Source TheStar
KUALA LUMPUR: The Hindu Rights Action Force (Hindraf) has been banned effective yesterday, said Home Minister Datuk Seri Syed Hamid Albar.
In a statement yesterday, Syed Hamid said the decision to declare Hindraf illegal was made as a result of investigations by the Registrar of Societies (ROS).
“The ministry found the organisation’s activities contravened the Societies Act 1966 and if left unchecked, the organisation could pose a threat to public order, peace, security and morality in Malaysia,” he said, adding that even the sovereignty of the country and prevailing racial harmony would be jeopardised.
He made the declaration based on powers vested under Section 5(1) of the Societies Act.
Syed Hamid said Hindraf had the criteria of an organisation as it had filed an application to register with the ROS on Oct 16 last year.
Despite not getting approval, he said Hindraf had been organising illegal assemblies and inciting hatred among Malays and Indians.
“Hindraf also tried to get the support of foreign countries to pressure the Government to bow to its demands,” he said, adding that all these had affected the country’s image.
Ipoh Barat MP M. Kulasegaran said the decision was ridiculous and uncalled for, adding that he would move an emergency motion asking for an open debate in Parliament today.
“This is against the interest and aspirations of the Indian community that is seeking a more tolerant and fair Government,” he said, adding that Prime Minister Datuk Seri Abdullah Ahmad Badawi had agreed to hold a dialogue with Hindraf leaders but “nothing was done”.
Hindraf national coordinator, R.S. Thanenthiran said the ban was unfair as they had not committed any crime or broken any laws, adding that Syed Hamid could have done this in retaliation to the police reports Hindraf supporters lodged against him.
Thanenthiran said Hindraf chairman P. Waythamoorthy, who is in self-exile in Britain, had instructed coordinators to wait for a day before making further statements.
Coalition of Indian NGOs secretary-general Gunaraj George said that by banning Hindraf, Syed Hamid had rendered the Indian community voiceless, but said it would not dampen the spirit of its supporters.
“I know that their struggle will go on especially to free all those detained under the ISA.”
Governemnt bans Hindraf for contravening Societies Act
Source TheStar
KUALA LUMPUR: The Hindu Rights Action Force (Hindraf) has been banned effective yesterday, said Home Minister Datuk Seri Syed Hamid Albar.
In a statement yesterday, Syed Hamid said the decision to declare Hindraf illegal was made as a result of investigations by the Registrar of Societies (ROS).
“The ministry found the organisation’s activities contravened the Societies Act 1966 and if left unchecked, the organisation could pose a threat to public order, peace, security and morality in Malaysia,” he said, adding that even the sovereignty of the country and prevailing racial harmony would be jeopardised.
He made the declaration based on powers vested under Section 5(1) of the Societies Act.
Syed Hamid said Hindraf had the criteria of an organisation as it had filed an application to register with the ROS on Oct 16 last year.
Despite not getting approval, he said Hindraf had been organising illegal assemblies and inciting hatred among Malays and Indians.
“Hindraf also tried to get the support of foreign countries to pressure the Government to bow to its demands,” he said, adding that all these had affected the country’s image.
Ipoh Barat MP M. Kulasegaran said the decision was ridiculous and uncalled for, adding that he would move an emergency motion asking for an open debate in Parliament today.
“This is against the interest and aspirations of the Indian community that is seeking a more tolerant and fair Government,” he said, adding that Prime Minister Datuk Seri Abdullah Ahmad Badawi had agreed to hold a dialogue with Hindraf leaders but “nothing was done”.
Hindraf national coordinator, R.S. Thanenthiran said the ban was unfair as they had not committed any crime or broken any laws, adding that Syed Hamid could have done this in retaliation to the police reports Hindraf supporters lodged against him.
Thanenthiran said Hindraf chairman P. Waythamoorthy, who is in self-exile in Britain, had instructed coordinators to wait for a day before making further statements.
Coalition of Indian NGOs secretary-general Gunaraj George said that by banning Hindraf, Syed Hamid had rendered the Indian community voiceless, but said it would not dampen the spirit of its supporters.
“I know that their struggle will go on especially to free all those detained under the ISA.”
KUALA LUMPUR: The Hindu Rights Action Force (Hindraf) has been banned effective yesterday, said Home Minister Datuk Seri Syed Hamid Albar.
