday.

The action relates to Saad Trading & Contracting Co. and its owner, Maan al Sanea, as well as Algosaibi Trading Services and Ahmad Hamad Algosaibi & Brothers, two bankers who have seen the circulars said.

A circular said that banks could offset their exposure against available assets held by the groups, subject to legal requirements, according to one of the bankers who has seen the document.

The rare move is a sign of concerns about the potential ramifications for the region's financial sector.

Another senior banker said the UAE's central bank planned to meet with bankers today to gauge the extent of the exposure of banks based in the Gulf's main business hub have to the groups.

The Algosaibi group was one of the Gulf's most respected family companies and able to borrow almost on reputation alone. Saad Group, which had been rated by both Moody's and Standard & Poor's, has interest across the region and internationally, with a high exposure to property and the financial sector. It had assets of $30.6bn by the end of 2008.

"The Saad Group understands that the Central Bank of the UAE has reminded its banks of their obligations to abide by the terms of their documented rights and liabilities with regard to the Saad Group," Saad Group said in a statement e-mailed to the Financial Times. "The group appreciates such reminders as they assist the process of responsible banking, which is a characteristic of the UAE."

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Brazil readies oil reserves law

By Jonathan Wheatley in São Paulo

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

The Brazilian government is preparing legislation that will set new regulations for the country's enormous off-shore “pre-salt” oil reserves, discovered in 2007.

International oil companies have been anxiously awaiting the regulations as they cover some of the world's few big unexploited oil reserves, which industry leaders say will be as significant as the North Sea discoveries of the 1970s.

But the proposed legislation has caused alarm among many in the industry, who fear it may be open to political interference and give unfair advantage to Petrobras, Brazil’s government-controlled but publicly traded oil company.

In a recent interview with the Financial Times, Edson Lobão, mines and energy minister, said international oil companies should “prepare their treasury reserves” as the government would introduce regulations in time to auction new concessions in the pre-salt fields next year.

The statement surprised many in the industry, who had expected the process to take longer.

The ministry confirmed on Wednesday local press reports, saying three bills were being prepared to go before Congress. They would create a new, 100 per cent state-controlled oil company to take ownership of the fields and award concessions; production sharing agreements in the fields, in which oil companies would give part of the oil they produced to the government, replacing the existing concession system in which companies take ownership of whatever oil they discover; and a fund to channel proceeds from the fields to social spending.

Several concessions in the fields were sold before their potential became clear. Almost all are controlled by Petrobras, in partnership with foreign companies.

Those concessions will not be affected by the new rules and are likely to keep Petrobras and its partners busy for several years.

But because about 60 per cent of Petrobras’s capital is held by private investors, the government has been keen to create a new company to secure ownership of the remaining pre-salt fields for the Brazilian state. Government officials estimate that pre-salt concessions already granted could contain more than 50bn barrels of oil; the remaining area is likely to be much larger.

The proposed new structure is based on that in Norway, where Petoro, entirely controlled by the state, oversees the industry in which StatoilHydro, controlled by the state but with private investors, plays a dominant role.

Brazil’s ministry said the new regulations would follow the Norwegian model, including measures that allow the new state company to grant concessions without putting them out to tender – a move widely seen as protecting Petrobras from being squeezed out by wealthier foreign competitors.

“This is worrying,” said Eric Smith of the Tulane Energy Institute in New Orleans. “There is likely to be a lot less transparency in Brazil than there is in Norway. This could allow for political interference and favours.”

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Peru to suspend land laws after violence

By Naomi Mapstone in Lima

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

Peru’s Congress is moving to suspend the passage of laws at the heart of a lands right dispute with Amazonian indigenous tribes that sparked the worst violence the country has seen since the Maoist Shining Path insurgency.

The official death toll of 30 protesters and 24 police officers is contested by indigenous leaders, who accuse the armed forces of hiding bodies. The government denies the charge.

Mercedes Aroaz, trade and tourism minister, said a 90-day suspension of decree 1090, which would give the government the power to sell deforested land to private entities, would improve the chances of negotiating a solution. “If a suspension is temporary and gives the opportunity for dialogue and establishing consultation mechanisms, then we agree,” she said.

But the suspension falls well short of the protesters’ demands to repeal the legislation. They say decrees, being passed in part to comply with a trade agreement with the US, weaken their rights to land they have inhabited for hundreds of years. They fear decree 1090 would create a loophole whereby illegal deforestation would pave the way for the sale of land to oil, gas or mining interests, and decree 1064 would end the need for companies to consult indigenous communities before starting work.

An army curfew in the northern Amazonian town of Bagua has restored order, after the clash between more than 600 police officers and 2,000 protesters blocking a central highway escalated into riots, looting and the kidnapping of 38 police, nine of whom died.

Tensions remain high, however, with a national strike on Thursday and calls by indigenous leaders for the resignation of Yehude Simon, prime minister, and Mercedes Cabanillas, interior minister. Carmen Vildoso, minister for women and social development, resigned her cabinet post in protest at the government's handling of the violence.

Alan Garcia, the president, called the protesters “ignorant”, suggesting they were being manipulated by leftist forces outside Peru, interpreted to mean Hugo Chávez, of Venezuela, or Evo Morales, of Bolivia. After Alberto Pizango, an indigenous leader whom the government charged with sedition, was granted asylum in Lima's Nicaraguan embassy, Daniel Ortega, Nicaragua's leftist president, was added to the list.

Indian Students Targeted in Melbourne Attacks (Update1)

2009-06-10T07:23:00.001-07:00

Indian Students Targeted in Melbourne Attacks (Update1)
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By Madelene Pearson and Rebecca Keenan

June 9 (Bloomberg) -- Jaya Sankar, 22, an Indian student studying in Melbourne, watched as his friend was stabbed in the head with a screwdriver, putting him in a coma. Now, Sankar’s parents want him to quit his studies and return home.

