White House 'asks GM Boss to Quit'

The chief executive of US car giant General Motors (GM) is to resign under pressure from the White House, Obama administration officials have said.

Rick Wagoner's removal comes hours before Barack Obama, the US president, is to unveil a second bailout for GM and its smaller rival Chrysler.

Wagoner, who has helmed the largest US carmaker for eight years, had said last week that he had no plans to quit, but was asked by the White House to go, said US media citing administration officials.

The GM chief executive and chairman came under fire for his leadership of ailing company late last year when US politicians debated a bailout for the carmaker.

Bailout plan

Obama, who is to unveil his plan on Monday for the car manufacturing sector, said the companies needed to do more if they were to qualify for further government bailout funds.

"They're not there yet," Obama told CBS television in an interview aired on Sunday.

"We think we can have a successful US auto industry. But it's got to be one that's realistically designed to weather this storm and to emerge - at the other end - much more lean, mean and competitive than it currently is."

Last week, Obama cited mismanagement "over the years" for some of the car industry's financial problems.

The industry has been pushed to the brink of bankruptcy, attributed to the global economic crisis, as car sales decline.

GM and Chrysler have asked for another $21.6bn on top of the $17.4bn in emergency loans approved in December.

Ford, the other member of so-called "Big Three" US carmakers, has said it has enough money to survive the downturn without government aid.

quoted from: Aljazeera.net

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Budget Cut won’t Affect Power Plant Project

DUBAI - Construction of a power plant in Dubai will go ahead despite concerns over budgets being cut next year, a senior energy official said. 


Around Dh13 billion has been slated for infrastructure developments this year, but it is not clear the same amount will be spent next year, said Saeed Mohammad Al Tayer, Chief Executive of the Dubai Electricity and Water Authority (DEWA).

“The budget will have to be revised next year,” he said. “It might be down.”

DEWA has announced a Dh75 billion spending plan to improve infrastructure in the city, although the money will not be spent all at once. 

Last week, the authority announced that it had delayed making a decision on awarding the contract for the Dh20 billion Hassyan mega power generation facility and water desalination plant in Jebel Ali.

The deadline for receiving bids will be September and officials will have three months to make a decision on who will build the facility, Al Tayer said.

Speaking to the Khaleej Times on the sidelines of the Water Technologies, Energy and Environment Exhibition (WETEX) on Sunday, he said that the project was to be developed in six stages. “There will be a staggered development,” he said. 

The facility when completed will be able to generate 9,000 megawatts per day. Each phase of the development will increase capacity by increments of 1,500 megawatts, Al Tayer said. 

It is hoped that the plant will provide the lion’s share of the power behind Dubai World Central, Dubailand and Dubai Industrial City.

However, Al Tayer said that energy consumption was rising across Dubai. “In the first quarter we are already higher than the budgeted consumption.”

Last year, DEWA introduced a new tariff system to encourage energy saving. A recent survey found that bills had risen by 60 per cent for businesses and 30 per cent for residential customers.

Officials at the authority hope to increase energy generation by 500 megawatts this year by investing in energy efficiency technologies.

quoted from: Khaleej Times

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Japan Fears FTA Gives S.Korea Jump on Trade with EU

Seoul's tentative agreement with the European Union on Tuesday to scrap tariffs on goods traded between them has raised fears in Tokyo that sales of Japanese goods will suffer in that vast market. 

The deal has also shown how far Japan lags behind its regional rival in forging free trade agreements (FTAs) with key trading partners. 

Japan, whose fortunes depend on international trade, has not even been able to start negotiating a similar agreement with the EU. 

Under the FTA, the EU is expected to abolish import tariffs on South Korean vehicles and home appliances within five years. 

The current rates on vehicle and TV imports are more than 10 percent. 

"It would put us at a disadvantage in our rivalry with South Korea," said an official of a major Japanese electronics manufacturer. 

Flat-panel TVs and other appliances that are directly exported from Japan to the EU market could be hit hard by a loss of price competitiveness. 

Some Japanese firms with manufacturing ties with South Korean companies have reacted to the news more calmly. 

Sony Corp., which in Europe assembles TV panels procured from South Korea's Samsung Electronics Co., for example, does not expect the deal to "be extremely disadvantageous." 

The latest deal will nevertheless have a major impact, given the fact that the EU, comprising 27 member countries, is even larger than the U.S. market. 

The EU is South Korea's second-largest trading partner after China. In 2008, South Korea chalked up a trade surplus of $18.4 billion (1.8 trillion yen) with the EU, far larger than the surplus of $14.5 billion it posted with China. 

The bilateral FTA would boost South Korea's gross domestic product by about 3 percent over the long term, according to an estimate released in 2006 by the Korea Institute for International Economic Policy. 

"The FTA would open the (EU) market on an unprecedented scale, so its effects should be great," a senior South Korean official said. 

"We are, of course, aware that it will strengthen (South Korean) competitiveness against Japanese businesses." 

Well aware its domestic demand is limited in scale, South Korea has actively pursued free trade deals with major markets abroad. 

Although the FTA signed with the United States in 2007 has yet to be ratified by either country, South Korea has already completed free trade negotiations with India. 

Earlier this month, Seoul agreed with Australia and New Zealand to start FTA negotiations. It has also flagged its intentions to accelerate talks with nations across Asia. 

Japanese trade officials have a growing sense of crisis over Seoul's progress. 

Japan's failure to secure a free trade deal with the EU was not simply a result of Tokyo sitting idly. 

From 2007 to 2008, business circles from both sides conducted a joint study. Their report revealed, however, that there was a big gap in their respective stances on tariffs, a key to FTA negotiations. 

To the EU, an FTA with Japan would not have particular benefits because Japan's tariff rates on industrial products are already low and its agriculture market offers little prospect of being opened much wider. 

Even if Japan called for talks, "the EU side wasn't interested," according to a senior Foreign Ministry official. 

Japan has signed FTAs or economic partnership agreements (EPAs) with 11 nations and regions, including ASEAN (Association of Southeast Asian Nations), of which nine have taken effect. 

But South Korea has forged further ahead, clinching deals with the United States, Europe and India, whose markets represent a huge slice of the global economy. 

Japan has instead counted on the Doha multilateral trade liberalization talks under the World Trade Organization. 

Adding to Japan's woes is the fact that the Doha round has stalled over a tug-of-war between the United States and emerging economies, with no successful conclusion likely by year-end.(IHT/Asahi: March 26,2009)

quoted from: Asahi Shimbun

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Dubai Ranked Most Competitive in ME

DUBAI - Dubai has the most competitive economy in the Middle East and ranks higher for its competitiveness than Japan, Germany, France or New Zealand, according to a new study released on Sunday. 


The emirate ranked 16th out of 65 economies surveyed in the National Competitiveness Report 2009, published by the Institute for Industrial Policy Studies of the National University of Seoul, in South Korea. The study was commissioned by the Dubai Competitiveness Council, an arm of the Dubai Economic Council.

The Korean institute has published the National Competitiveness Report annually since 2001, but this the first time that it has included Dubai. 

The US ranked No. 1 in this year’s study, followed respectively by the Netherlands and Denmark. Saudi Arabia, the Gulf’s largest economy, placed 48th , while Oman ranked 42nd and Kuwait, 30th.

Dubai’s strengths include its achievements in health and environment, intellectual property rights, corporate governance, government business strategy, and attracting foreign direct investment. Areas where it needs to show improvement include ethics and transparency, education and the quality of its work force, the study noted.

“This is one of the first steps towards our efforts in locating Dubai’s position in the global markets,” said Adel Al Falasi, Executive Director of the Dubai Competitiveness Council.

“The Dubai Competitiveness Council is trying to identify specific models and set of indexes for assessing competitiveness of cities and regions, which will enable us to target and address the obstacles to Dubai’s global competitiveness [on a] timely [basis] as global markets evolve,” Al Falasi said.

The authors of the competitiveness study — Professors Dong-sung and Hwy-Chang Moon, both from the National University of Seoul — said that Dubai seems focused on rectifying and improving some of the weaknesses they cited in their report. 

The Dubai government is taking steps to support the development of a more mature and stable economy, they added, presenting the findings of their study at a news conference. 

quoted from: Khaleej Times

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Shipping Industry Faces Overcapacity Amid Economic Downturn

A collapse in global trade combined with new capacity coming on stream has led to huge falls in freight rates and financial hardship for shippers 

CHEMICAL SHIPPING operators face difficult trading conditions in 2009, due in no small part to the global economic downturn. Put simply, there are currently not enough chemical cargoes to go around because of weakened global demand. Volumes are down by as much as 75%, which has led to overcapacity in the shipping market.

Owners blame this on the relentless production of new ships in Asia, which are flooding the market. Ship operators have publicly stated that Asian shipyards must adapt to the economic situation in order to avoid a crisis. Delaying production of new ships will be critical to protect the growth of the industry, they say. 

In response to the growing fleet of available vessels, shipbuilders in China have declared their intention to lower the ship age limit, which would mean chemical carriers having a maximum life span of 25 years. However, the global shipping fleet is expected to increase by 12% this year, despite declining orders for new ships. The chemical tanker fleet worldwide currently stands at around 4,500.

SUPPLY AND DEMAND CONUNDRUM

A consequence of this overcapacity is the impact on shipping freight rates. According to global chemical market intelligence service ICIS pricing, freight rates have been in steady decline over the past six months, with the European market seeing the largest average fall, at nearly 40%. 