In a statement yesterday, Syed Hamid said the decision to declare Hindraf illegal was made as a result of investigations by the Registrar of Societies (ROS).
“The ministry found the organisation’s activities contravened the Societies Act 1966 and if left unchecked, the organisation could pose a threat to public order, peace, security and morality in Malaysia,” he said, adding that even the sovereignty of the country and prevailing racial harmony would be jeopardised.
He made the declaration based on powers vested under Section 5(1) of the Societies Act.
Syed Hamid said Hindraf had the criteria of an organisation as it had filed an application to register with the ROS on Oct 16 last year.
Despite not getting approval, he said Hindraf had been organising illegal assemblies and inciting hatred among Malays and Indians.
“Hindraf also tried to get the support of foreign countries to pressure the Government to bow to its demands,” he said, adding that all these had affected the country’s image.
Ipoh Barat MP M. Kulasegaran said the decision was ridiculous and uncalled for, adding that he would move an emergency motion asking for an open debate in Parliament today.
“This is against the interest and aspirations of the Indian community that is seeking a more tolerant and fair Government,” he said, adding that Prime Minister Datuk Seri Abdullah Ahmad Badawi had agreed to hold a dialogue with Hindraf leaders but “nothing was done”.
Hindraf national coordinator, R.S. Thanenthiran said the ban was unfair as they had not committed any crime or broken any laws, adding that Syed Hamid could have done this in retaliation to the police reports Hindraf supporters lodged against him.
Thanenthiran said Hindraf chairman P. Waythamoorthy, who is in self-exile in Britain, had instructed coordinators to wait for a day before making further statements.
Coalition of Indian NGOs secretary-general Gunaraj George said that by banning Hindraf, Syed Hamid had rendered the Indian community voiceless, but said it would not dampen the spirit of its supporters.
“I know that their struggle will go on especially to free all those detained under the ISA.”
Government to relook and shelve some projects
Source TheStar
KUALA LUMPUR: The Government will review and shelve some projects including those in the economic corridors in view of the global economic slowdown, said Datuk Seri Abdullah Ahmad Badawi.
The Prime Minister said the Government would decide which projects should go ahead and which could be put on hold.
“We have made the decision to review the projects once again. We need to postpone some projects which have yet to start construction,” he said at Akademi Kenegaraan’s closing ceremony for the Spirit of Merdeka 2008.
Abdullah said the action was appropriate because these were big projects and involved huge sums of money.
“The review involves all projects including those in the economic corridors. We will implement those we can afford and hold back those which can be postponed,” he said.
He said, however, the country was still drawing in foreign investments, adding that Malaysia’s approach was “targeted investment” from areas with excess funds.
“We have provided good investment opportunities for this country,” he said.
To a question on Malaysia not being able to achieve the same GDP as the previous year due to the global economic slowdown, Abdullah said Malaysia’s economy was resilient and the ringgit stable and it had strong foreign reserves.
He said Malaysia could maintain its exports at a high level and it was enjoying a favourable trade balance and even though the political scenario in the country was active, the nation remained peaceful.
Abdullah said Malaysia has already determined its approach in the present challenging economic times and had strategies to minimise the impact.
“We used to be dependent on the American market but we have now diversified and found markets for our goods in others places like the Asean countries, China and countries other than the United States,” he said.
He also pointed out that Malaysia had a high level of savings and this could help the situation.
“Malaysians can invest inside the country and domestic consumption can drive the economy,” he said, adding that the country’s fundamentals remained strong.
On another matter involving the purported controversial helicopter purchase, Abdullah said he had not received the details of the Eurocopter deal.
“I am calling the Mindef (Defence Ministry) secretary-general about this. I don’t want to cause any confusion,” said Abdullah, who is also Defence Minister.
Earlier this month, Mentari Services Sdn Bhd chairman Capt (Rtd) Zahar Hashim alleged that the tender made during Datuk Seri Najib Tun Razak’s tenure as Defence Minister to replace the aging Nuri helicopters had been too costly.
Capt Zahar claimed the Government could have saved almost RM1.5bil if it had bought the Kazan-M172 helicopters from Kelowna Flightcraft Ltd, the firm he represents, instead of buying Cougar EC-725s from the German-French firm, Eurocopter.
He said the Kazan-M172 met all the specifications required by the armed forces and cost RM898mil while the Cougar units cost the Government RM2.317bil.
