Daily Excelsior...Business

Forex reserves cross USd 93 billion-mark at new record high .....

Guj Electricity Board will cut power to industry for 2 days .....

NABARD launches credit scheme for artisans, rickshaw pullers .....

Rangarajan for moving faster to common market within country ....

Key senator presses Bush to lift steel tariffs

WASHINGTON, Nov 15: The chairman of the senate finance committee on Friday urged President George W Bush to end US tariffs on steel, a move he said would help jump-start recovery in the US manufacturing sector.

Sen Charles Grassley, an iowa republican, said "changed economic circumstances" warranted dropping the duties, which Mr Bush imposed in March 2002 to help the US steel industry after a string of bankruptcies that the companies blamed on unfairly traded imports.

Earlier this week, the World Trade Organisation issued a final ruling against the US steel tariffs. The European Union has threatened to retaliate on 2.2 billion of US exports by mid-December if Mr Bush does not drop the duties before then.

Mr Bush said on Thursday he was "in the process of reviewing the extent to which the industry has been restructured" under the duties and would decide whether to lift them "within a reasonable period of time."

One day earlier, US representative Robert Zoellick said that cost reductions, productivity gains and new union contracts were all signs of a stronger, more competitive steel industry since the tariffs were imposed.

Grassley’s letter gives the White House more ammunition for arguing it is lifting the tariffs for domestic reasons, rather than "buckling under" to the threat of EU retaliation.

He said heavy manufacturing job losses that have been a headache for the White House give Bush a legal justification for lifting the duties under US trade law.

"The substantial declines in employment within US manufacturing constitute changed economic circumstances under which the steel safeguard tariffs will no longer be effective in helping to ensure the long-term competitiveness of the US steel industry," Grassley said. "Rather, they will undermine that very goal, and the future economic and social costs of the steel safeguard tariffs will far outweigh the benefits."

A White House spokeswoman said Mr Bush was listening to all points of view on the steel tariffs ahead of his decision.

Meanwhile, there was another sign on Friday that the White House was leaning toward lifting the duties, which cover 10 categories of steel and initially ranged up to 30 percent.

As of late afternoon, Zoellick still had not asked the US International Trade Commission to review the WTO ruling.

That suggests the administration does not plan to somehow modify its three-year steel tariff program to comply with the WTO ruling, as US steel companies have argued the United States has the right to do. The ITC provided the legal basis for Mr Bush’s original decision to impose the duties. (AGENCIES)

S Korea economy seen growing 2.9 pct in 2003-Paper

SEOUL, Nov 15: The South Korean economy is likely to grow 2.8-2.9 percent this year, helped by a global recovery and a revival in domestic consumption and corporate spending, a local newspaper said on Saturday.

"The economy has bottomed out...And this year’s growth is likely to come in at 2.8-2.9 percent as further sign of a global economic recovery will boost corporate investment and consumer spending," the Korean economic daily quoted a Finance Ministry official as saying.

Finance Minister Kim Jin-Pyo said on Friday the economy would recover in the first quarter of next year.

South Korea’s economy, the fourth-largest in Asia, entered its first recession in five years in the first half of this year, hit by weak consumer spending.

The Central Bank has said the economy touched its bottom in the second quarter but it would not be confident of a recovery until domestic consumption began growing at a sustained pace.

The Central Bank upgraded its view on the economy in early November and said 2003 economic growth was faster than it had forecast a month before.

The bank of Korea forecast gross domestic product in 2003 would be three percent or more higher than in 2002, when GDP grew 6.3 percent. (AGENCIES)

African countries want WTO talks to restart soon

CAIRO, Nov 15: A group of 12 African countries urged on Friday a quick resumption of deadlocked World Trade Organisation (WTO) talks, saying a compromise text proposed by Mexico in September was a good starting point.

The United States wants to restart the so-called Doha round of WTO talks, which broke down in Mexico in September without agreement on key issues, based on a compromise text composed by Mexican Foreign Minister Luis Ernesto Derbez.

"The countries agreed that while the Derbez text still needs substantial work it would be a good starting point for future discussion so as to preserve the progress made in Cancun," the African nations said in a statement after a two-day meeting in Cairo.