The biggest decrease in the region was noted along the northbound route from the Mediterranean to the European continent for 2,000 tonne parcels, with levels falling from $71-75/tonne (€52-55/tonne) at the end of August, to $33-36/tonne in March - a decrease of 53%. This drop was a result of poor production levels in the Mediterranean and shipping overcapacity. 

"There used to be one or two ship owners applying for a cargo, but now there are as many as seven or eight offers," a London broker says.

Over the same six-month period, rates on the transatlantic eastbound leg had decreased on average by 35%, a considerably higher percentage than on the westbound route, which decreased by 22%. There were more benzene, toluene, xylene (BTX) cargoes on the Europe-US Gulf route, which kept freight rates from falling, owners say. Asia was the firmest market out of Europe, although rates had decreased an average of 19%.

Activity on the Europe-Asia route may be stimulated by the Suez Canal Authority (SCA) announcement, at the beginning of the year, of an indefinite freeze on transit fees through the Suez Canal. This is in response to the economic downturn and the escalating piracy problems in the Gulf of Aden. SCA chairman Ahmed Fadel predicted that traffic would fall by 7% over the year, as the number of vessels passing through the canal in December was down by nearly 20%, compared with October and November. 

The pitfall of lower freight rates, overcapacity and fewer chemical cargoes claimed its first victim at the end of last year, as Sweden's Svithoid Tankers was forced to employ two advisers to help save the company from liquidation. Other large ship owners, such as Malaysia's MISC have announced a cut in newbuild orders as the downturn takes hold.

A period of stability in difficult market conditions is expected from most sources. Demand - or lack of it - is seen as the key issue for the future. There is also the question of whether those producers operating at reduced rates could tighten the market and create some upward movement in rates. 

However, one analyst predicts that freight rates would not rise until the end of the economic downturn, which he thinks will be 2010. "[By then], freight rates will most likely recover, as demand and profitability return to the sector," he says.

quoted from: www.ICIS.com

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Asian Chemicals End-User Supply Chain Changes

Preserving credit and navigating erratic chemical markets are the keys for survival in 2009. But could the economic changes be so profound that they require a long-term change in Asian supply chain strategies?

HOW THE world has changed. Just a few short months ago, back in August 2008, McKinsey conducted a survey on changes in global supply chain trends over the previous five years.

"Executives point to the greater complexity of products and services, higher energy prices and increasing financial volatility as top factors," wrote the global management consultancy. Now the pressing issues for everybody down every supply chain include the credit crisis, much weaker and harder-to-read demand and the collapse in crude prices that has a deep - perhaps even permanent - effect on buying behavior. 

The more complex products and services that have been developed over the past five years still exist, of course, but the problem now is to get the kind of price premiums essential to pay back research and development, marketing and sales costs.

"Customers increasingly want cheap, cheap, cheap, but my job is to persuade them that if you only buy a low-grade polymer, you might end up paying more in the long run through poor performance," says a Southeast Asia-based sales executive with a global polyolefin producer.

And perhaps the biggest single change for Asia - one that might require a long-term reorientation of its economies toward greater regional self-sufficiency - is the collapse of exports of finished goods to the West. "Over the past decade following the Asian financial crisis, Asian countries set up policies that were more export-driven," says Tejas Parekh, export manager for Connell Brothers, the Asia-Pacific specialty chemical distribution company. 

Chemical companies need to focus more on price performance than ever before and watch closely for signs of an economic rebound, Connell advises. But the multitrillion dollar question is whether the changes in the world economy taking place during this downturn will last for a generation.

IT'S NOT ABOUT THE COST PER TONNE
"I don't care that much any more about how much I pay per tonne for my polyethylene (PE) and polypropylene (PP). What matters now is stretching my credit as far as possible," says the purchasing manager at a medium-sized Asia-Pacific plastics processor.

He is buying from more suppliers than before the crisis, "because in this way, if you add all the available credit this increased number of suppliers offer, this helps to partially compensate for my overall reduction in credit." Western PE and PP producers are demanding quicker payment and have reduced their volumes of credit, whereas at least the Middle East suppliers are only asking for more prompt settlements, he adds. 

The processor's own customers - often big confectionary manufacturers with major market muscle - are also taking longer to settle their bills. Another reason to buy from more raw material providers is to reduce the risk of bankruptcies. "If you only depend on a small number of suppliers and one of these goes bust, you face serious business disruption," he says.

Reduced demand means it also makes sense to buy more resin locally, either from domestic companies (therefore also avoiding any currency risk) or from Western or Middle East companies that have stored product in bonded warehouses in, say, Shanghai or Singapore. "Because demand is weaker, I can often no longer justify buying a full container-load of polymer from Saudi Arabia - the only size of delivery that makes economic sense. Instead, I am increasingly buying the odd few tonnes from just down the road."

There are even more reasons for not purchasing deep-sea cargoes. Extreme price volatility means that the price of a converter's resin could have changed four or five times before it arrives. The polymer could have fallen so steeply by the time it is delivered that the processor's customer demands a discount on packaging and wrapping material.

And if you are trying to stretch your credit as far as possible, you want to minimize the time from your cash outlay to when you receive payment from customers. The quicker delivery times from Asian, compared with deep-sea suppliers could help.

The credit crisis has become so serious for small and medium-sized enterprises that even good firms could be forced under, not because they are badly managed but because they make a minor miscalculation on purchasing raw materials versus sales. A few hundred thousand dollars over a credit limit and a bank might be forced to withdraw financing as it struggles to reduce loan exposure. 

"As for the type of credit being used, I would like cash-on-delivery from my customers but am not often in a position to achieve this," the processor adds. "The open account approach, where customers pay on the receipt of goods, is too risky as it doesn't have legal safeguards." So letters of credit, which provide legal protection, have become more popular during a period when supply is reduced.

MORE INFORMATION NEEDED
This has led to the expansion of business analyst teams. There's a need for more information on how chemical pricing markets function and where are heading. "We've employed more people because every $5.00/tonne I can save on my propylene glycol (PG) costs can make all the difference," says a Singapore-based regional procurement director of a consumer products company. Petrochemical companies, in response, also seem to be employing more analysts.

A further motive to build up Asian market-monitoring and sales teams is that big new capacities are being brought on stream by companies such as Saudi chemical giant SABIC and the Petro Rabigh joint venture between state oil company Saudi Aramco/Japan's Sumitomo Chemical in the Middle East. Such is the need to conserve credit that senior executives in the companies that buy basic chemicals are making all the major purchasing decisions. They are also, for the first time since they were junior business analysts, closely tracking market trends.

"Your sales story has to be exceptionally convincing as you are now talking to very experienced customers," adds the polyolefin producer sales executive. 

The producers are under the added pressure that this is a buyers' market because of the capacity additions. After years of end-users being squeezed by tight upstream supply and demand balances, it could be pay-back time for the next three to four years.

JUST HOW LONG WILL IT LAST?
There is no space here to go into details on arguments about why the world economy could be undergoing long-term changes. But in brief, if Western housing and equity markets take decades to recover, Asia will have to become much more reliant on its own demand. China has already begun the process of attempting to reduce its exposure to exports. 

"But as with the US, it lacks a good health care system. Making people spend more to make up for lost overseas trade could take a generation," says a US-born Beijing-based consultant.

There are many other reasons to believe why supply chains could become more local over the long term - not least the emergence of a global emissions cap-and-trade and/or tax system. Companies might also have to get used to more modest sales growth expectations in a world economy where growth could be constantly capped by scarce oil supply. 

Investment in boosting supply chain efficiency could, as a result, become a long-term requirement - difficult with budgets likely to stay under pressure. "The big task now is convincing our senior management that the economy might have changed for good. Let's hope this is not the case, but we should at the very least build this possibility into our planning," says an analyst with a second global polyolefin producer.

quoted from: www.ICIS.com

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Sustainability Tools Strengthen Chemical Supply Chain

Forging a green chemical supply chain involves deep scrutiny and collaboration

INCREASED REGULATIONS, cost optimization measures, and rising consumer concern about business ethics are driving chemical companies to delve deeply into the sustainability of their supply chain.

German chemical group BASF says its customers and investors are increasingly interested in the sustainability of their supply chain. The same sentiment was echoed by US-based Dow Chemical.

"We are a critical component of our customers' supply chain," says Dow spokeswoman Stacey Siler. "Many of our customers increasingly want to know that we are addressing challenges such as climate change and are socially responsible."

One of the company's ongoing efforts involves redesigning its supply chain networks, such as maximizing equipment loading and increasing the use of product exchanges and swaps to help lower mileage and reduce the company's carbon footprint. Dow has also customized transportation channel networks, which saves millions of dollars in energy costs.

"Improving financial performance and managing chemical safety across our supply chain are core competencies and imperative to meeting Dow's 2015 Sustainability Goals," says Siler. "Dow is constantly evaluating new technologies such as RFID [radio frequency identification] and GPS [global positioning system] to create new opportunities to further optimize energy usage and resource conservation."

BASF has been evaluating and identifying high-risk suppliers through its Safety Matrix program, which was established several years ago. 

The program systematically assesses the environmental, health and safety standards, as well as the labor and social standards of its suppliers and business partners.

"We choose suppliers not only based on economic criteria but also include their performance in the fields of environmental and social responsibility when making our decisions," says Tanja Castor, sustainability manager at BASF.

"We try to demonstrate to our customers that our established sustainable supply chain management is risk-based and therefore appropriate to not only minimize our risks but also the risks of our customers," Castor adds.