KUALA LUMPUR: The Government will review and shelve some projects including those in the economic corridors in view of the global economic slowdown, said Datuk Seri Abdullah Ahmad Badawi.
The Prime Minister said the Government would decide which projects should go ahead and which could be put on hold.
“We have made the decision to review the projects once again. We need to postpone some projects which have yet to start construction,” he said at Akademi Kenegaraan’s closing ceremony for the Spirit of Merdeka 2008.
Abdullah said the action was appropriate because these were big projects and involved huge sums of money.
“The review involves all projects including those in the economic corridors. We will implement those we can afford and hold back those which can be postponed,” he said.
He said, however, the country was still drawing in foreign investments, adding that Malaysia’s approach was “targeted investment” from areas with excess funds.
“We have provided good investment opportunities for this country,” he said.
To a question on Malaysia not being able to achieve the same GDP as the previous year due to the global economic slowdown, Abdullah said Malaysia’s economy was resilient and the ringgit stable and it had strong foreign reserves.
He said Malaysia could maintain its exports at a high level and it was enjoying a favourable trade balance and even though the political scenario in the country was active, the nation remained peaceful.
Abdullah said Malaysia has already determined its approach in the present challenging economic times and had strategies to minimise the impact.
“We used to be dependent on the American market but we have now diversified and found markets for our goods in others places like the Asean countries, China and countries other than the United States,” he said.
He also pointed out that Malaysia had a high level of savings and this could help the situation.
“Malaysians can invest inside the country and domestic consumption can drive the economy,” he said, adding that the country’s fundamentals remained strong.
On another matter involving the purported controversial helicopter purchase, Abdullah said he had not received the details of the Eurocopter deal.
“I am calling the Mindef (Defence Ministry) secretary-general about this. I don’t want to cause any confusion,” said Abdullah, who is also Defence Minister.
Earlier this month, Mentari Services Sdn Bhd chairman Capt (Rtd) Zahar Hashim alleged that the tender made during Datuk Seri Najib Tun Razak’s tenure as Defence Minister to replace the aging Nuri helicopters had been too costly.
Capt Zahar claimed the Government could have saved almost RM1.5bil if it had bought the Kazan-M172 helicopters from Kelowna Flightcraft Ltd, the firm he represents, instead of buying Cougar EC-725s from the German-French firm, Eurocopter.
He said the Kazan-M172 met all the specifications required by the armed forces and cost RM898mil while the Cougar units cost the Government RM2.317bil.
Bernanke says U.S. economy faces big threat
Source Reuters
NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday that turmoil in credit markets poses a "significant threat" to the U.S. economy, suggesting more interest-rate cuts could be coming to help stave off a deep downturn.
Bernanke said it will take some time to restore normal credit flows and pledged the U.S. central bank would continue to act aggressively to fight the crisis. Importantly, he said inflation risks were ebbing, which suggests Fed officials see latitude to lower borrowing costs further.
"By restricting flows of credit to households, businesses, and state and local governments, the turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth," Bernanke told the Economic Club of New York.
"We will continue to use all the tools at our disposal to improve market functioning and liquidity," he said, adding that policy-makers' aggressive and quick response crucially distinguished this episode from the crisis of the 1930s.
U.S. stocks, already down sharply on Wednesday on news of an unexpectedly big drop in September retail sales and weak factory data, sold off even more after the Fed chairman's dour assessment and finished the day with their largest percentage losses since the 1987 crash.
St. Louis Federal Reserve Bank President James Bullard said the sharp 1.2 percent drop in retail sales increased the risk of recession. "The third quarter, I think, will be flat to slightly negative," he told reporters in Little Rock, Arkansas. "That is going to push up the probability that it will later be named a recession.
RATE CUT SEEN
The data contributed to expectations that Fed officials will follow up an emergency interest rate cut made last week with another reduction at their next meeting on October 28-29.
Last week, in concert with central banks around the globe, the Fed cut benchmark rates by a half point to 1.5 percent. It said an intensification of the financial crisis had raised risks to growth, while curbing the risk of inflation.
In the latest bid to restore financial market stability, the U.S. government on Tuesday announced a dramatic plan to recapitalize banks, beginning with a $125 billion equity investment in nine major financial institutions.
But even with the government scrambling to restore credit, Bernanke cautioned it will take time for the economy to heal.