“They don’t want me to stay in Australia anymore because it’s too dangerous here for Indians,” he said outside the hospital of his friend Sravan Kumar, 24. While Sankar kept a bedside vigil, thieves ransacked his accommodation, he said.

Violent crime against Indian students, including attacks with machetes, knives, and knuckle dusters, has risen by a third in the past year in the state of Victoria. While Australia has fought racism since ending its White Australia immigration policy in 1973, the attacks have hurt the country’s reputation abroad and threaten to cut the A$15.5 billion ($12.4 billion) earnings from teaching overseas students, the third-largest source of foreign income.

“It’s not just Indians, but there does seem to be a particular problem besetting the Indian students,” said Chris Nyland, professor at the School of Business and Economics at Monash University outside Melbourne. “If we do get the reputation for being unsafe, students may not come here.”

The rise in attacks has been fuelled by a jump in the number of Indian students coming to Melbourne, police said. There were 81,520 Indians enrolled in full-fee education in Australia in April, up 38 percent from 58,917 a year earlier, and a sevenfold gain from the 11,364 students in 2002, according to data from the Department of Education, Employment and Workplace Relations. Almost half of those study in Victoria state, of which Melbourne is the capital.

Cricket Fans

India supplies 19 percent of all foreign students in Australia, second only to China.

In March, the government announced a A$3.5 million program “Study in Australia 2010,” to attract more overseas students and help its education industry beat the economic slump.

Indian students favor Melbourne because of sporting attractions like the Melbourne Cricket Ground, said Gautam Gupta, secretary of the Federation of Indian Students in Australia.

Assaults and robberies against Indians in Melbourne increased by a third in the year ended June 2008, to 1,447, Victoria police said. They don’t provide updated data of assaults by nationality.

“A lot of them carry items that are attractive to people that perhaps want to prey on them -- things like mobile phones, laptops, iPods,” Police Commander Trevor Carter said by phone from Footscray police station, in Melbourne’s west.

Sydney Violence

The violence is now threatening to spill over into neighboring New South Wales, Australia’s most populous state. Hundreds of men of Indian background rallied overnight in Sydney to protest a spate of attacks against students and migrants, the Sydney Morning Herald said today. The demonstration was sparked by reports that an Indian man in his 20s was attacked by a group of men of Middle Eastern appearance earlier in the night, the Herald said.

Simon Overland, chief commissioner of police in Victoria, said on June 1 that some of the attacks and robberies may be racially motivated while others are “opportunistic.”

A poll on the Indian students’ federation Web site shows 83 percent of respondents believe there has been an increase in racism in Australia. In one court case, accused youths described the attacks as “curry bashing,” Gupta said.

Reactions

“If they are using words like ‘curry bashing’ and ‘Indian hunting’ I fail to see how it is not racism,” he said. Gupta said he’s scared to use public transportation after 8 p.m.

Sujatha Singh, India’s High Commissioner to Australia, met with students in Melbourne after headlines such as “Horror Down Under” and “Hate Crimes?” ran in Indian newspapers.

“Australia will not tolerate discrimination against, or victimization of, any of our international students,” said Julia Gillard, deputy prime minister and minister for education, in a speech on May 26. Gillard represents the Melbourne suburbs where the assaults occurred.

A rally on May 31 organized by the Indian students’ federation that blocked Melbourne’s busiest intersection drew 6,000 people, the group said. Last year, 300 taxis blockaded the same street in protest after a 23-year-old Indian student was stabbed while driving a cab.

“Whenever something does have an apparent ethnic or racial element, it just does attract more attention,” said Nick Haslam, professor of psychology at the University of Melbourne. “It does lead to that soul searching about what are we like as a country.”

More than one in five of Australia’s 21.8 million population was born overseas. India was the third-biggest source of migrants in 2006, according to government statistics.

Phone Hotline

Carter says the issue is one of the “highest priorities” for Victoria police, who set up a phone hotline for students, established a community committee and sent an officer to New Delhi and Chennai in India to speak to families of students planning to study in Australia.

Foreign students pay as much as A$60,000 a year for a medical degree, according to the University of Melbourne. It costs around A$20,000 a year for a student to live in Australia, the Indian students’ federation says.

Kumar, from India’s Andhra Pradesh state, awoke from his coma last week after the attack on May 23, Sankar said.

“He’s out of the coma, but he’s not remembering anything,” Sankar said yesterday by telephone. “There isn’t much improvement.”

Sankar said he won’t leave Melbourne until he finishes his masters degree in information systems. “I am not going to leave this place,” he said. “I will fight for my rights.”

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強盗・ひったくり14％増　09年1～5月、警察庁まとめ

　今年１～５月に全国で発生したひったくり事件は8631件で、前年同期より14.2％増えたことが10日、警察庁の犯罪統計で分かった。強盗も14.0％増。ひったくりは東京が1.5倍になるなど首都圏の増加が目立ち、強盗は愛知で６割増えた。

　同庁によると、今年１～５月に都道府県警が認知した犯罪は刑法犯全体で68万３千件余りで前年同期比5.4％減。ひったくりや強盗、乗り物盗などが増える半面、殺人や詐欺などは減った。

　ひったくりで増加が目立つのは55.7％増の東京（1149件）、78.2％増の神奈川（1169件）など。発生が1479件と全国で最多だった大阪は逆に1.0％減だった。