BASF also held supplier days in China and India last year to train suppliers on the company's requirements in the areas of environment, safety and social standards. Another recent BASF project, says Castor, is its 1+3 program in China, where the company shares information on sustainability standards with its partners in the value chain.

"The project aims to inform small and medium-sized enterprises about successful new methods of sustainable entrepreneurship," she adds.

HAND IN HAND
Collaboration seems to be the keyword for chemical suppliers when it comes to implementing a sustainable supply chain.

Like Dow and BASF, Dutch specialty chemical firm AkzoNobel notes the importance of collaboration in providing a seamless, integrated material flow from supplier to customer while upholding sustainability standards at the same time.

"Sustainability helps build a new level of partnerships not just based on product development but based on sharing knowledge and expertise in order to accelerate transformation," says Andre Veneman, director of sustainability at AkzoNobel.

It takes time, he adds, before the business case of sustainability is understood by all parties along the value chain.

"However, once suppliers and customers meet and start traveling together on the pathway to sustainability, then innovation processes accelerate. It's a change process - you need to select and engage enthusiastic and motivated people to embark on the journey," says Veneman.

Bena Halecky, US-based Procter & Gamble (P&G) Chemicals' product supply director, emphasizes the need to establish trust and long-term relationships with key partners.

"This is to ensure that they share our passion and commitment to sustainability," says Halecky. "One of our key operating principles is to seek business relationships with suppliers who share our values and then promote the application of these high standards among those with whom they do business," she adds.

P&G says it has already made significant and measurable improvements in many key areas of its supply chain as part of its 2012 Sustainability Strategies and Goals program. Some of these include reductions in the use of energy, waste disposal, water usage and overall emissions.

According to Veneman, one of AkzoNobel's key initiatives is to deliver products that are competitively priced and at the same time have significantly smaller environmental footprints. The company defines these products as "ecopremium" products or solutions.

"Each function from investment decisions to sourcing, research and development, and marketing contributes to this target," says Veneman. "Along the value chain, we have concrete programs in place to deliver ecopremium solutions to our customers."

THIRD PARTIES WELCOME
Third-party certification as a marketing and assurance tool has been proliferating within various sections of the chemical supply chain as customers and investors increasingly ask for proof of their sustainability commitments.

With its customers asking for data, Siler says Dow places tremendous importance on its Global Reporting Initiative (GRI), which provides an exhaustive reporting context for sustainability performance in Dow's enterprise. Dow earned an "A+" for its 2007 GRI report, as well as the highest rating for its sustainability report by theUS-based anaylst network the Sustainability Investment Research Analysis Network.

In terms of assessing sustainable product and processes, several companies now have their own tools, such as carbon footprinting, life cycle analysis and eco-efficiency analysis, although most say they are not averse to procuring third-party certification if needed.

"Third-party certification of ecopremium products is not a primary goal but for specific product ranges and customer groups, we have ensured third-party certification," says Veneman. "Our pursuit of third-party certification will depend on the value that this process brings to our operations, customers, and consumers," notes Halecky.

BASF, meanwhile, says its annual report, which is verified by external auditors, regularly publishes the level of implementation of its sustainable supply chain management.

CLOSING THE LOOP
The cradle-to-cradle (C2C) philosophy of designing chemicals that can harmlessly decompose or be reused and regenerated infinitely is considered as one of the holy grails for a sustainable supply chain. But is it impossible to reach?

Not so, says Michael Braungart, one of the pioneers of the C2C concept and cofounder of US consultant MBDC (McDonough Braungart Design Chemistry). Braungart heads MBDC's European equivalent, EPEA (Environmental Protection and Encouragement Agency), based in Germany. Both firms offer C2C certification.

"The main goal of a C2C design is not as much to certify that a product is good, but to motivate the chemical industry to get their innovation out into the market," says Braungart. "With C2C, we make chemistry attractive. We can help large companies to transform better molecules and make profits out of them."

AkzoNobel's director of sustainability, Andre Veneman, agrees and says C2C is a natural step towards developing a higher percentage of sales from the company's "ecopremium" products.

"For us, C2C is not about certification but about next steps in innovation," says Veneman. "It stimulates out-of-the-box thinking towards logistics, mobility, packaging - and more importantly it shapes new ways of cooperation with business partners who also want to accelerate their drive towards sustainability."

Previous C2C certification was mostly geared towards finished products, but MBDC launched its new C2C Approved Ingredient certification in January, which assesses the sustainability of product ingredients for human and environmental health, as well as their recyclability or compostability.

The certification, according to MBDC vice president of technical operations Jay Bolus, makes it easier for manufacturers to create ecologically intelligent products by choosing materials at the design stage that meet key sustainability criteria for material health and material reutilization.

"The point is, we don't want to create valuable chemicals from nonrenewable feedstock and just throw them away in a landfill, incinerator or somewhere where their inherent value gets lost. If there are some ways that these chemicals can be recaptured and reused, that will be ideal," says Bolus.

C2C certification is one of the many options that Procter & Gamble (P&G) Chemicals is considering, says P&G product supply director Bena Halecky. "Aside from the Life Cycle Assessment approach, we are already incorporating C2C principles within our environmental safety process." Dow Chemical says it is also assimilating all types of sustainability practices and concepts such as C2C, eco-efficiency and green chemistry.

BASF sustainability manager Tanja Castor says the company would recommend C2C in its eco-efficiency analysis if this were the best option for the whole life cycle of a product. "However, very often these alternatives are not the most sustainable ones due to efforts of the recycling steps, the usage of unsustainable materials and so on," adds Castor.

quoted from: www.ICIS.com

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Economy to Shrink 3%, Says Korn

Thailand's economy will shrink by a sharp 3% this year, worse than previously forecast, says Finance Minister Korn Chatikavanij.

Mr Korn yesterday said his ministry would put in place more fiscal policies to cope with the steeper-than-expected economic deterioration.

The government earlier forecast a contraction of up to 2% of GDP for the year.

"Without economic stimulus measures from the government, Thailand's economy could contract by 8% or 9% this year, which could cause almost 2 million workers nationwide to lose their jobs," Mr Korn said.

"The 3% shrinkage forecast has already taken into account figures that are the expected outcomes of the government's finance policies that will be implemented this year."

The finance minister said the government needed to continue its budget deficit policy next fiscal year with the deficit figure rising to 390 billion baht from 350 billion baht this fiscal year.

This fiscal year's deficit figure of 350 billion baht is equivalent to 3.5% of the country's GDP.

Mr Korn said the government would exercise its budget deficit policy cautiously because it needed to take into account the long-term stability of state's finances.

The government would also issue a royal decree to authorise the government to spend the existing 17 billion baht in revenues gained from the digit lottery programme launched in 2003 during the Thaksin Shinawatra administration, Mr Korn said.

The government did not dare spend the 17 billion baht after the Council of State, which looked into the legality of the lottery scheme, ruled it was not underpinned by any law. This meant the government had no authority to spend the money. 

The digit lottery scheme was scrapped by the coup-appointed Surayud Chulanont government.

Economist and former deputy prime minister Olarn Chaipravat said for each 1% contraction in GDP, some 400,000 people would lose their jobs.

Based on this premise, if GDP shrinks by 3% this year, down from 2.6% growth last year, unemployment could rise to over 2 million.

Satit Rungkasiri, the Revenue Department's adviser on strategic tax administration, said the department had forecast that country's tax revenues would fall 120 billion to 130 billion baht below its 1.4-trillion-baht target.

Mr Satit also said this year's tax revenue figure was even lower than in 1997, when the so-called "Tom Yum Kung" economic crisis hit the country.

"It might be because the revenue set a lower target during the Tom Yum Kung crisis. This year, we've set quite a high target," Mr Satit said.

Amara Sripayak, the central bank's senior director for the domestic economy, supported the government's plan to seek loans from foreign banks, saying the administration's spending of the money on infrastructure projects over the next three years would help boost investors' confidence in the country's economy over the long run.

She said private investors would not invest more in the Thai economy in the near future because many did not expect the Thai economy to recover within the year. 

"It's better for the government to spend on megaprojects over the next three years," she said.

Mrs Amara also supported the Finance Ministry's plan to give priority to the implementation of fiscal measures to spur growth. 

The measures would help boost the country's flagging economy, while those measures could be backed up by monetary measures as well, she suggested.

Meanwhile, MPs and senators will meet today to deliberate the government's proposal to borrow 70 billion baht from foreign banks to shore up the economy.

The House Secretariat has sent a letter to MPs calling on them to take part in the special sitting.

The government plans to seek 70 billion baht in loans from the World Bank, Asian Development Bank and Japan International Cooperation Agency to fight the economic slump.

The borrowing is aimed at financing investment in infrastructure projects, including logistics, water management systems, health care and education.

To be vetted by parliament are also a Thai-Japanese fiscal cooperation plan and a draft loan contract proposed by the Abhisit Vejjajiva cabinet.

The documents involve the Japanese government's initial agreement to lend 63 billion yen to Thailand to invest in the Red Line mass transit route from Bang Sue to Rangsit.

quoted from: Bangkok Post

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Pay Cuts and Freezes Spread as Inflation Plunges to 50-year Low

Honda became yesterday the latest leading employer to propose a pay decrease for its British staff as cuts and wage freezes ripple through the economy. 

The carmaker, which has imposed a four-month shutdown at its Swindon factory, has followed its British-based competitors Toyota and Jaguar Land Rover in offering pay cuts rather than job losses in the face of a slump in demand. 

Other manufacturers are likely to follow the move, fuelling fears of a downward spiral of falling incomes and prices that could drag the economy into a destructive deflationary rout. 