"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," he said.
Analysts said Bernanke's words suggested the Fed chief saw the deteriorating outlook as calling for another rate cut.
"Bernanke's comments ... reinforce the sense that the Fed will lower interest rates when it meets again," said Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co in New York.
FEW BRIGHT SPOTS
A Fed report prepared for the central bank's next meeting added to the gloomy news about the economy.
The Beige Book said economic activity had weakened across the country in recent weeks as businesses revisited capital investment plans, consumers curtailed spending and labor markets softened. The Fed described business contacts as "pessimistic."
In his speech, Bernanke said the housing sector remained the economy's weakest spot, but he also cited "marked slowdowns" in consumer spending, business investment and the labor market.
He added that credit markets would take time to unfreeze and said export sales, until recently a bright spot, were likely to slow as well.
While inflation had been high recently, Bernanke said expectations of future inflation had held steady or eased, import prices were moderating and commodity prices had fallen.
Those factors, along with the softness in the economy, "should lead to rates of inflation more consistent with price stability," he said. "I think the evidence is now in that the inflation problems are moderating and look to be returning to price stability at a reasonable pace."
Boston Fed President Eric Rosengren was more direct.
"One of the characteristics of a recession is in each of these recessions the inflation rate has come down quite dramatically," he told a real estate group in Boston.
"We're in a period when the economy is likely to grow quite slowly. The events of the last couple of weeks certainly aren't going to help.
NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday that turmoil in credit markets poses a "significant threat" to the U.S. economy, suggesting more interest-rate cuts could be coming to help stave off a deep downturn.
Bernanke said it will take some time to restore normal credit flows and pledged the U.S. central bank would continue to act aggressively to fight the crisis. Importantly, he said inflation risks were ebbing, which suggests Fed officials see latitude to lower borrowing costs further.
"By restricting flows of credit to households, businesses, and state and local governments, the turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth," Bernanke told the Economic Club of New York.
"We will continue to use all the tools at our disposal to improve market functioning and liquidity," he said, adding that policy-makers' aggressive and quick response crucially distinguished this episode from the crisis of the 1930s.
U.S. stocks, already down sharply on Wednesday on news of an unexpectedly big drop in September retail sales and weak factory data, sold off even more after the Fed chairman's dour assessment and finished the day with their largest percentage losses since the 1987 crash.
St. Louis Federal Reserve Bank President James Bullard said the sharp 1.2 percent drop in retail sales increased the risk of recession. "The third quarter, I think, will be flat to slightly negative," he told reporters in Little Rock, Arkansas. "That is going to push up the probability that it will later be named a recession.
RATE CUT SEEN
The data contributed to expectations that Fed officials will follow up an emergency interest rate cut made last week with another reduction at their next meeting on October 28-29.
Last week, in concert with central banks around the globe, the Fed cut benchmark rates by a half point to 1.5 percent. It said an intensification of the financial crisis had raised risks to growth, while curbing the risk of inflation.
In the latest bid to restore financial market stability, the U.S. government on Tuesday announced a dramatic plan to recapitalize banks, beginning with a $125 billion equity investment in nine major financial institutions.
But even with the government scrambling to restore credit, Bernanke cautioned it will take time for the economy to heal.
"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," he said.
Analysts said Bernanke's words suggested the Fed chief saw the deteriorating outlook as calling for another rate cut.
"Bernanke's comments ... reinforce the sense that the Fed will lower interest rates when it meets again," said Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co in New York.
FEW BRIGHT SPOTS
A Fed report prepared for the central bank's next meeting added to the gloomy news about the economy.
The Beige Book said economic activity had weakened across the country in recent weeks as businesses revisited capital investment plans, consumers curtailed spending and labor markets softened. The Fed described business contacts as "pessimistic."
In his speech, Bernanke said the housing sector remained the economy's weakest spot, but he also cited "marked slowdowns" in consumer spending, business investment and the labor market.
He added that credit markets would take time to unfreeze and said export sales, until recently a bright spot, were likely to slow as well.
While inflation had been high recently, Bernanke said expectations of future inflation had held steady or eased, import prices were moderating and commodity prices had fallen.
Those factors, along with the softness in the economy, "should lead to rates of inflation more consistent with price stability," he said. "I think the evidence is now in that the inflation problems are moderating and look to be returning to price stability at a reasonable pace."