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日本農村情報システム協会不正支出：自己破産申請を決定

　農林水産、経済産業、総務の３省が所管する社団法人「日本農村情報システム協会」（東京都豊島区）は９日開いた総会で裁判所に自己破産申請する方針を決めた。同協会は６億円余りを不正に支出していたとして、３省から民法に基づく業務改善命令を受けているが、不正の解明がうやむやになる恐れが出てきた。負債総額は約１０億円超に上る見通し。

　３省などによると、同協会は市町村から防災無線の設計などを請け負い、大半を協会副会長が理事長を兼務していた任意団体「情報システム技術会議」に委託した。同会議は０３年ごろから、市町村との契約額を上回る費用を請求。協会は求められるまま約４億円の基本財産を取り崩すなどして支出を繰り返した。０９年３月末までに６億５６００万円の債務超過に陥り、先月２９日に不正支出が表面化すると資金繰りのめどが立たなくなった。

　同協会は現在も、約６０市町村から防災無線や気象情報配信などの業務を委託されている。今後委託をどうするか検討していくという。

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農村情報システム協会、自己破産へ　副会長らの責任追及

2009年6月10日3時56分

　社団法人・日本農村情報システム協会が任意団体との不透明な取引などで債務超過に陥っている問題で、同協会は９日、自己破産の手続きをとることを決めた。負債総額は約１４億円に上るという。協会側は記者会見で、任意団体の理事長を３月まで務めていた協会副会長（７９）らの経営責任を追及する考えを示した。

　同日の理事会で、協会が今年３月末時点で６億５千万円余の債務超過に陥り、０１年度から取り崩した約４億４千万円の基本財産の回復が必要なのに資金繰りに行き詰まっていることなどから、自己破産することを決めた。

　協会常務理事らによると、今後１、２週間で債権と債務を整理し、裁判所に自己破産を申し立てる。その後、破産管財人が協会の実態を調べ、経営陣に背任などの事実が確認できれば、刑事責任を追及するという。常務理事は「基本財産の取り崩しや、利益相反関係にある任意団体に過払いするなど、副会長の責任は大きい」と話した。

　協会は、副会長が７９年に立ち上げた任意団体「情報システム技術会議」に、０３～０８年度に業務委託費を６億４６００万円水増しして支払っていた。協会は副会長に全額を返すよう求めており、応じなければ損害賠償を求める訴訟を起こす方針。

　農水省は今月１日現在で４２１の公益法人を所管している。石破農水相はこの日の記者会見で、公益法人のあり方について「チェック態勢を見直さないといけないし、（業務が）重複するものは統合すべきだ」と述べた。

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不正支出６億円が回収不能、農村システム自己破産へ

　農林水産省などが所管する社団法人「日本農村情報システム協会」（東京都豊島区、大池裕会長）を巡る不正支出問題で、同協会は９日、都内のホテルで定例の総会を開き、東京地裁に自己破産を申し立てることを決めた。

　協会の負債総額が１０億円を超え、不正に支出した６億４６００万円の回収のめどがたたないことが理由。

　総会後に記者会見した重松宣志常務理事によると、負債から現預金などの資産を差し引いた債務超過額は６億５６００万円に上り、銀行からも借入金の返済を求められて資金繰りに行き詰まったという。

　農水省の調査では、協会は、協会副会長（７９）が理事長だった「情報システム技術会議」に昨年度までの６年間で６億４６００万円もの不正支出をしており、これについて、重松常務理事は「回収の見込みがない」と述べ、自力での再建を断念した理由に挙げた。

　重松常務理事は「副会長に責任がある」として、不正支出分６億４６００万円を返還請求したことや、２００５年度に常勤から非常勤になった際に支払った退職金５６００万円の返還も求めることも明らかにした。

　協会は１０日付で役職員約３０人全員を解雇したうえで、今月中に自己破産を申し立てる。約１７０市町村で行っている防災無線やケーブルテレビのコンサルタント事業については、重松常務理事は「個別に対応する」と述べるにとどめた。

　同協会を巡っては、不正支出のほかにも、気象情報の提供事業で、約１億円が使途不明になったことが明らかになっている。

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アルツハイマー病：早期診断に役立つ脳内物質を発見

　アルツハイマー病の早期診断に役立つ脳内物質を、大阪大大学院医学系研究科精神医学教室（武田雅俊教授）の大河内正康講師らのグループが発見した。欧州分子生物学機構の専門誌「モレキュラー・メディシン」の電子版に１０日、発表する。

　脳の細胞膜では、βＡＰＰというたんぱく質が分解酵素で切断され、アミロイドβ（Ａβ）という物質が作られる。Ａβのうち４２個のアミノ酸を持つＡβ４２が蓄積すると、神経細胞を死滅させ、アルツハイマー病を発症する。アルツハイマー病は発見時には症状が進行している場合が多い。Ａβ４２は発症前から蓄積していると考えられるため、Ａβ４２の量を測定できれば、早期診断に役立つが、測定方法は見つかっていない。

　大河内講師らは、脳脊髄（せきずい）液で、Ａβの場合と同じ酵素の働きでできるＡＰＬ１βという物質を発見した。アルツハイマー病の患者４３人の脳脊髄液を調べると、ＡＰＬ１βのうち２８個のアミノ酸を持つＡＰＬ１β２８の割合が、アルツハイマー病でない認知症患者より高くなっていることが分かった。また、これとは別に、採取時は症状がなく、後にアルツハイマー病と診断された患者９人を発症しなかった３４人と比べると、ＡＰＬ１β２８の割合が増加していた。

　大河内講師は「Ａβ４２の代わりにＡＰＬ１β２８の量を測定すれば、アルツハイマー病を発症前に診断できる。今後は症状が出るどれくらい前から増加しているのか調べたい」と話している。