Anxieties that freezes on pay and, for many workers, actual wage cuts could become the norm will mount today as the headline retail prices index (RPI) gauge of inflation turns negative for the first time in half a century. With RPI inflation used as a benchmark for wage deals by employers across the country, its plunge into negative territory raises the prospect of pay being pegged at present levels for millions of workers. 
 

The City expects that annual inflation on the index will fall today from 0.1 per cent in January to a rate of between minus 0.5 and minus 0.8 per cent in the latest February figures. Even with inflation still in positive territory until now, pay freezes are already becoming far more prevalent – making up one in five of recent wage settlements, according to the pay research group Incomes Data Services (IDS). 

There is evidence that pay cuts are becoming more widespread. Last week the Bank of England’s network of regional agents reported that “a growing minority of contacts [at businesses] intended to impose pay cuts”. 

The Bank’s agents also found “wide-spread reports of plans for wage freezes”. Businesses have been telling the agents that “elevated concerns over job security had increased employees’ willingness to accept lower settlements”. 

Ken Mulkearn, editor of IDS’s pay report, said that many pay rises and pay talks for many staff were also now being deferred while employers assessed the worsening economic situation. “Pay freezes in a way are only the tip of an iceberg,” he said. 

The industrialist Sir Anthony Bam-ford called yesterday for wage subsidies for manufacturers to support employment during the recession. 

Sir Anthony, chairman of the construction equipment manufacturer JCB, said that the Government should subsidise the wages of workers who have been put on reduced hours because of falling demand. “Wage support is a better way of doing things because it is less brutal and less black and white,” he told the Financial Times. He said that JCB would not benefit from such a scheme because it had already made 2,500 redundancies since 2007. 

Concern over the worrying trends is being heightened as the economy’s new bout of deflation is expected to be much longer lasting in the present slump than for many decades. 

Although inflation on the RPI measure was last negative in March 1960, it was below zero for only the first three months of that year, as well as in May and June of 1959. This time round, RPI inflation is tipped to remain negative until next spring – and to fall as far as minus 4 per cent. 

In turn, that will put prolonged downward pressure on pay. “We are in uncharted territory,” Mr Mulkearn said. “The last time this happened was in 1960 but then it did not last very long. It was more of a blip.” 

The British Chambers of Commerce expects that deflation, at least on the RPI figures, will last at least a year. David Kern, its chief economist, said: “Wage freezes will become much more widespread. When you’re looking at a pay freeze it is often the difference between having a job or not.” 

For now some economists believe that a modest episode of deflation could actually boost the economy. Consumers, facing a squeeze on pay, will see spending power boosted by plunging fuel prices and falling mortgage costs that are driving inflation below zero. But the benefits are limited, as the costs of many other goods and services are continuing to rise. 

The Bank of England’s benchmark for inflation, the alternative consumer prices index (CPI), while falling sharply, still remains firmly above zero – mainly since it excludes mortgage interest payments. It is tipped to stand at about 2.7 per cent in today’s figures. 

While unions do not want to support pay cuts, they are proving increasingly willing to negotiate them in return for pledges on no compulsory job losses. Jim D’Avila, regional officer for the Unite union at Honda’s base in Swindon, said: “Honda is following Toyota’s lead. In return for no compulsory redundancies the company is asking the staff to accept cuts in pay. 

“No decision has been made. Unite’s priority is to secure jobs and give our members a fighting chance of coming through this economic turmoil with their jobs and livelihoods intact.” 

WINNERS AND LOSERS 

— The biggest losers are easily identified. About 180,000 people have annuities linked to the retail prices index, according to the Association of British Insurers, and many of the providers of these, including big names such as AXA, Prudential and Standard Life, will automatically cut the income received on them in the event of deflation. Other providers, such as Norwich Union and Legal & General, have stated that payments will not fall but merely remain unchanged until the retail prices index begins rising again 

— Savers whose rates are linked to the RPI also lose out, such as those who have bought products from National Savings & Investments 

— Among the winners are people who have bought gilts — government IOUs — as these pay a fixed rate of interest, which is worth more when prices are falling 

— Although it may not feel like it, anyone with money in the bank will be a winner. If prices are going into reverse, any bank account paying interest, however modest, is worth having 

— Similarly, most people on state pensions can be regarded as winners. State pensions increase at the start of the tax year in line with where the RPI stood the previous September. Because the RPI was 5 per cent last September, it means that the weekly pension rises on April 6 from £90.70 to £95.24. In practice, the relative spending power of the state pension will vary according to each pensioner's personal rate of inflation, which — depending on council tax bills, for example — may exceed 5 per cent. If deflation continues until this September, pensioners will still get an increase, as the Government has pledged that state pensions will never rise by less than 2.5 per cent a year 

— Some businesses will also benefit, again depending on their individual levels of deflation. If the costs of a business fall, then even if it is not raising prices for its customers, its margins will be improving. In reality, deflation is likely to hurt many businesses, as their costs are rising because of the collapse of sterling

quoted from: Times Online

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Dubai World Unit Sues MGM Mirage

DUBAI - Dubai World subsidiary Infinity World is suing Las Vegas-based casino operator MGM Mirage for breach of contract over their $8.6-billion CityCenter joint-venture, amid mounting concerns about the US project’s viability. 


The lawsuit, filed in the Delaware state Chancery Court in the US, aimed “to protect its rights and the best interests of the CityCenter project,” Dubai World said Monday.

MGM Mirage is burdened with more than $13 billion in debts related to CityCenter, its largest private development in the US so far.

MGM Mirage spokesperson Yvette Monet said she had no immediate comment on the lawsuit, when contacted at her Las Vegas office by Khaleej Times . 

Dubai World said that MGM’s recent disclosure to the US Securities and Exchange Commission — in which MGM said it doubted CityCenter’s viability as a going concern — constitutes a breach of contract.

In its lawsuit, Infinity World said it sought “declaratory relief from obligations under the joint venture agreement as a result of MGM’s breach.”

In its 10-k filing with the SEC, MGM said it “cannot provide assurance” that its business would generate sufficient cash flow from its operations, nor that it would be able to borrow enough money under its senior credit facility to pay off its debts or fund its other needs.  

CityCenter is a mixed-use luxury residential, resort and retail complex being developed by MGM on 67 acres between the Bellagio and Monte Carlo resorts on the Las Vegas Strip. It is owned by CityCenter Holdings LLC, the joint venture company owned equally by MGM and Infinity World. The complex, which started construction in 2005, is scheduled to open late this year. 

Dubai World said MGM’s admission that it cannot guarantee its ability to meet its future payments for CityCenter left the company with no option but to file the lawsuit.

“The current path of the project is simply unsustainable given our partner’s financial troubles, “ Dubai World said.

Dubai World also accused MGM of mismanaging CityCenter, with costs exceeding budgets despite a downsizing of some of the planned facilities.  

As a result, Infinity World was forced to make capital contributions far in excess of the levels that MGM had originally estimated.  

MGM said in August 2007 that CityCenter would cost an estimated $7.49 billion, but its costs have risen to about $8.8 billion. MGM anticipated being able to borrow $5 billion, revised that amount to $3 billion, and ultimately raised only $1.8 billion. Infinity World’s contributions to CityCenter to date total about $4.3 billion, Dubai World said. In its 10-K filing with the SEC, MGM said it obtained from its senior lenders a waiver of financial covenants that will expire on May 15. MGM’s lenders can then declare the company to be in default.

quoted from: Khaleej Times

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Tata Nano to Hit Roads in July

MUMBAI - The Tata Motors Nano, the world's cheapest car at around $2,000, will hit Indian roads in July and, with demand set to far outstrip supply, the first 100,000 owners will be picked at random. 



Hundreds of thousands are expected to put their name down for a Nano, including many previously limited to motorbikes or public transport, following Monday's formal launch.

'We are at the gates offering a new form of transportation to the people of India, and later I hope other markets as well,' Chairman Ratan Tata told reporters.

Launching six months behind schedule and with production in the first year severely constrained, it will take over a year to deliver the first 100,000 Nanos to an otherwise subdued market.

'From the drawing board to its commercial launch, the car has overcome several challenges. I hope it will provide safe, affordable four-wheel transportation to families who till now have not been able to own a car,' Ratan Tata said.

Since the Nano was first shown, its main production plant had to be moved following land protests, the company posted its first loss in seven years, its shares have dropped 70 percent and its credit rating been downgraded with the threat of further downgrades remaining.

The first 100,000 Nano owners will be randomly picked from bookings made April 9-25, and their prices will be guaranteed, said Tata, who more than a year ago promised a 100,000 rupee ($1,980) dealer price at a glitzy unveiling.

The basic version, excluding taxes, will still be 100,000 rupees. But once taxes and dealers charges are included, the Nano will be in showrooms for 112,735 rupees in some parts of India, while top-end models with air conditioning and other extras will cost close to 200,000 rupees.

A European variant will be launched by 2011, and the company is also looking at the United States as the economic situation has made low-cost cars even more attractive, Tata said.

'This was never conceived as the cheapest car, but as providing transport to those people who never owned a car.

'Driven mainly by the change in demand that we see elsewhere in the world, we suddenly felt we had a product that could be of considerable interest as a low-cost product in western Europe, eastern Europe, the UK and even the U.S.,' Tata said.  


STUPENDOUS RESPONSE

The Nano can be booked at more than 30,000 locations in 1,000 cities across India, including Tata's department and electronics stores, with booking forms costing 300 rupees. It can also be booked online (www.tatanano.com).