Boston Fed President Eric Rosengren was more direct.
"One of the characteristics of a recession is in each of these recessions the inflation rate has come down quite dramatically," he told a real estate group in Boston.
"We're in a period when the economy is likely to grow quite slowly. The events of the last couple of weeks certainly aren't going to help.
Dow loses 733 after data feeds recession worry
Source Reuters
NEW YORK (Reuters) - Wall Street had its worst day since the 1987 stock market crash on Wednesday, as bleak economic data fed worries that all the efforts to unlock credit markets may not stave off a severe recession.
Federal Reserve Chairman Ben Bernanke added to those concerns when he said the economy faced a "significant threat" from paralyzed credit markets.
Dismal monthly U.S. retail sales set the tone for the session, dropping the most in more than three years, while a measure of New York state manufacturing hit its lowest level since the index started in 2001.
The Nasdaq has now wiped out all of its gains from Monday's 11 percent rally, while the benchmark S&P 500 is up only about 1 percent from Friday's close.
Wednesday's data intensified recession fears, as did the Federal Reserve's Beige Book report, which showed economic activity weakened across the United States in September as businesses revised capital investments and consumers curtailed spending.
Shares of companies considered economic bellwethers, such as industrial conglomerate Caterpillar Inc, fell sharply. Caterpillar's shares slid over 11 percent.
Fears of recession knocked commodities lower, with Exxon Mobil tumbling 14 percent as the price of oil fell.
"Retail sales spooked investors this morning and has increased the near-term risk of a broad-based recession," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.
The Dow and the benchmark S&P 500 suffered their worst one-day percentage drops since 1987.
The Dow Jones industrial average slid 733.08 points, or 7.87 percent, to 8,577.91, while the Standard & Poor's 500 Index tumbled 90.17 points, or 9.03 percent, to 907.84.
The Nasdaq Composite Index sank 150.68 points, or 8.47 percent, to 1,628.33.
The broad Dow Jones Wilshire 5000 closed down 905 points, or 8.99 percent, at 9,160.43, representing a paper loss for the day of approximately $1.1 trillion.
LATE SLIDE FOR eBAY
The negative news continued after the closing bell, with online auctioneer eBay Inc warning that its full-year revenues would fall below its previous forecast. Shares of eBay dropped about 4 percent after the closing bell.
During the regular session, shares of retailers skidded, with Wal-Mart falling 8.1 percent to $50.05 and Home Depot dropping 5.9 percent to $19.83. Analysts said the weak retail sales data underscored the severity of the squeeze on consumers faced with sliding home values, a tumbling stock market and tight credit.
Caterpillar's shares fell 11.4 percent to $42.06.
In the energy sector, Exxon Mobil fell 14 percent to $62.35, while Chevron lost 12.5 percent to $59.98. U.S. crude futures slid to a new 13-month low below $75 a barrel as fears of demand falling in a recession and slumping equities further pressured the oil markets. U.S. crude for November delivery fell $4.09 to settle at $74.54 a barrel.
Other commodity-related companies were also slammed as materials tumbled. Miner Freeport McMoran slid 19 percent to $33.17.
FOR BANKS, NO QUICK FIX
Financial shares fell after Meredith Whitney, an influential bank analyst at Oppenheimer & Co, said government's plan to stabilize key U.S. banks by injecting $250 billion is not a "panacea solution." The S&P's financial sub-index dropped 9.1 percent.
Shares of State Street Corp, one of the world's biggest institutional asset managers, plummeted 17.4 percent to $46.83. The company reported rising unrealized losses in its commercial paper program and investment portfolio, sparking concerns among investors.
Strong results from Coca-Cola, the world's largest soft-drink maker, helped it buck the trend after it posted quarterly profit that beat Wall Street's expectations. Coke's stock shot up 1.1 percent to $44.21 -- the only one of the 30 Dow industrials that finished higher.
Trading was low on the New York Stock Exchange, with about 1.68 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.54 billion shares traded, above last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by 9 to 1 on the NYSE and by 8 to 1 on the Nasdaq.
NEW YORK (Reuters) - Wall Street had its worst day since the 1987 stock market crash on Wednesday, as bleak economic data fed worries that all the efforts to unlock credit markets may not stave off a severe recession.
Federal Reserve Chairman Ben Bernanke added to those concerns when he said the economy faced a "significant threat" from paralyzed credit markets.