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早大キャンパスで覚せい剤密売、暴力団幹部ら２５人逮捕

　早稲田大学のキャンパスで覚せい剤を売買したなどとして、警視庁は、東京都新宿区新宿、指定暴力団住吉会系幹部辻建治被告（４４）ら密売人や顧客計２５人を、覚せい剤取締法違反や大麻取締法違反などの容疑で逮捕したと、１０日発表した。逮捕は昨年５月～今月９日。

　同庁幹部によると、辻被告は昨年５月、無職男（３９）に販売目的で、岡山県内の女性宅に覚せい剤０・９グラム（３万円相当）を宅配便で送ろうとした疑い。「一切話さない」と黙秘している。

　辻被告らは、新宿区のマンションを拠点に、複数の密売人に覚せい剤や大麻を供給。このうち、すでに麻薬特例法違反罪で懲役７年の実刑判決が確定した同区在住の男（４５）が、０７年５月以降、インターネット上にサイトを開設し、同区の早稲田大学のキャンパス内などで、９都道府県の客に５９回の密売を行っていたという。

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「刑事の声怖かった」　菅家さんインタビュー

2009年6月10日 10時45分

　足利事件の再審請求で、１７年半ぶりに釈放された菅家利和さん（６２）が９日、本紙のインタビューに応じ、栃木県警の取り調べに対し、虚偽の「自白」をした経緯を振り返った。髪の毛を引っ張るなど暴力的な調べから自白に追い込まれたが、「やりました」と言った以上、説明しなければならないと考え、架空のストーリーを供述したという。

　【栃木県警は事件から１年以上、菅家さんを尾行。ＤＮＡ型鑑定した体液の型が一致したとして９１年１２月、逮捕した】

　朝７時ごろ起きると、玄関をどんどんたたく音がする。「警察だ。菅家いるか！」って。ドアを開けたとたん、６人のうち３人がなだれ込んできた。「おまえ、子ども殺したな」と言われ、「殺してなんていませんよ」と否定すると、座った姿勢でひじ鉄を食らわされ、後ろにどーんと倒れた。むかつきましたよ、いきなり何をするんだって。

　【その日は日曜で、結婚式に出る予定だった】

　「そんなもん、どうでもいい」と怒鳴られた。警察署に連れて行かれて「子どもを殺しただろう」「やっていない」と押し問答を繰り返した。昼をはさんで午後も同じ繰り返し。夕飯後、また繰り返す。どうしても聞き入れてくれない。頭の毛を引っ張られ、け飛ばされた。それぞれ１回。

　【夜中になり、菅家さんは「やりました」と“自白”する。刑事のひざが涙でぐっしょり濡（ぬ）れた】

　とにかく怒鳴られて怖かった。イライラして、もうどうでもいいやという気持ちになった。早く楽になりたかった。刑務所とか死刑とか、家族のことも全然頭に上らなかった。なぜそんな心境になったか分からないけど、刑事の手を握り締めた。涙が止まらなかったのは悔しかったから。認めたら、刑事の態度が穏やかになってほっとした。

　【犯人にしか分からない犯行の詳細や遺体の遺棄場所などをどうやって供述したのか】

　現場検証のとき、遺体を捨てた場所が分からない。「ここです」とでたらめを言うと、警察は「違う、もう少し先だ」と言う。「そうかもしれない」と話を合わせた。合掌して、心の中で殺された女の子に「おじさんはやってないよ」と念じた。

　やりましたと言った以上、どう説明しようかと考え続けた。一生懸命想像して話を作った。ムラムラとして恥ずかしいことを夢想した後、女の子の首を絞めたことにした。女の子が裸だったことも、警察で「これが別に捨ててあった衣類だ」と見せられて初めて知った。それも、後から付け加えて供述した。

　【別の女児殺害事件２件（栃木県警が再逮捕後にいずれも不起訴）についても“自白”した。このうち、１件は被害者の遺体がリュックに入れられていた】

　警察から聞いて、リュックをごみ箱から拾った話を作った。そうしないと、取り調べに答えられない。１日中調べられるから苦しくて、何でもいいから早く終わらせたくて。自分の性格は、小さいときからおとなしくて、反論ができない。人さまに「そうだろう」と言われると「はい、そうです」と言ってしまう。

　【菅家さんは裁判が始まってから、犯行を否認したり、また認めたりすることを繰り返した。これも不自然だとされた】

　やっていないと言いたかったけど、刑事が傍聴していると思うと怖くて。（第６回公判で）否認したのは、その日は傍聴席に刑事がいない気がしたから。でも、その後また「どうせ聞いてもらえない」とあきらめて、認めてしまったりした。論告求刑で検察官が「極刑にしてほしい」という女の子の両親の言葉を読んだ。初めて死刑になる可能性に気付いて、「とんでもない」と思った。

　【求刑公判の後、見知らぬ人から手紙が来た】

　その人は支援者で、１カ月後に面会に来た。私のことを「信じる」と言ってくれたんですよ。家族も言わなかったのに…。それで強くなれた。やっていないと言おう、と思えた。

　【刑務所生活は過酷を極めた。それでも菅家さんは弁護士に「不自由はない」と話していた】

　６人部屋に入ったら、同じ房に悪いやつがいて「１週間で全部覚えろ」と言う。布団のたたみ方やトイレ掃除、食器の洗い方…。うまくできず、殴られて肋骨（ろっこつ）が折れた。水を張った洗面器に顔を漬けられ、殺されると思った。急所をけられ、他人の小便や大便を食えとも言われた。医務室の先生に「やられたか」と聞かれたけど、最初は「何もされてません」と答えた。弁護士の先生には言わなかった。言ったら、殺されてしまうと思ったから。