Bookings will need a downpayment very close to the full price, managing director Ravi Kant said. 'We have had a stupendous response so far, breaking all class and other barriers'.

Those bookings could help the firm battle falling sales of commercial vehicles, its mainstay, and help repay $2 billion of bridge loans due in June and taken out for the acquisition of Jaguar and Land Rover last year.

While the cost of raw materials such as steel has changed a lot since the Nano was first proposed, and even since its unveiling, the company decided to hold the price for the first 100,000 cars and expects it to be profitable, Tata said.

'It's often asked whether this project is going to be an act of philanthropy, which I assure you it will not,' Tata said.

Analysts said Tata may raise prices soon, but slim margins, initial capacity constraints and muted market sentiment mean that breakeven on the project will take 5-6 years.

'Scaling-up challenges are expected to be humungous,' CRISIL Research said in a note, adding volumes of 200,000-500,000 units were needed in the medium term for the project to be viable.

Tata can currently produce about 60,000 Nanos a year until a 250,000-unit plant in Gujarat state comes onstream by end-2009.  

 PRICE CORRECTION

Competition is not far off: Volkswagen, Toyota, Honda and Fiat are eyeing the segment, and the venture of Renault/Nissan with Bajaj is on track to launch a $2,500 car in 2011.

Meanwhile, Maruti Suzuki and Hyundai Motor, the two biggest carmakers in India, are unlikely to cede ground to the Nano without a fight.

'I would imagine there'd be some reaction from the market. I expect price correction from small-car makers,' Tata said.

quoted from: Khaleej Times

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Thailand's Mab Ta Phut Needs Clear Environmental Standards

SINGAPORE (ICIS news)--Thailand will have to lay down clear environmental standards that petrochemical plants need to adhere to in Mab Ta Phut industrial estate after a court this month declared the area a "pollution control zone", industry officials and analysts said on Friday.

Thailand’s Rayong Administrative Court declared Mab Ta Phut -- major production site for chemical giants such as PTT Group and the Siam Cement Group (SCG) -- a pollution control area in the first week of March. However, the court or the government has yet to specify environmental standards that the companies must follow.

The Petrochemical Industry Club, an arm of Federation of Thai Industries, has urged the government to carefully consider the court’s ruling because investor confidence could be adversely affected by the decision.

“A panel of experts will now be formed to study the effects of the ruling in-depth," said Adisak Nobthai, board secretary for the Petrochemical Industry Club. "And (they) will submit a report as soon as it is completed," he told ICIS news. 

The panel, a collaboration between the Petrochemical Industry Club and the Petroleum Institute of Thailand, another arm of the Federation of Thai Industries, is set to meet next week, Nobthai added.

The Federation of Thai Industries has estimated that up to Baht (Bt)288bn ($8.05bn) in petrochemical investments could be at risk if rules and standards were not clear.

The ruling by the Rayong Administrative Court was in response to petition filed by health and pollution control officials who said area residents were at risk from pollution or from any industrial-waste related accident

“There remain uncertainties over the new rules,” said Naphat Chantaraserekul, a senior investment analyst at brokerage firm, Kim Eng Securities, 

“We believe that if new rules are in line with international standards, they should not affect PTT’s 7th gas separation plant and phase II petrochemical project,” Chantaraserekul said. “But if [the] new rules are stricter, they might have to invest more,” he added.

However, market sources said different standards would have different impact on each industry.

An official of the PTT affiliate, PTT Aromatics and Refining (PTTAR), said the company was in full compliance with Thai Environmental Regulations and it regularly reported its emission levels to the relevant government agencies.

“Furthermore, all of our projects are Environmental Impact Assessment (EIA) approved. All the environmental impact has been evaluated and appropriate mitigation measures and monitoring program have been implemented,” said Panugorn Puengpradit, investor relations manager at PTTAR.

Sirima Dissara, an analyst with brokerage house KGI securities, said the current plants operated by the Siam Cement Group adhere to emission standards set by the European Union (EU), which are generally regarded as the most stringent levels.

“SCG does not expect to invest more based on the current standards,” she said.

SCG has four ongoing joint venture projects in Mab Ta Phut with US major Dow chemical, estimated at Bt53.7bn.

quoted from: www.ICIS.com

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Unemployment Likely Rose Again

The unemployment rate was expected to have climbed last month despite recent rallies in the local stock market and currency prices and rush orders from China, analysts said on Friday.

Economic recovery is unlikely as long as unemployment remains high in the US and Europe, damping demand for Taiwanese consumer electronic products, they said.

Kevin Hsiao (蕭正義), head of UBS Wealth Management Research in Taiwan, said unemployment almost certainly went up last month and may have topped the 5.37 percent recorded in December 2001, the worst of the last recession.

“Market consensus puts the unemployment rate at 5.6 percent for last month,” Hsiao said by telephone. “That’s a fair forecast. The upward trend is likely to persist in the first half, though the pace may slow down a little.” 

Unemployment was 5.31 percent in January and reached 5.33 percent after seasonal adjustment, the Directorate-General of Budget, Accounting and Statistics reported on Feb. 26.

The statistics agency said the employment situation would deteriorate sharply last month after companies terminated short-term jobs created for the Lunar New Year holiday. The agency will release last month’s figures today.

Several high-tech companies have recently obtained rush orders, which have helped ease the pressure to ask employees to take unpaid leave and improve factory utilization.

Earlier this month, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chip maker, raised its first-quarter revenue and margin forecasts, mainly because of rush orders. The company announced on Friday it was ending its unpaid leave policy, starting on April 1.

On Thursday, AU Optronics Corp (友達光電), the world’s third-largest liquid-crystal-display maker, said its utilization rate had improved and reached the higher end of its mid-50 percent target range, also thanks to rush orders. 

However, Hsiao said rush orders would provide no relief for the overall unemployment situation.

“Companies will not hire new workers unless they’re sure we’re seeing an economic recovery,” he said. “That will not happen in the coming months.”

Despite the government’s job-creation program, the unemployed population reached 578,000 in January, the highest since the agency began keeping statistics in 1978.

Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup Inc Taiwan, forecast unemployment last month will have risen 0.2 percentage points to 5.5 percent.

Cheng said that while the manufacturing sector reported modest improvement in production thanks to rush orders, the service sector remained hard hit by slumping demand, with some companies shutting down.

“The labor pool would have been smaller if the government had not introduced short-term jobs,” Cheng said by telephone. “Not all companies benefit from the rush orders and it is too early to assess their impact.”

While Citigroup said unemployment would climb to 6 percent in the middle of this year, Cheng said the worst of the economic downturn was likely behind us in light of a slowing decline in exports.

Still, he said, full recovery will only occur in the long-term. 

Exports fell 37.2 percent in the first two months of the year from the same period last year, compared with a 41.9 percent drop in December from the previous year, Ministry of Finance statistics showed. 

Standard Chartered Bank chief economist Tony Phoo (符銘財) said the number of people without jobs would not drop unless companies increased capital spending.

Phoo said he had yet to see positive signs in the US or Europe, both of which are major consumers of electronics. 

Phoo joined other observers in saying that the recent wave of rush orders would result in short-term inventory restocking, but was not a sign of recovery in demand. 

“It would be naive to pin hopes of recovery on inventory building, a process that is different from sustained demand,” he said.

quoted from: Taipei Times

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IMF Expects World Economy to Shrink

The International Monetary Fund has predicted the global economy will shrink by as much as 1.5 per cent this year - its first contraction since World War II.

Attributing much of the problem to "toxic assets" on banks' balance sheets, two reports made public on Thursday urged world government to act swiftly to deal with them.

The IMF reports were prepared for last week's G20 meeting, a gathering of the world's largest economies. The IMF said G20 countries should develop plans to cope with failing financial institutions before the broader economy is infected.

"Even in countries where banking sectors still appear resilient, the deepening global financial crisis is likely to imply greater stresses," it said.

Japan is expected to be hit hardest in 2009, with an expected economic contraction of nearly six per cent, the IMF said.

The euro zone is expected to decline by more than 3 per cent, while the US economy is forecast to shrink by more than 2.5 per cent.

Public outrage

From Washington to Paris, public anger over the economic crisis has been growing.

More than one million people turned out on the streets of Paris on Thursday to voice their frustration at the French government's reaction to the crisis.

France's national statistics agency says its economy is shrinking at its fastest rate in 30 years, and unemployment is expected to hit nearly 10 per cent this year.

The IMF has forecast gradual economic recovery for the world in 2010 to around zero growth, but added that a further cut its projections may be necessary if the crisis intensifies.

Discussion of the IMF reports is expected in London on April 2, when finance ministers of G20 countries will meet world leaders for another round of talks.

quoted from: Ajazeera.Net

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Shell Goes to Paradise in Search of Cheap Biofuel

The Hawaiian island of Kona, a volcanic stump with white sand beaches and aquamarine waters in the middle of the Pacific, has long drawn adventurers and paradise-seekers. It was here that Captain James Cook was stabbed by islanders and left to die face down in the surf. 

More than two centuries on, new pioneers are stalking its shores. Last week a small company backed by the oil giant Royal Dutch Shell provided the first batch of a locally made oil to the American government for testing as aviation fuel. It has the combustion properties of fuel derived from crude oil but it is made from algae. 

The advantages over conventional biofuels are clear – it is not made from crops grown on agricultural land so it cannot be blamed for driving up food prices or using scarce fresh water. 