WTO Director General Supachai Panitchpakdi, who attended the talks, said last week the Cairo meeting was crucial to get free trade talks back on track. The talks crumbled after rich nations faced off with poorer countries over issues including agricultural subsidies laid on by developed nations.

African countries represented in Cairo were Benin, Botswana, Burkina Faso, Chad, Kenya, Lesotho, Mali, Mauritius, Nigeria, Senegal, South Africa and Egypt.

Supachai is trying to make progress before a December 15 meeting in Geneva that will set the global trade club’s agenda for next year. The deadline for concluding the Doha round of trade talks is the end of 2004.

"The multilateral trading system remains the most transparent, predictable, secure and durable conduit to expand free and fair trade among nations," the African countries statement said, adding that the ministers wanted negotiations to "be resumed as soon as possible".

Supachai told reporters on Thursday there was still hope for the Doha round as the United States had shown flexibility at a meeting of Pacific Rim leaders in Bangkok last month, but the European Union needed more time for internal discussions.

"The US has shown flexibility in APEC in Bangkok. The EU...are a big group of countries and they need more time and we have to have understanding for that — that they are not participating does not mean that they are blocking — they have their own processes," he said during the Cairo meeting.

"This is a huge round because we have more members participating and we have more issues. It is not unusual that we would have difficulties along the way," he said. (AGENCIES)

Commonwealth head warns of trade war if talks fail

BRUSSELS, Nov 15: The executive head of the 54-nation commonwealth raised the prospect on Friday of trade wars and chaos if negotiators cannot revive global commerce talks that collapsed in September.

Secretary-General Don Mckinnon also opened fire on the United States and European union for subsidising farmers to the detriment of poor countries.

The commonwealth is composed mainly of former British colonies, many of them developing countries in Africa and Asia, and Mckinnon said the best option would be for a successful deal that could help poor nations on these continents.

"The second option would be a recipe for chaos, leading to a hodgepodge of bilateral agreements and new trade wars, to an extent never seen before," he said.

The World Trade Organisation (WTO) talks in Mexico aimed to bring down barriers and open markets. Another goal was to give developing nations a better deal from global commerce.

"After the breakdown of talks in Cancun, all the players must reconsider their positions and realise that everyone stands to lose from another failure," he added.

The talks in the mexican resort collapsed dramatically on their last day due to a standoff mainly between poor and rich nations over whether to introduce new rules on competition and investment into trade agreements.

Clashes over EU and US farm subsidies also undermined the chance of an agreement at the meeting.

Mckinnon highlighted the need for the United States to cut its 4 billion of subsidies to cotton farmers, a key demand from rival producers in west Africa, such as Benin and Chad.

"The longer this apartheid continues, the more anger, resentment and envy it will cause. That is not good for world stability," Mckinnon said.

Developing states also have to take their part in world trade, by reducing tariff and non-tariff barriers, he said.

Trade negotiators will gather in Geneva on December 15 for their first meeting since Cancun discuss how to get the negotiations moving again. (AGENCIES)

BCCI moots export status for shipping industry

MUMBAI, Nov 15: Bombay Chamber of Commerce and Industry (BCCI), in its white paper on ‘strategic options for Indian Ports and Shipping’ to Shipping Ministry, demanded that shipping industry must be granted ‘export’ status and national fleet should be created with ‘critical mass’.

The paper was presented to Union Minister for Shipping Shatrughan Sinha and Shipping Secretary D T Joseph at a function held here. The intention is to provide an integrated and comprehensive strategy for the country as a whole given the changing technology in the shipping, logistics and transportation industries.

"Benefits under import-export policy as well as accelerated depreciation benefits should also be given to shipping companies. Moreover, India can provide host of peripheral services in financial, insurance and legal sectors. Tonnage tax regime should be introduced for indian shipping companies. Ships registered under Flag of Convenience (FoC) do not have any tax liability which affects international competitiveness of Indian shipping companies," it said.

Regarding tax regime for Indian seafarers, BCCI has suggested to treat service of Indian seafarers serving outside Indian ships from the time they sign on for service until they sign off.