　【獄中の１７年半を経て、これからやりたいこと】

　私が捕まったショックで父親は死んでしまったし、母親も２年前に亡くなってしまった。逮捕されるまで、交通違反も含め、一度も警察の世話になったことはない。警察は市民の味方だとずっと思っていた。

　今までの人生は返ってこないけど、これからは冤罪で困っている人たちを支援したい。自分も支援してくれる人たちがいたから、ここまでやってこられた。取り調べの録音・録画があれば、今回のようなことは起きなかったと思う。ＤＮＡ型鑑定も、逮捕の時だけ使うのではなく、冤罪だと主張する人に再鑑定する制度を法律でつくってほしい。

　　　◇◇◇

　菅家さんは現在、住まいが決まっておらず、一時的に足利事件弁護団の主任弁護人、佐藤博史弁護士の自宅に滞在している。最近はレンタルビデオ店に行き、大好きな寅（とら）さんが出ている「男はつらいよ」と、時代劇「必殺仕事人」を借りた。佐藤弁護士と本屋に行った時は、レジで店員から「菅家さんですね、おめでとうございます！」と握手を求められたという。

　今回の再鑑定で否定されたＤＮＡ型鑑定が証拠になっていることを菅家さんが知ったのは、裁判が始まってから。「取り調べで、ＤＮＡ型鑑定の決定的証拠を突きつけられて観念した」というもっともらしい話も、菅家さんの認識とは異なる。

　菅家さんは釈放後に出演したテレビ番組で、司会者に「こうして女の子の首を絞めて…」と虚偽の自白内容を説明した。佐藤弁護士は「実際は自白をさせられた場面を再現しただけだが、スタジオには『やはり真犯人か』と緊張感が漂った。弁護士も誤解しそうになるほど“完ぺきな自白”をしてしまう。だけど、ちゃんと話を聞けば誤解だと分かるんです」と話す。

　佐藤弁護士は言う。「冤罪の結果、女の子たちを殺した真犯人が逃げている。このおそろしい事実をどう考えるか」

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NATO launches another provocation against Russia
09.06.2009 Source: Pravda.Ru URL: http://english.pravda.ru/world/europe/107742-nato_russia-0

In addition to the maneuvers in Georgia, NATO launched another event near Russia’s borders. This time the drills take place in the north, in Scandinavian countries and in the Baltic States. Over 2,000 servicemen from ten countries of the alliance (Britain, Germany, Denmark, Latvia, Lithuania, the Netherlands, Poland, the USA, France and Estonia) participate in ten-day Baltops-2009 drills which are held within the scope of NATO’s Partnership for Peace Program.

Finland and Sweden, which do not hold NATO’s membership, provided their territories, army bases and troops for the drills. First priority is given to aviation, including carrier aviation: Britain’s Illustrious aircraft carrier arrived in the Baltic Sea to participate in the event. Fifty multi-mission fighters, bomber aircraft and cargo planes will be involved in the largest military drills that have ever been held on the territories of Finland and Sweden, the two neutral states.

What do Finland and Sweden want from the drills? A spokesperson for Sweden’s Defense Ministry said that the nation intended to prepare its troops for air operations. The official also said that the Baltic Sea provided a unique opportunity for the drills taking into consideration the intense freight traffic activity.

The new drills do not violate any regulations. Non-NATO members are entitled to participate in the drills, which the alliance holds.

Konstantin Sivkov, a military expert with the Academy for Geopolitical Sciences, told Pravda.Ru that the West was most likely working on the establishment of the new world order.

“The fact that two neutral states - Finland and Sweden - participate in NATO’s drills shows that there is a wider bloc being formed in the West,” he said.

“The West intends to redistribute primary resources against the background of the ongoing economic crisis. It is possible to obtain cheap raw materials militarily. The fact that right and ultra-right factions win the recent elections to the European Parliament is quite indicative. The same was taking place during the 1930s, which also coincided with the global economic crisis. A war proved to be a way out of the crisis back in those years. It looks like history repeats itself today.

“As far as Russia is concerned, the country finds itself between wind and water. NATO is holding its drills near Russia’s southern and northern borders, which is not incidental. The alliance approaches Georgia as a springboard to capture the energy resources of the Caspian Sea region. The north is attractive for the opportunity to attack Russia’s key centers,” the expert said.

Indeed, the drills are not being held within the scope of either the struggle against international terrorism or the intention to practice rescuing operations under the conditions of natural disasters. The Loyal Arrow exercise was formally announced as the event to train the cooperation of aviation units in the regulation of international armed conflicts. As a matter of fact, NATO is working on radio interception, countermeasures activity, air and sea battles. To put it in a nutshell, NATO organized the exercise to train the destruction of enemy’s operational aircraft and navy, which al-Qaida does not have, of course.

Russia was a regular member of such drills since 1993. Moscow decided to cease its participation in NATO’s maneuvers after Georgia’s aggression against South Ossetia in August 2008. Nearly a year has passed, but the relations between Russia and the alliance have not improved.

It may seem at first sight that the current drills in the Baltic Sea do not deserve a lot of attention. Western journalists say that it was Russia’s decision to pull out from the drills in which the nation participated previously. Nevertheless, the maneuvers near Russia’s borders in the north and in the south are obviously a provocative act.

Sergey Balmasov
Pravda.Ru

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Russia, Belarus, Kazakhstan to seek WTO membership together

09.06.2009, 18.50

MOSCOW, June 9 (Itar-Tass) -- Russia, Belarus and Kazakhstan will enter into the World Trade Organization (WTO) as a common customs space and therefore will stop separate negotiations on WTO membership, Prime Minister Vladimir Putin said after the Tuesday meeting of the ruling body of the tripartite customs union.