It sounds almost too good to be true. It probably is. The technology to convert algae into usable fuel on a large scale is still at least a decade away, and it is unclear if it will ever be practical on a large scale. 

Shell refuses to say how much it has invested in the project. Nonetheless, it has put the full weight of its PR machine behind this and the handful of other renewable technologies it is developing, giving it a nice green sheen even as it deepens its involvement in controversial areas such as the Canadian tar sands. 

The company has had to deal with a $100 drop in the price of oil and lower demand for its products, so it is cutting spending and has pulled out of several renewables sectors altogether. Chief executive Jeroen van der Veer confirmed last week that the company will stop investing in hydrogen technologies and wind power – it has pulled out of all its British projects in the past year. Solar has gone the same way. That leaves clean coal technology and “second generation” biofuels such as algae as its primary focus. 

The fast-growing algae are native to the seas off Hawaii – cultured in tanks fed with sea-water in a pilot plant run in collaboration with the local firm HR Biopetroleum. If its scientists can perfect the algae-to-oil process, Shell says it will fund an industrial facility of 20,000 hectares, built by Cellana, the Shell-HR Biopetroleum joint venture, on coastal land unsuitable for farming. 

A facility of that size could produce 16,000 barrels of oil equivalent a day. At that rate, seven such plants would be needed to generate as much oil as one reasonably productive offshore platform. The good news is that algae can double their mass several times a day using sunlight alone and the supply would never run dry. 

On the Kona coast, Cellana has already built some photo-bioreactors – essentially high-tech greenhouses that use natural light and a carbon-dioxide injection system to speed up natural growth rates. The company is testing new strains of the plant to find the most oil-rich and fast-growing varieties. The conversion process is similar to that for other biofuels: the algae are dried and broken down into oil and protein. 

The process is still in development. Gordon MacManus, an analyst at the research firm Wood Mackenzie, said that, as a biofuel source, algae hold great potential but the technology is at a “very early stage”. He said that it could be “more than a decade” before it is commercially practical. 

It is one of several “second-generation” biofuels that could one day overtake Shell’s other efforts in making biofuels from crops. It has recently increased its stake in Codexis, an American group that develops enzymes to improve the process of creating ethanol from lignocellulose, the woody part of plants, that another Shell partner Iogen is working on. 

Such fuels are many years from making it to the market – if, indeed, they make it at all. And Shell leaves most of the scientific challenges to its partner organisations; it provides the cash and research support. Meanwhile, the company remains one of the world’s biggest providers of often-ma-ligned “first generation” biofuels such as corn-based ethanol. 

Just as the first drum of algae-produced oil was flown from Kona to America’s Defense Advanced Research Projects Agency, Shell said that it was abandoning renewables, except for some biofuels. 

When the announcement was made last Tuesday, critics accused Shell of a sell-out. But the company said it was responding to a change in the economic climate and the new reality that crude oil is now about $100 a barrel cheaper than a year ago. 

Shell was never that green in the first place. It has the largest investment programme of any private enterprise in the world, spending $90 billion (£62 billion) in the past five years on projects ranging from the Gulf of Mexico to Iraq. Over that same period it gave back $68 billion to shareholders through dividends and share buybacks. 

By comparison, its investment in alternative energy is tiny, amounting to only $1.7 billion – less than 2% of its total spending over the same five years. That investment programme is about to dwindle further. Van der Veer’s message last week was straightforward: it’s not that renewables don’t make money, it’s that they don’t make enough. “We do not expect [renewables] to grow much from here, due to portfolio fit and the returns outlook compared with other opportunities,” he said. 

Far from abandoning renewables, Shell said, it is simply narrowing its focus on the areas where it has the most expertise and can effect the most change. 

Environmentalists fear that Shell’s efforts to go green could end up like Captain Cook on the shores of Kona – left to die in the surf.

quoted from: Times Online

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US PE Sentiment Mixed on Weak Demand, Rising Energy Prices

HOUSTON (ICIS news)--US polyethylene (PE) buyers on Friday said increasing feedstock supply and soft demand would undercut prices next month, while producers said firming energy prices would provide support.

PE prices in the US were flat or slightly down this month as resin demand showed little improvement from February and feedstock supply increased with several cracker restarts, buyers said.

Large-volume buyers said they had not yet seen any decrease in March, but they expected PE to drop in April.

Producers had proposed a 5 cent/lb ($110/tonne or €80/tonne) increase for March, but buyers and sellers said the increase was postponed at least until April.

A producer said it had not lowered prices domestically, preferring instead to slow down operations and export to a resurgent market in Asia. 

The source was not seeing lower priced offers from competitors either.

A high density PE (HDPE) blow moulding converter said distributors were working harder to push inventory out of warehouses, a signal that prices could be turning around after increasing in January and February.

HDPE was being offered at 36-40 cents/lb DEL (delivered) for spot domestic railcars, several mid- to large-volume buyers said.

Bagged HDPE blow moulding for export was at 35-37 cents/lb FOB (free on board) US Gulf, according to sellers and traders, about 2 cents lower compared with the previous week.

Major US PE producers include Dow Chemical, ExxonMobil, Formosa, Chevron Phillips Chemical, Total and LyondellBasell.

quoted from: www.ICIS.com

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World's Cheapest Car Goes on Sale

Tata Motors said it will launch its ultra-cheap Nano car in Mumbai today - a vehicle meant to herald a revolution by making it possible for the world's poor to purchase their first car.

But few predict the snub-nosed Nano will be able to turn around the company, which has been beset by flagging sales and high debt, anytime soon.


In this Jan. 11, 2009 file photo, Tata's Nano car is seen in an exhibition during the fourth Vibrant Gujarat Global Investors Summit in Ahmadabad, India. [Agencies]


The Nano, which is priced starting at about 100,000 rupees ($2,050), is a stripped-down car for stripped-down times: It is 3.1 meters long, has one windshield wiper, a 623cc rear engine, and a diminutive trunk, according to the company's website.

It does not have air bags or antilock brakes - neither of which is required in India - and if you want air conditioning, a radio, or power steering, you'll have to pay extra.

Tata Motors has been hard-hit by the global downturn. Commercial vehicle sales, its core business, have been decimated as India's growth slows, and consumers have had trouble getting affordable car loans.

The company declared a loss of 2.63 billion rupees ($54 million) for the October to December quarter, and it has been struggling to refinance the remaining $2 billion of a $3 billion loan it took to buy the Jaguar and Land Rover brands from Ford Motor Co in June.

Even the launch of the Nano has been scaled back.

The car is arriving six months late because of violent protests by farmers and opposition political party leaders over land, which forced Tata to move its Nano factory from West Bengal to the business-friendly state of Gujarat.

Company officials have said it will take at least a year to complete the new factory, and until then, Tata will only be able to produce a limited number of Nanos from its other car plants in India.

Tata Motors hasn't yet given details on production volumes, but most analysts doubt the company will be able to make more than about 50,000 cars in the next year - a far cry from the 250,000 the company had planned to roll out initially.

Vaishali Jajoo, auto analyst at Mumbai's Angel Broking, said even if Tata Motors manages to sell 250,000 Nanos a year, it will only add 3 percent to the company's total revenues.



"That doesn't make a significant difference to the top line. And for the bottom line, it will take five to six years to break even," Jajoo said.

Still, in this new age of global thrift, the Nano sounds appealing to more than just the struggling farmers and petty businessmen across India that Tata initially had in mind for the car.

"What do you think the chances are that the Nano will come to America? Personally, I'd love one," Steven Smith, whose first car was a Volkswagen Dune Buggy, wrote recently on the Nano Facebook page.

Tata Motors unveiled the Tata Nano Europa, a slightly more robust version of the Indian model, at the Geneva Motor Show this month, with a planned launch of 2011. But the company has no plans to take the Nano to America anytime soon

quoted from: China Daily

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Barack Obama Appeals to the ‘Good Guys’ of Wall Street in $1 Trillion Rescue

Barack Obama’s Administration will announce its latest economic rescue plan today by offering private investors vast government-backed loans to buy as much as $1 trillion of toxic assets from America’s stricken banks. 

The scheme, designed to help unfreeze the flow of credit for consumers, will be an important credibility test for Treasury Secretary Tim Geithner, who has cut an increasingly forlorn and embattled figure in recent weeks. 

It will also turn the spotlight once more on Wall Street financiers, repeatedly castigated for helping to create the crisis, but whose participation and expertise are now needed to make the plan work. 

Doubts are already surfacing about whether investors will risk being exposed to public shame and the vicissitudes of politics after last week’s furore — fuelled by both the White House and Congress — over AIG’s payment of $165 million (£114 million) in bonuses. 
 

Reflecting a wave of intense popular anger, the House of Representatives last week voted for a special tax of 90 per cent on bonuses for employees at the failed insurance giant, which has received $170 billion in bailout money, and other companies owing their existence to federal funds. 

Vikram Pandit, the chief executive of Citigroup, is among the bankers who have warned that efforts to stabilise the financial system would be “significantly set back” by the imposition of such a retrospective and penal tax. Administration officials have privately expressed concerns that it could lead to an exodus of employees or whole companies from federally funded programmes. 

White House officials, however, have sought to take some of the heat out of the row by indicating that Mr Obama is unlikely to sign such legislation and promising that he will not “govern out of frustration”. 

At the start of another crucial week for the Administration, Austan Goolsbee, a senior aide, said yesterday: “We can’t let our anger over mistakes that happened last year block the fact that we’ve got to save the economy — we have to fix this problem.” 