"Container shipping and the India offshore industry need to be treated as thrust areas and the ship building subsidy should be utilised preferably for container ships. Investments in container shipping could be encouraged through some fiscal incentives and shipping companies need to provide the entire logistical chain through end-to-end service to meet future volume flows and achieve economies of scale," it said.

In the wake of the fact that terminals at Jawaharlal Nehru Port Trust (JNPT) currently serve 63 per cent of total India container trade, the trade contiues to grow at 18 per cent per annum requiring an immediate new terminal capacity and evacuation services in the form of rail and road operations.

The white paper noted "India should develop two ports - JNPT on the west coast and one port on the east coast as global transhipment hubs. Foreign flagged feeder vessels should be allowed to operate on the coast to support their main line activities by relaxing cabotage laws. A review of the present policy of cabotage and a network of coastal feeders is needed."

The chamber also mooted steps to enhance competitiveness through appropriate pricing strategies and re-engineering public sector ports as landlord ports. (UNI)

Embraer 170 gains CTA provisional certification

MUMBAI, Nov 15: The Embraer 170 commercial airliner today gained provisional type certification from the Brazilian Airworthiness Authority - Centro Ticnico Aeroespacial (CTA).

According to a release, issuance of a similar certificate by the US Federal Aviation Administration (FAA) is expected to happen soon.

This provisional type certificate means that the aircraft meets international safety standards and allows the delivery of the Embraer 170 to airlines for the beginning of crew training and route testing flights.

"The conclusion of this part of the Embraer 170 certification process is an important step for the Embraer 170/190 programme," said Luis Carlos Affonso, Embraer S senior vice president, engineering and new products development.

"The professionalism, dedication and resolve of Eembraer and CTA team members have allowed us to meet this goal," he said.

The Embraer 170 test campaign was completed with very good results in terms of performance, comfort and reliability. The innovative electronic flight control system (fly-by-wire), with software developed by honeywell, had its architecture and functionalities approved in extensive flight and ground tests. However, recent discussions between Embraer, Honeywell, CTA, FAA and European Joint Aviation Authorities (JAA) representatives established a mutual understanding that the flight control system software certification documentation shall be supplemented, before definitive type certification is granted in the first quarter of 2004.

"Honeywell is fully committed to a swift completion of the final steps of the formal certification process for the fly-by-wire system. The Embraer 170 is a new class of aircraft that brings technologies previously found only on larger air transport aircraft," said John Uczekaj, executive vice president and general manager of Honeywell Business, regional and general aviation.

"Results of the certification flight tests make us very confident in the design and operation of the fly-by-wire system," he said.

Alitalia express, having considered the situation described above, has opted for rescheduling the delivery of its aircraft to 2004, after the definitive type certification is granted. Embraer and US airways are currently engaged in discussions aimed at defining initial deliveries of the Embraer 170.

With the postponement of final certification, Embraer is taking a conservative approach as to its possible consequences, and therefore the eight Embraer 170 aircraft originally scheduled to be delivered this year to US airways and Alitalia are being excluded from the company’s 2003 delivery forecast. Embraer now forecasts 102 aircraft to be delivered this year instead of the 110 previously announced.

As of September 30 the Embraer 170/190 family has 245 firm orders and 308 purchase options from air Caraobes, Alitalia, Cirrus, Gecas, Jetblue, Lot, Swiss and US airways.

Embraer is a major aerospace company with 34 years of experience in designing, developing, manufacturing, selling and providing after sales support to aircraft for the global airline, defence and corporate markets. (UNI)

Call to double dahej terminal’s capacity

NEW DELHI, Nov 15: Indian Oil Corporation, Bharat Petroleum Corporation and GAIL (India) Ltd are keen to double the liquefied natural gas import capacity at the Dahej terminal of LNG petronet from 5 million tonnes to 10 million tonnes a year.

Chairman of LNG Petronet and Petroleum Secretary B K Chaturvedi said marketing the more expensive lng would not be a problem as demand for gas is rising fast while availability is likely to increase from 65 Million Cubic Meters (MCM) to 120 MCM in next three years.