Dismal monthly U.S. retail sales set the tone for the session, dropping the most in more than three years, while a measure of New York state manufacturing hit its lowest level since the index started in 2001.
The Nasdaq has now wiped out all of its gains from Monday's 11 percent rally, while the benchmark S&P 500 is up only about 1 percent from Friday's close.
Wednesday's data intensified recession fears, as did the Federal Reserve's Beige Book report, which showed economic activity weakened across the United States in September as businesses revised capital investments and consumers curtailed spending.
Shares of companies considered economic bellwethers, such as industrial conglomerate Caterpillar Inc, fell sharply. Caterpillar's shares slid over 11 percent.
Fears of recession knocked commodities lower, with Exxon Mobil tumbling 14 percent as the price of oil fell.
"Retail sales spooked investors this morning and has increased the near-term risk of a broad-based recession," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.
The Dow and the benchmark S&P 500 suffered their worst one-day percentage drops since 1987.
The Dow Jones industrial average slid 733.08 points, or 7.87 percent, to 8,577.91, while the Standard & Poor's 500 Index tumbled 90.17 points, or 9.03 percent, to 907.84.
The Nasdaq Composite Index sank 150.68 points, or 8.47 percent, to 1,628.33.
The broad Dow Jones Wilshire 5000 closed down 905 points, or 8.99 percent, at 9,160.43, representing a paper loss for the day of approximately $1.1 trillion.
LATE SLIDE FOR eBAY
The negative news continued after the closing bell, with online auctioneer eBay Inc warning that its full-year revenues would fall below its previous forecast. Shares of eBay dropped about 4 percent after the closing bell.
During the regular session, shares of retailers skidded, with Wal-Mart falling 8.1 percent to $50.05 and Home Depot dropping 5.9 percent to $19.83. Analysts said the weak retail sales data underscored the severity of the squeeze on consumers faced with sliding home values, a tumbling stock market and tight credit.
Caterpillar's shares fell 11.4 percent to $42.06.
In the energy sector, Exxon Mobil fell 14 percent to $62.35, while Chevron lost 12.5 percent to $59.98. U.S. crude futures slid to a new 13-month low below $75 a barrel as fears of demand falling in a recession and slumping equities further pressured the oil markets. U.S. crude for November delivery fell $4.09 to settle at $74.54 a barrel.
Other commodity-related companies were also slammed as materials tumbled. Miner Freeport McMoran slid 19 percent to $33.17.
FOR BANKS, NO QUICK FIX
Financial shares fell after Meredith Whitney, an influential bank analyst at Oppenheimer & Co, said government's plan to stabilize key U.S. banks by injecting $250 billion is not a "panacea solution." The S&P's financial sub-index dropped 9.1 percent.
Shares of State Street Corp, one of the world's biggest institutional asset managers, plummeted 17.4 percent to $46.83. The company reported rising unrealized losses in its commercial paper program and investment portfolio, sparking concerns among investors.
Strong results from Coca-Cola, the world's largest soft-drink maker, helped it buck the trend after it posted quarterly profit that beat Wall Street's expectations. Coke's stock shot up 1.1 percent to $44.21 -- the only one of the 30 Dow industrials that finished higher.
Trading was low on the New York Stock Exchange, with about 1.68 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.54 billion shares traded, above last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by 9 to 1 on the NYSE and by 8 to 1 on the Nasdaq.
Fasten your seatbelts
Source TheAge
Over time, the volatility of the stock market exceeds the capacity of traders to absorb losses. In other words, very few people actually make money trading the stock market through entire cycles.
In the wake of the biggest one-day rout since the 1987 crash, this reality will brutalise any punter intrepid or foolish enough to have waded back in for a spot of bargain hunting during the few days.
Over the long-term, shares perform better than the other asset classes, bonds and property, but short and medium-term trading is a big boys' game. And so it is that the bear market now appears to be entering its "capitulation" phase where people simply chuck their hands in the air and walk away. Institutional volumes drop away too.
To those who have lambasted this reporter for being excessively bearish this year - and apparently talking the market down (which entirely exaggerates our significance in the universe) - it may be useful to know that we cut our teeth in this journalism caper in the bear market of 1990. It was not until every last punter was a bear and believed the market would not recover for years ... that it finally did.