Christina Romer, the chairman of the White House council of economic advisers, said: “The President understands the distinction between placing restrictions on companies that contributed to the financial mess and those trying to help.” Companies that participated in the scheme would be “kind of doing us a favour” and would be regarded as “the good guys here”. 

Ms Romer confirmed that the taxpayer would bear the bulk of the risk for hedge funds and other private companies being invited to take part in the plan to clean up banks’ books so they can start lending again. Investors would be asked to contribute only a small fraction of the equity but to bid for the banks’ toxic assets with government-financed low-interest loans and a promise that the taxpayer would share risks if the value of assets, often related to the housing market, fell further. 

The Treasury plans to contribute about $100 billion from what is left of the $700 billion bailout programme for financial institutions, as well as other resources from the Federal Reserve and the Federal Deposit Insurance Corporation. 

Officials have played down a report yesterday in The New York Times that Mr Geithner plans to introduce a programme of financial regulation that would increase federal oversight of executive pay at all banks. They indicated that there was no plan to cap salaries or eliminate the much-criticised Securities and Exchange Commission or to merge that agency with other financial regulators, as some experts had predicted. 

The US is under pressure from countries such as France and Germany to agree much tighter regulation of hedge funds and other institutions at the G20 summit in London on April 2. 

Mr Geithner will hope that he does better with today’s announcement than when he first outlined the proposals on February 10, a performance which prompted the Dow Jones industrial average to plunge by 380 points even as he was speaking. 

Last week Mr Geithner was similarly unconvincing as he faced questions about what he knew of the AIG bonuses when he authorised another $30 billion bailout of the company. 

Richard Shelby, the top Republican on the Senate Banking Committee, said that his confidence in Mr Geithner was “waning every day”. He added: “If he keeps going down this road, I think that he won’t last long.” 

The Obama Administration’s big spending is coming under ferocious criticism from Republicans who have highlighted a report from the independent Congressional Budget Office forecasting that the US deficit could hit $1.845 trillion this year — four times the 2008 record and significantly worse than the Treasury’s own predictions. 

Senator Judd Gregg, who was once lined up to be Mr Obama’s Commerce Secretary, said: “The practical implications of this is bankruptcy for the United States. There’s no other way around it. And I find it almost unconscionable that this Administration is essentially saying, ‘Well, we’re just going to blithely go along on this course of action’ after they’re getting these numbers.” 

Mr Obama used an interview with 60 Minutes on CBS last night to insist that Mr Geithner had his full support. Even if the Treasury Secretary offered to resign, he said that his response would be: “Sorry buddy, you’ve still got the job.”

quoted from: Times Online

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Tokyo Motor Show Loses Cast of Star Performers

A wave of defections by some of the world's biggest automakers has soured preparations for this year's Tokyo Motor Show and forced organizers into a fruitless search for new participants. 

For the first time, the "Big Three" U.S. automakers--General Motors Corp., Ford Motor Co. and Chrysler Corp.--have all declined to take part in the event to save money and focus on riding out the global economic crisis. Four Japanese manufacturers have also elected not to participate. 

In recent months, plummeting sales have battered the auto industry, forcing many of the biggest makers to shed thousands of jobs and limit their appearances in motor shows strictly to countries they consider essential to their business plans. 

The Japan Automobile Manufacturers Association (JAMA) held the first Tokyo Motor Show in 1954. More recently it has staged the event, one of the five biggest motor shows in the world, every two years. This year it will hold the event in Makuhari Messe event hall in Chiba from Oct. 24 through Nov. 8. 

"We're in the midst of a management crisis," said an official of the Japanese arm of General Motors. "If we wanted to take part (in the show), we'd have to spend several hundreds of millions of yen. What we should be doing now is concentrating on selling as many cars as possible and boosting profits." 

Among Japanese commercial vehicle manufacturers, Isuzu Motors Ltd., Hino Motors Ltd., Mitsubishi Fuso Truck and Bus Corp. and Nissan Diesel Motor Co. have all opted not to participate in the show to save money. 

After the sudden escalation in the financial crisis last September, which forced several companies to drop out of this year's show, JAMA turned for the first time to automakers in China and India. None were interested. 

Sales of new cars in Japan have decreased over most of the past 19 years. JAMA estimates they will fall to about 4.86 million units this year--the first time in 31 years that the figure has sunk below 5 million. The figure is also about 40 percent below the peak of 7.77 million, recorded in 1990 at the height of the asset-inflated "bubble" economy. 

Automakers have received the approval of JAMA to use this year's show to promote sales, partly by prioritizing the exhibition of cars already on the market over those still under development. It will also secure wider floor spaces for talks between exhibitors and visitors. 

At its largest, in 1991, the show hosted 336 companies and received more than 2 million visitors. In 2007, however, only 241 companies took part. The number of visitors fell to 1.42 million. 

The downward slide has been attributed to waning enthusiasm for cars among young Japanese. 

To counter this, JAMA will this year increase the categories of people who can enter for free to include junior high school students.(IHT/Asahi: March 16,2009)

quoted from: The Asahi Shimbun

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Japan Promises Extra 3 Trillion Yen to Aid Economy

HORSHAM, England--Finance Minister Kaoru Yosano told U.S. Treasury Secretary Timothy Geithner that Japan would exceed the United States' request to implement stimulus measures equivalent to at least 2 percent of gross domestic product. 

Meeting Geithner here Friday before the opening of the two-day gathering of Group of 20 finance ministers and central bank governors, Yosano said Japan would spend at least 3 trillion yen more to boost the economy. 

To pull the world economy out of the current crisis, the International Monetary Fund has called on each country to take fiscal action equivalent to about 2 percent of its GDP. The United States has made the same request of other countries. 

During the bilateral talk, Yosano assured his U.S. counterpart that Japan would spend 10 trillion yen, accounting for 2 percent of its roughly 500-trillion-yen GDP. 

On the other hand, European countries such as France and Germany have taken a more cautious approach to making such a huge commitment. 

According to a Japanese official, Yosano said to Geithner during their meeting, "It's important that all the countries coordinate their economic measures and make up for demand shortages." 

Geithner agreed with Yosano, according to the official. 

Since last fall, the Japanese government has come up with stimulus measures worth 12 trillion yen. On Friday, Prime Minister Taro Aso instructed the ruling coalition parties to consider additional measures. 

According to IMF estimates, Japan's 2009 public spending on economic pump-priming measures will account for 1.4 percent of the country's GDP. 

To achieve the 2-percent goal that the finance minister has pledged, the government needs to implement additional measures exceeding 3 trillion yen, or 0.6 percent of the country's GDP. 

However, according to the Cabinet Office, Japan's demand deficiency is far more--about 20 trillion yen-- prompting the coalition parties to urge more public spending. 

It remains to be seen how much more the government will spend on economic measures. 

The two top financial officials also stressed during the meeting that in order to shake off the worldwide recession, economic recovery of emerging economies and Asian countries was essential. 

To help these countries take pump-priming measures, Yosano and Geithner agreed the financial base of the IMF and the Asian Development Bank should be strengthened. 

Also during the meeting, Yosano expressed his opposition to tightening regulations governing banks' capital-to-asset ratios--a measure that has been floated by some policymakers in order to maintain the sound financial state of each financial institution. 

"We should give top priority to recovering from the economic and financial crisis. It's obvious that such regulation will lead to a credit crunch." 

The G-20 includes the Group of Seven leading industrialized countries: Britain, Canada, France, Germany, Italy, Japan and the United States; and emerging economies such as the so-called BRICs: Brazil, Russia, India and China. 

The G-20 meeting, which was held in preparation for the G-20 summit in London next month, closed Saturday. 

Yosano, who doubles as state minister in charge of economic and fiscal policy, inherited the finance minister post last month from Shoichi Nakagawa, who resigned after appearing to be drunk at a news conference in Rome.(IHT/Asahi: March 16,2009)

quoted from: The Asahi Shimbun

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Asian Markets Mixed on Worries about US Inflation

HONG KONG – Asian stock markets were mixed on Friday as investors turned cautious amid worries the U.S. Federal Reserve’s latest move to combat recession in the world’s largest economy will lead to rampant inflation. 


Trade was lackluster in most markets, with Tokyo closed for a holiday, as the region closed out one of its strongest weeks this year with a whimper.

Sentiment took a hit after Wall Street’s rally petered out Thursday. In the U.S., investor euphoria over the central bank’s aggressive $1.2 trillion plan to buy government bonds and debt securities gave way to fears the new spending would stoke inflation long term.

Those concerns have pummeled the dollar, which stabilized in Asia but was still headed for a 4 percent loss against the yen this week. That hurts Japan’s big exporters by eroding their foreign income.

While the market may see more upside, continuing woes in the financial system would likely lead to more selling in the weeks ahead, analysts said.

“I don’t think anyone reasonably expects this to be a long-term rally or that we’ve hit bottom,” said Andrew Orchard, Asian strategist for Royal Bank of Scotland in Hong Kong. “The problems with the financial system are still unknown.”

Hong Kong’s Hang Seng Index fell 207.85 points, or 1.6 percent, to 12,923.07, and Australia’s benchmark S&P/ASX 200 stock index declined 0.4 percent to 3,465.8.

Stocks in mainland China rose for a fifth day, with the Shanghai Composite advancing 0.5 percent to 2,277.89. South Korea’s Kospi climbed 0.8 percent to 1,171.04. Trading will reopen in Tokyo on Monday.

Markets in the Philippines and Thailand also rose.