“The prime ministers of Russia, Belarus and Kazakhstan will notify the WTO of their intention to start negotiations on the accession of the tripartite customs union to the organization and the end of national negotiations on WTO membership,” he said.

“The entry into the WTO is our common priority, but we want to do that as a common customs space,” he said.

“While fulfilling the order of chiefs of state to prioritize the formation of the tripartite customs union, the prime ministers confirm their adherence to the accession to the WTO but note that the accession process has been impeding integration,” says a statement of the Russian, Belarusian and Kazakh premiers posted on Tuesday.

“The three countries have a large economic potential and profound integration benefits, so they approve a common customs tariff, which will be presented to the EurAsEC summit. The tariff is due to enter into force on January 1, 2010,” the statement runs.

The prime ministers approved the schedule of forming the common customs space, with due account of the beginning operation of the customs union on January 1, 2010, and the completion of all customs union formalities before July 1, 2011.

On behalf of the tripartite customs union, Russia will ask the WTO to suspend national membership negotiations, First Deputy Prime Minister Igor Shuvalov said. He explained the move with Russia’s presidency in the customs union this year.

Russia will intensify efforts in the development of a special relationship with the European Union, in particular, in the formation of a free trade zone, Putin said.

“However, these processes will be held in line with the tripartite customs union agreement,” he remarked.

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Russia puts its WTO entry in doubt

By Catherine Belton in Moscow and Frances Williams in Geneva

Published: June 9 2009 22:59 | Last updated: June 10 2009 07:46

Moscow threw its 16-year campaign for World Trade Organisation membership into doubt on Tuesday when Vladimir Putin said Russia would only join as part of a trade bloc with Kazakhstan and Belarus.

Mr Putin, Russia’s prime minister, said in a joint statement that negotiations for all three countries would begin anew on the basis of the customs zone.

“Our priority remains WTO entry, we confirm this, but already as a customs union and not as separate countries.”

The turnround could add another significant delay to Russia’s entry into the 153-member global trade body just as the European Union had said accession was near after more than a decade of stop-start negotiations. Russia is the largest country outside the trading body.

The WTO said it had not received any notification from Russia or its partners of their wish to change the basis of membership talks.

There are no precedents for negotiating the simultaneous WTO accession of all members of a customs union. It would be within the rules, trade officials say, but the three countries would have to agree a common negotiating position in advance and decide who would speak for the customs union.

“The three countries referred to are at very different stages in accession negotiations. It is difficult to see how the negotiation process can be harmonised,” said one EU source. One person close to another large western WTO member said: “We are in deep shock. It looks like they are trying to brake the process.”

Mr Putin’s announcement that Russia was scrapping talks as an individual nation came days after senior EU and US trade officials held top-level talks at the St Petersburg investment forum in which Russian officials said they were committed to ironing out differences to ensure Russia’s soonest possible entry.

Catherine Ashton, EU trade commissioner, had said Russia and the EU had agreed its WTO accession should be completed by the end of the year. Russia’s accession had long been dogged by issues over EU objections to import duties on timber and cars, while talks with the US had stalled after Russia’s war with Georgia last year.

Mr Putin was speaking after the three former Soviet states agreed to create a long-planned customs zone by January 1 2010.

Dmitry Medvedev, the Russian president, said the creation of the customs union did not mean Russia was rejecting membership of the WTO “even though the process dragged out and in recent years was more like a feast of promises”.

Igor Shuvalov, the first deputy prime minister, said joining the WTO as a customs zone would speed the process up rather than slow it down.

The EU trade commission said the EU wanted to probe the comments before drawing conclusions, but a spokesman added that during the talks in St Petersburg “the Russian side said it was committed to WTO accession by the end of the year”.

“But should the basic parameters of these negotiations be changed this would create a new situation,” he said.

Sergei Markov, a member of the ruling United Russia party, said that Russia had grown tired of the repeated delays on accession talks which he said were being caused by politicking by Russia’s western partners.

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Israeli firms in Turkey border mine clearing bids
The winner can have the land along the Syrian border for agricultural use for 44 years.

Lior Baron and Merav Ankori2 Jun 09 12:18

Turkish paper "Sunday's Zaman" reports that leading international corporations are bidding in a tender to clear mines along the 877-kilometer Turkish Syrian border. Some of the bidders are Israeli companies. Other Turkish media reports that the tender is worth more than $500 million.

"Sunday's Zaman" adds that Turkey's Minister of Finance Mehmet Simsek declined to disclose the names of the bidders, but the paper has learned that there are 14 companies. The paper said that the minister's reticence was because the bidders include seven companies with ties to Israel, and three other companies indirect Israeli business ties.

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Turkey's Parliament is due to debate a bill on the mine clearing, which includes allocating the cleared land to the winning company for agricultural use for 44 years. This has angered Turkey's National Movement Party (MHP), and called for the bill to be suspended.

According to "Sunday's Zaman", Syria is also an issue, because it does not want Israeli companies along its northern border and "does not welcome the idea of awarding the mine clearing tender to Israeli companies."

"Sunday's Zaman" notes that Israeli companies have offered very competitive prices in the tender. "If the tender is performed according to the Public Procurement Law, it is hardly possible for any company other than the Israeli companies to win. Indeed, Israeli companies are specialized both in demining and in agriculture," says the paper.

"Sunday's Zaman" says that the tender could a major item during Turkish President Abdullah Gul's official visit to Israel and Syria, and that the government decided to postpone the mine clearing bill until after the visit.