The statement assumes importance as major buyers of gas such as National Thermal Power Corporation have not entered into any agreement for buying LNG as yet.

The gas will be imported in liquid form from Rasgas in Qatar on board cryogenic ships and then reconverted into gas at the Dahej terminal before it is fed into the GAIL pipeline. The first consignment of the gas is expected to arrive in January next year. The project has been undertaken by petronet LNG, a company floated by IOC, BPCL and GAIL.

The power and fertiliser companies have been complaining that the price of the gas should not be above 3 per million British Thermal Units (BTU) as the price of electricity and fertiliser in the country is regulated. These companies are presently using gas from the ONGC and oil India fields, which is provided at cheap prices.

However, petronet is targeting power and fertiliser units that are currently using Naphtha, which costs more than LNG. The price of the imported gas is said to be around 4 per million BTU.

Petronet has also stated that it was ready to match the lowest price for natural gas offered by any private competitor.

The LNG petronet is also planning to extract C-2 and C-3 high valued gases from the imported LNG.

PLL, promoted by Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Bharat Petroleum Corp Ltd (BPCL) and GAIL, is investing Rs 800 crore in setting up a 5 million tonne LNG import and regassification facility.

The terminal is 95 per cent complete and commercial sales of LNG imported from Qatar will begin in end February or early March next year, Mr Chaturvedi said.

PLL is planning to expand as it sees greater demand for LNG in western and northern energy-starved India. India’s largest refinery IOC wants 1.5 million tonnes of LNG for use as fuel in its Koyali (Gujarat), Panipat and Mathura refineries while BPCL has sought 0.6 million tonnes for its Mumbai refinery. Similarly, Hindustan Petroleum Corp Ltd has sought 0.4 million tonnes for its Mumbai refinery.

Gujarat’s GSPCL has requested for 1 million tonnes, he said, adding another 0.9 million tonnes of LNG will go to ONGC for extracting C2/C3 (petrochemicals).

"We still see 27 million standard cubic meters per day of deficit in Gujarat and UP north," a senior official of LNG petronet said. (UNI)

Forex reserves cross USd 93 billion-mark
at new record high

MUMBAI, Nov 15: India’s Foreign Exchange Reserves crossed the US dollar (USd) 93-billion mark and stood at a new record high of USd 93.211 billion during the week ended November 7, gaining a whopping USd 613 million from a week ago.

According to the Reserve Bank of India (RBI)’s weekly statistics report, foreign currency assets which rose by USd 613 million to USd 89.287 billion, contributed the entire growth in the total forex reserve, while the gold reserve and the Special Drawing Rights (SDRs) remained unchanged at USd 3.920 billion and USd four million respectively.

The India’s Reserve Tranche Position (RTP) with the International Monetary Fund (IMF) dropped by USd 11 million to USd 1.194 billion during the week. The RTP, which could change from time to time due to India’s transactions under the financial transaction plan with the IMF, however, were not included in the foreign reserves.

Foreign currency assets, expressed in USd terms include the effect of appreciation/depreciation of non-US currencies like euro, yen and pound sterling, held in the reserve.

A dealer said that the strong gains in non-US currencies like the euro, pound sterling and yen, held in the forex reserve and the aggressive intervention by the RBI in the forex market to check the rupee’s appreciation, were the main factors that were driving the forex reserves up.

Forex reserve has moved up by USd 17.783 billion in the current financial year, while it shot up by USd 22.766 billion since January one this year.

The aggregate deposit of the scheduled commercial banks rose sharply by Rs 5,367 crore to Rs 13,91,209 crore during the fortnight ended October 31 from the previous fortnight, while the total bank credit jumped up by Rs 8,798 crore to Rs 7,61,210 crore during the same period. (UNI)

Guj Electricity Board will cut power to industry for 2 days

GANDHINAGAR, Nov 15: The Gujarat Electricity Board (GEB) has decided to cut power to industries in the state that do not have round-the-clock operations.

The cut will be for two days, starting today, to prevent a possible collape of the western grid.

This step has been taken to maintain the electricity voltage in the western grid, which has been facing power shortage due to excessive power drawn by the agricultural sector, said a Government release here today.