Overnight in the New York, banking and other financial shares dragged on the broader market, and the major indexes finished down. The Dow Jones industrial average fell 85.78, or 1.2 percent, to 7,400.80.

The broader Standard & Poor’s 500 index fell 10.31, or 1.3 percent, to 784.04, while Nasdaq composite index fell 7.74, or 0.5 percent, to 1,483.48.

U.S. futures pointed to more losses on Wall Street. Dow futures were down 63 points, or 0.9 percent, to 7,348, while S&P 500 futures were down 7.4 points, or 1 percent to 772.7.

The dollar recovered some after tumbling overnight, gaining to 94.62 yen from 94.53 yen earlier — but down from nearly 99 yen two days ago. The euro was lower at $1.3652 from $1.3660.

Oil prices eased after surging overnight on a weakened dollar and evidence that OPEC has significantly slowed production. Benchmark crude for April delivery was down 49 cents at $51.12.

quoted from: Khaleej Times

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UAE Economy may Contract if Global Crisis Worsens: Mansouri

DUBAI - The UAE economy could shrink during the second half of the year if the global downturn intensifies, the Minister of Economy said on Thursday. 


The outlook expressed by Sultan bin Saeed Al Mansouri marked a turnaround from past statements by government officials. As recently as February, Central Bank Governor Sultan bin Nasser Al Suwaidi said he expected the UAE to see “low single-digit” growth in 2009.  

Countries in the Gulf region have been reluctant to concede that their economies, which boomed during a six-year rally in crude oil prices, could contract as demand for petroleum slumps. The UAE is the world’s fifth-biggest exporter of oil and last year generated 48 per cent of its gross domestic product from shipments of crude.

“There could be some contraction... it depends on what happens in the world economy as a whole in the second half …,’’ said the minister, Sultan bin Saeed Al Mansouri, speaking at a news conference in Dubai. “I’d like to be conservative and say that the UAE will be affected by the slowdown in the world economy.”

However, he added that the government is “ready to address any kind of issues with regards to liquidity that may affect the economy of the UAE.”

Dubai has suffered a sharp downturn in its property market -- a pillar of the local economy – and the emirate, together with federal help, is trying to buttress real estate companies hit hard by tumbling prices for offices and homes. In one such effort, Al Mansouri ruled out the possibility that the government would close down Dubai’s two largest mortgage lenders – Amlak Finance and Tamweel. 

“There are some options under consideration but these lenders will not be liquidated,” the minister said at Thursday’s conference. “A merger of the two mortgage providers will be a good option.”

The federal government took these two lenders under its control in November, after they suspended new home loans due to their mounting debts and cancellations of new projects. Officials set up a committee last month to decide whether to merge, liquidate or restructure Amlak and Tamweel. The committee completed its review merger on March 10 and submitted its report to the cabinet.

“It is the government’s responsibility to make sure that no entities, whether it is Amlak, Tamweel or others, can be affected by this kind of crisis,” Al Mansouri said. “No big companies have requested extra liquidity until now.”  

Dubai announced a $20 billion bond programme in February; the federal government bought half of them. Dubai officials have said the proceeds from the sale of these bonds will help government-affiliated companies, including property firms.

On Sunday, President His Highness Shaikh Khalifa bin Zayed Al Nahyan dismissed rumours that oil-rich Abu Dhabi would bail out its neighbouring emirate Dubai only on the condition that it gained control of some of Dubai’s major assets. His expression of explicit support for Dubai reassured investors and buoyed the nation’s stock markets.

Al Mansouri, the economy minister, stressed in his comments to reporters that the UAE would probably be less affected by the global recession than other parts of the world. 

Still, oil prices are a key determinant of the UAE’s economic health. The nation’s yearly nominal gross domestic product grew by an estimated 9.4 per cent in 2006, 7.4 per cent in 2007 and an estimated 6.4 per cent in 2008. Oil accounted for more than 40 per cent of the country’s GDP in each of these three years. Crude oil prices peaked at $147 per barrel last July. Crude futures trading on Wednesday on the New York Mercantile Exchange closed at $48.14 a barrel.

quoted from: Khaleej Times

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S Korea plans $3.5bn Jobs Push

South Korea's government has announced plans to spend nearly $3.5bn to create new jobs as the global financial crisis bites deeper into Asia's fourth largest economy.

The government is hoping the move will create work for more than half a million people, in the face of worsening jobs losses.

Data released on Wednesday showed the country shed more than 142,000 jobs in February over a year earlier, the most in five years.

The latest announcement on Thursday, which is expected to create 550,000 jobs, came as the country's economy faces its first recession in more than a decade.

"The government will address risks in job markets through an extra budget for jobs and more job sharing programmes," the prime minister's office said in a statement, following the decision reached at a special high-level meeting on the economic crisis.

Supplementary budget

The money will come from a supplementary budget of about 30 trillion won ($22bn) the government is expected to put before parliament next week.

Of the total, 4.9 trillion won ($3.48bn) will be used on support measures to pror up the job market including creating temporary jobs.

The budget for claims arising from job cuts will also be expanded by 1.6 trillion won ($1.15bn) in response to soaring unemployment.

According to the government the unemployment rate in February rose to 3.9 per cent, the highest in almost four years.

The South Korean finance ministry has forecast the export-reliant economy will shed an average of 200,000 jobs each month from year-earlier levels.

The country's export-driven economy is teetering on the edge of its first recession since 1998, with demand for cars and consumer goods plunging sharply.

quoted from: Al Jazeera.net

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US Economy Gets $1.2 Trillion Boost

The US Federal Reserve has moved to pump $1.2 trillion into the country's financial system, hoping to spur lending to beat the recession.

Concluding a two-day policy meeting on Wednesday, the central bank said it would buy up to $300bn in longer-term government bonds called treasuries to bring down borrowing costs.

The surprising move to buy its own government's debt for the first time since the 1960s sparked a rally on Wall Street, with the Dow Jones industrial average, which had been down earlier in the day, rising to close 1.2 per cent higher at 7,486.58.

"Although the near-term economic outlook is weak, the committee anticipates that policy actions ... will contribute to a gradual resumption of sustainable economic growth," the Federal Reserve said on Wednesday.

In addition to purchasing treasury debt, the central bank said it would expand by $850bn an existing programme to buy debt and securities issued by mortgage finance agencies to $1.45 trillion, in an effort to lower mortgage rates.

'Dramatic move'

The Fed also sent a strong signal that it would keep interest rates low. It decided to leave overnight interest rates unchanged at the 0 to 0.25 per cent range and said rates would stay low for "an extended period", a stronger pledge than it has offered in recent months.


And it said it would consider expanding another $1 trillion programme that is being rolled out this week that aims to boost the availability of consumer loans for cars, education and credit cards, as well as for small businesses.


The decision to hold rates near zero was widely expected, but the plan to buy government bonds and the size of the injection into the economy was a surprise.

"This is a pretty dramatic move... They are trying to bring down all consumer rates," said James Caron, head of global rates research at Morgan Stanley in New York.

Rick Meckler, the president of Libertyview Capital Management in New York, explained the central bank's move as "an attempt to keep rates low, particularly on the mortgage side, which is seen as critical to a big revival of the housing market".

Having pushed key interest rates to almost zero, the central bank has turned its focus to flooding credit markets with cash in the hope of restarting lending and restoring growth, a policy Ben Bernanke, the Federal Reserve chairman, has dubbed "credit easing".

Cheaper money

Buying government bonds in such huge amounts would usually have the effect of causing bond prices to soar and yields on the bonds to plunge.

And the central bank is hoping that by driving down yields on the debt and making it cheaper to borrow money, it will get credit flowing again and from that, economic growth.

The Fed had hinted in January that it was considering buying government debt but in recent weeks had appeared to back off from the move.

William Dudley, the New York Federal Reserve president, said two weeks ago that buying longer-term government debt was not the most efficient way to ease credit market strains.

But the Bank of England, which like the US Federal Reserve had already lowered its key interest rate to a record low - 0.5 per cent, managed to drive interest rates down last week by buying government bonds, and that success may have factored into the US central bank's decision.

And in a sign that it might just work, government bond prices soared on Wednesday and the yield on the benchmark 10-year treasury note dropped to 2.50 per cent from 3.01 per cent - the biggest daily drop in percentage points since 1981.

Sung Won Sohn, an economist at the Martin Smith School of Business at California State University, said the Federal Reserve's move was "going to help everybody".

"This might help the Fed put Humpty Dumpty back together again."

Inflation fears

But not everyone was cheering, with some warning of long-term inflation with the Fed printing money to buy the bonds.

"It's overtly inflationary and will inflate most assets," said Joseph Arsenio, the managing director at Arsenio Capital Management in California.

Greg Salvaggio, a vice-president for trading at Tempus Consulting in Washington, said the "bottom line is the Fed is adding a trillion dollars to their balance sheet and that's a lot of taxpayer money".

The dollar fell against other major currencies on Wednesday, a possible signal over concerns that the Fed's intervention might spur inflation over the long run.

The Fed has said it is mindful of the risks but said on Wednesday that since it last met in late January, "the economy continues to contract".

"Job losses, declining equity and housing wealth and tight credit conditions have weighed on consumer sentiment and spending," it said in a statement.

Bernanke had said in recent weeks that if credit and financial markets could be stabilised, the recession could end this year, setting the stage for a recovery next year.

But the Fed's statement on Wednesday did not have any specific reference to the likelihood of the recession ending this year, saying instead that the near-term outlook was "weak" and only that stimulus measures should lead to a gradual resumption of growth.

quoted from: Al Jazeera.net

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