"Sunday's Zaman" quotes MHP deputy Prof. Mehmet Gunal as saying, "We suggest that agricultural use of such a big and strategic stretch of land should not be merged with the mine clearing tender. If such merging is made, we see that Israeli companies are being described. It would be a big thing for the Turkish-Syrian border to be controlled by Israel for a period of 44 years. We have identified that out of the 14 applicants, seven have ties with Israel. Three more have indirect connections with Israel. If demining is merged with agriculture, there is no other company that can do this besides the Israeli companies."

According to "Sunday's Zaman", the Israeli bidders in the tender are Quadro Ltd., Maavarim Civil Engineering Ltd., International Explosive Ordnance Disposal Engineering Ltd. (IEOD), and a UK-Israeli firm, Red Wings Ltd. The other bidders are British firms Armtrac Ltd., Bactec International Ltd., Aardvark Clear Mine Ltd., Specialist Gurkha Inc., and MineTech International; French firm Geomines SAS; Croatian firm Doging; Ukrainian firms RYBD; a Ukraine-Danish consortium comprising Scandinavian Demining Group, Ukrabarone Exp., and Damacon Company; and Germany's Reinmetall.

Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2009

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【足利事件】最高検ナンバー２が菅家さんに謝罪
2009.6.10 17:48

　栃木県足利市で平成２年、４歳の女児が殺害された足利事件で、最高検の伊藤鉄男次長検事は１０日午後、記者会見を開き、無期懲役が確定したが、再審請求即時抗告審のＤＮＡ型再鑑定で真犯人の体液とＤＮＡ型が一致しないとする結果が出たため釈放となった菅家利和さん（６２）について、「真犯人と思われない人を起訴し、服役させたことについて大変申し訳ないと思っている」と述べ、検察当局として初めて謝罪した。再審開始決定前に最高検ナンバー２の次長検事が謝罪するのは異例。

　最高検の検証チームが調査を継続中の段階で謝罪コメントを発表したことについて、伊藤次長検事は「検察として謝罪するということ」と述べた。

　富山県氷見市の男性が平成１４年、強姦と同未遂の容疑で誤認逮捕され、約２年間服役した冤罪（えんざい）事件では、１９年１月に誤認逮捕を発表した４日後に富山地検の検察官が男性に直接謝罪の言葉を伝え、一週間後には、同地検の検事正が改めて直接謝罪している。

　菅家さんは釈放後の記者会見で「この１７年間ずっと思ってきたのは、出所したら刑事たちと検察官に絶対謝ってもらうということ」と、直接の謝罪を求めているが、伊藤次長検事は、直接の謝罪については「即時抗告審、再審公判の推移を踏まえて早急に対応したい」と述べるにとどめた。

　また最高検は同日、東京高検に対し、速やかな再審開始と早期判決のため、適切に対応するよう指示した。

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End of Kurdistan deadlock helps prompt Genel Heritage merger

By William MacNamara

Published: June 9 2009 19:20 | Last updated: June 9 2009 19:20

Until last week, the defining aspect of Iraqi Kurdistan’s oil wealth was how little of it was coming out of the ground.

For years, a political deadlock between Iraq’s central government in Baghdad and Kurdistan’s regional government in Erbil blocked the development and flow of oil in the semi-autonomous Kurdistan region of Iraq (KRI). The US Geological Survey estimates that the region could contain 40bn barrels of oil.

But a June 1 ceremony, attended by officials from both the Kurdistan and Baghdad governments, saw limited oil start to flow from the area. And although scepticism remains about the durability of this breakthrough, the move has prompted a round of consolidation among the region’s oil operators.

On Tuesday Heritage Oil announced a merger with Turkey’s Genel Energy to create a FTSE 100 oil company whose initial focus will be Kurdistan.

Paul Atherton, Heritage finance director, said that the merged company has ambitions to be a “new regional giant” among the small oil explorers drilling in a patchwork of licence areas in Kurdistan, which borders Iran and Turkey.

And, as revealed by the Financial Times on Tuesday, Korean National Oil Company and Addax Petroleum, two other companies with licences in Kurdistan, are in preliminary talks about a possible takeover or asset deal.

Cukurova stake

Cukurova, one of Turkey’s biggest conglomerates, will become a 50 per cent shareholder in a London-listed oil company following the merger of Genel Energy, its subsidiary, with Heritage Oil.

Heritage claims the merger will also create a new member of the FTSE 100 index.

Mehmet Emin Karamehmet, chairman of the Cukurova conglomerate, has been proposed as a non-executive director of the enlarged company, to be known as “HeritaGE”.

In his mid-60s, Mr Karamehmet avoids publicity but is regularly listed by Forbes as one of Turkey’s richest people.

Cukurova, which is not listed, controls a clutch of assets ranging from manufacturing to media. Its most valuable investment is its stake in Turkcell, the country’s dominant mobile phone operator.

Cukurova came close to collapse in 2001, when the state seized two of its banks that had made huge losses on lending to other companies within the group. But Mr Karamehmet fought to regain control of his stake in Turkcell and rebuild the group’s fortunes. Genel Energy, the group’s only energy venture, was founded in 2002.

The merger of Heritage and Genel is based on combining the former’s portfolio of undeveloped oil assets with the latter’s capital and engineering expertise.

One banker close to the deal suggested it could lay the ground for a new pipeline to be built through the centre of Kurdistan, linking fields in which either Genel or Heritage have an interest, such as Miran, Taq Taq and Tawke.

Kurdistan’s regional government says that, as of June 1, oil is flowing at a rate of 100,000 barrels per day from the Taq Taq and Tawke fields.

But there has been no agreement on how the operators of Taq Taq and Tawke – which include DNO of Norway, Addax, and Genel – will be paid.