The GEB has also directed industries that operate continously (24-hours) to maintain a check on electricity use in their premises during these two days. This electricity cut will be implemented on November 15 and 16, 2003, the release added.

A GEB spokeperson in a written statement said that these measures were taken to save the entire western grid from a possibile collapse. A major cut has also been ordered in rural areas of the state. (UNI)

NABARD launches credit scheme for artisans,
rickshaw pullers

JAIPUR, Nov 15: The National Bank for Agriculture and Rural Development (NABARD) has launched a new credit card scheme for the benefit of artisans, weavers, rickshaw pullers, fishermen, self help groups and other micro entrepreneurs.

According to a NABARD press note here, tentatively some 20,000 Swarozgar Credit Cards will be distributed through banks in the year 2003-04. NABARD is the nodal agency for coordinating and monitoring the implementation of the scheme.

The scheme envisages sanction of credit upto Rs 25,000, or more depending on the case. "The card holder can operate on the card any number of times within the limit. The card can also be used as Savings Bank (SB) account, and credit balance in the account will be eligible for SB account interest," the press release stated.

It said the scheme aims at "providing adequate, timely and hassle free credit in the form of credit card covering block capital and working requirements of small artisans, handloom weavers, service sector, fishermen, self employed persons, rickshaw owners, other micro credit entrepreneurs, self help groups, etc. Through the banking system." (UNI)

Rangarajan for moving faster to common
market within country

NEW DELHI, Nov 15: Noted Economist and Chairman of the Twelfth Finanace Commission Dr C Rangarajan today said India should create a commomn market within the country in the first place while meeting challenges of globalisation.

Restrictions on movement of goods and other impediments should go and the set up should move faster towards introduction of the Value Added Tax(VAT) regime, Mr Rangarajan said.

He was delivering the inaugural address at the international conference on ‘distribution of responsibilities in federal democracies,’ hosted by the Jamia Hamdard University here.

Dr Rangarajan said federal structures will have to undergo a change to be able to respond to the forces of globalisation and the resulting international competition.

"If we are moving towards a borderless world, how much boundaries within a country matter or should matter?" he said.

In this context, he said, it was important here to point out that, as someone has remarked, "more market does not mean less Government but only different Government," and so the critical question was in what way this Government was different.

Transition to an increasingly market-based development and opening up of the economy requires policy changes, creation of market institution and a responsive de-centralised system of governance. For this the reform agenda of both the Centre and States should be caliberated in a coordinated manner in the spirit of cooperative federalism.

But, he said, it should not be forgotten that Governmental units in a federation have also a competitive relationship and to achieve efficiency, it was important to nurture this spirit of competition.

Dr Rangarajan said the traditional concerns of fiscal federalism such as assignment of taxes and responsibilities as well correction of imbalances continue to be important.

However, fiscal federalism should enable national and sub-national Governments to operate in such a way that it leads to efficiency in the use of resources.

A sound system of transfer of revenue shares to states should be formulated that should take care of the fiscal disadvantage of a state but discourage fiscal imprudence, he said.

Delivering the key-note address, former Chief Justice and Chairman of the National Commission to review the working of the Constitution, Justice A Venkatachaliah said the process of globalisation assisted by technological progress and development of an international human rights regime has compelled the scholars and leaders to review the whole concept of domestic sovereignty.

He said the diversity of human nature, and in the context of India the diversity of race, language, religion and geographical region makes federal structure the only viable form of Governmental set up.

The ongoing process of integration of the world, the powerful systems of information and technological developments indicate that in future federal structure of governance would not be choice but the destiny of man, he said.

The conference is being attended by experts from 11 countries including Canada, Brazil, Germany, United States, Switzerland and Nigeria.

"The dialogue is joint venture of the forum of federations and the International Association of Centres for Federal Studies (IACFS) and part of the multi-year collaboration: The global dialogue on federalism," said Prof Akhtar Majeed, Head of the Centre for Federal Studies of the Jamia Hamdard University.

Raoul Blindenbacher, a vice president of the forum said that their aim was to encourage open dialogue across international borders, providing an opportunity for genuine learning experience. (UNI)