Ashti Hawrami, Kurdistan’s oil minister, insists that these are “details” that will be solved quickly, and that focus on payment misses the bigger achievement of how the Erbil and Baghdad governments have worked out a mechanism to share Kurdistan oil revenues.

SOMO, Iraq’s state oil marketer, will market all oil exported from Kurdistan, with proceeds going to the treasury in Baghdad. The Kurdistan government will then receive 17 per cent of oil revenues, with some of that money going to the operators.

But Mr Hawrami and Hussein Shahristani, Iraq’s oil minister, have not resolved all of their differences. Mr Shahristani claims that many of Kurdistan’s oil contracts are illegal. However, Mr Hawrami claims that Mr Shahristani “does not even speak for his whole ministry”.

Genel and Heritage have taken comfort from a quotation by Jalal Talabani, Iraq’s president, at the June 1 ceremony. “The oil deals signed by the KRG are legal and constitutional,” Mr Talabani said.

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Blow for Berkeley as Saad reduces stake

By David Fickling

Published: June 9 2009 12:16 | Last updated: June 9 2009 20:25

Saad Group, the Saudi Arabian investment company, has sold half its stake in Berkeley, sending shares in the UK housebuilder plunging to their lowest level since last autumn.

Berkley Homes Graphic for UK CompaniesSaad was seen as a long-term core investor and partner for Berkeley, and formerly held just under 38m shares, equivalent to 29 per cent of the total equity.

Shares in Berkeley closed at 782p, a drop of 43p, having fallen as low as 725p in early trading.

Citigroup placed 16.1m shares at 701p, but Berkeley could not confirm rumours that Credit Suisse was trying to place a further 4.4m shares at 715p.

Analysts said the sale was likely to have been prompted by a need to raise cash at Saad, which last week said that it was carrying out a debt restructuring because of a “short-term liquidity squeeze” relating to some of its banking assets in Bahrain.

Maan Abdul Wahed Al-Sanea, the Saudi group’s chairman and chief executive, had his personal and family bank accounts frozen last month by order of Saudi Arabia’s central bank.

Moody’s and Standard and Poor’s, the ratings agencies, last week withdrew their coverage of Saad, saying that they lacked adequate information to maintain the ratings.

Berkeley is considered the best-managed of the UK’s large listed builders and the only one to hold net cash at a time when most of its peers have spent the past year in debt negotiations with their banks.

End of an era

The sale of Maan Abdul Wahed Al-Sanea’s stake in Berkeley marks a reversal for an investor whose links with the group go back 20 years.

Mr Al-Sanea, who was this year ranked as the world’s 62nd-richest person by Forbes, was a relative unknown in the UK until he announced the acquisition of a 3 per cent stake in HSBC in 2007.

That revelation prompted a flurry of interest in the City in the Kuwaiti-born former fighter pilot, whose Berkeley stake had previously been his only significant UK investment.

Within days of the HSBC announcement, Andrew Buxton, a former chief executive and chairman of Barclays, was appointed to the board of Saad Investments, Mr Al-Sanea’s Cayman Islands-based overseas investment company.

In July 2007 he built up a 5 per cent stake in 3i Quoted Private Equity.

Saad Group holds large slices of Petra Diamonds, an Aim-listed miner, and Eatonfield, an Aim-listed property developer.

Mr Al-Sanea’s estimated $7bn (£4.3bn) fortune was built on local property and construction companies. But without oil wealth, Saad Group is exposed to the changing value of its core investments.

It is the only one of the UK’s housebuilders that is valued higher than the net value of its assets. Despite selling little more than 3,000 houses a year, it was until last week given a higher market capitalisation than Taylor Wimpey (which sells 20,000 houses a year) and Persimmon (which sells 10,000 houses).

Tony Pidgley, Berkeley’s managing director, is famed for correctly calling the top of the late 1980s housing bubble and then buying land from distressed sellers. Saad had an important role in that period, building up a 10 per cent stake from 1989 and participating in a series of joint ventures in the 1990s to buy land.

Chris Millington, an analyst at Numis, said that Saad’s problems would raise questions about Berkeley’s plans to launch new joint ventures with the group, which were announced in 2007.

“The whole idea was that in order for Berkeley to invest in good quality land it needs the big sites that you can keep off the balance sheet while they mature. The joint ventures were feeders for the main company,” he said.

“Longer-term they may lose out on some of those plots of land, but Berkeley’s ability to invest is still very large and in the short term it won’t have any impact.”

John Messenger, an analyst at Royal Bank of Scotland, highlighted Saad’s decision to sell a slice of its £311m Berkeley stake, rather than some of its 2 per cent share of HSBC, which is worth £1.8bn.

“You’d have thought that shipping out a few shares of HSBC would cause far fewer ripples in the market, but some of these shares may have been collateral with particular banks so it’s hard to know,” he said.

Mark Stockdale at Berkeley’s broker UBS, said the sale would mean “operationally zero” for Berkeley, which would present a “thumping capital position” at its preliminary results later this month.

Rob Perrins, Berkeley finance director, said that the sale was “very sad”.

“They’ve been a very hard but loyal shareholder, very supportive and long-term performance driven,” he said. “Hopefully Saad will work through this and work it out.”

He said that Berkeley had not known until Tuesday that Saad was planning to sell down its stake. Berkeley meets Saad about six times a year in shareholder and quarterly meetings.

At the most recent meeting, at the time of the group’s £50m share placing in February, there had been no suggestion of trouble. “[Al-Sanea] was very supportive. He took up the placement,” said Mr Perrins.

Saad said it had no comment to make on individual transactions, but was making progress with its restructuring plans.