This left a stark impression of the herd mentality, and of the notion of capitulation. In the aftermath of an abortive expansion into the US market Westpac had been decimated by the deepest losses in Australian corporate history, the stock was on its knees in the $2 range amid speculation the bank would go under, market sentiment was unbearably morose, and somebody began building a stake in Westpac.
The mystery buyer was finally outed as Kerry Packer. He picked up a 10% holding and launched a tilt for a couple of seats on the board with henchman Al Dunlap. They failed. Packer sold out way too early - but still made $100 million.
It should be kept in mind that the share market began recovering when Australia fell into the recession of the early 1990s. Since that time the market has been broadly in upswing. The dotcom bubble was just that, a bubble, and the subsequent bull-market by far the biggest in history.
This time around, sadly, the level of consumer debt is far greater.
Meanwhile, the bad news came thumping in last night on both sides of the pond. We won't reiterate here. Fed chairman Ben Bernanke was sufficiently concerned that he foreshadowed the need for greater market supervision by government in managing asset price bubbles.
Bernanke is a champion at shutting the gate after the horse has bolted, though a good deal of the blame for this mess can be directed at the abject failure of his predecessor Alan Greenspan to supervise interest rates for the long-term.
And in a prelude to further state intervention Bernanke noted that the US faced a "very serious too-big-to-fail problem". "There are too many firms that are in some sense systemically critical".
The big fear is bonds. Will the US bond market crack? Throughout this crisis there has been a pattern. When the Dow has been strong, bonds have weakened. When the Dow has been weak, bonds prices have ticked up in the "flight to quality".
The US bond market is the biggest market in the world and the 30-year treasury bond has hovered near its all-time highs - or all time low yields, as bond yields are inverse to price.
Bonds have been in a bull-market since the early 1980s when the yield peaked at 15%.
If the US bond is destined for the mother of all sell-offs - to use a tired old term - the world is in for the mother of all "dislocations" - to use a euphemism.
In the last seven trading days the 30-year bond has been sold down from 122.50 to 114.50, off a low of 113.80.
The Fed can control short-term rates but the fate of the big bond may be out of its hands, especially since China owns more than $1 trillion of them and the Arabs probably more.
If the rate spikes up so do the costs of long-term borrowing for the US Government. This, at a time when the deficit is spiralling towards $US1 trillion this year (some commentators are tipping $US2 trillion) and government debt - and this is before the ocean of household debt - is 70% of GDP and rising.
As GDP is contracting and fiscal policy expanding, the outlook is not pretty. Who will buy the bonds? The oil producers will. China and the rest of the world may not. The US Government will pull out all stops to protect the primacy of its bellwether asset, the long bond, and defend its dollar at all costs.
Over time, the volatility of the stock market exceeds the capacity of traders to absorb losses. In other words, very few people actually make money trading the stock market through entire cycles.
In the wake of the biggest one-day rout since the 1987 crash, this reality will brutalise any punter intrepid or foolish enough to have waded back in for a spot of bargain hunting during the few days.
Over the long-term, shares perform better than the other asset classes, bonds and property, but short and medium-term trading is a big boys' game. And so it is that the bear market now appears to be entering its "capitulation" phase where people simply chuck their hands in the air and walk away. Institutional volumes drop away too.
To those who have lambasted this reporter for being excessively bearish this year - and apparently talking the market down (which entirely exaggerates our significance in the universe) - it may be useful to know that we cut our teeth in this journalism caper in the bear market of 1990. It was not until every last punter was a bear and believed the market would not recover for years ... that it finally did.
This left a stark impression of the herd mentality, and of the notion of capitulation. In the aftermath of an abortive expansion into the US market Westpac had been decimated by the deepest losses in Australian corporate history, the stock was on its knees in the $2 range amid speculation the bank would go under, market sentiment was unbearably morose, and somebody began building a stake in Westpac.
The mystery buyer was finally outed as Kerry Packer. He picked up a 10% holding and launched a tilt for a couple of seats on the board with henchman Al Dunlap. They failed. Packer sold out way too early - but still made $100 million.
It should be kept in mind that the share market began recovering when Australia fell into the recession of the early 1990s. Since that time the market has been broadly in upswing. The dotcom bubble was just that, a bubble, and the subsequent bull-market by far the biggest in history.
This time around, sadly, the level of consumer debt is far greater.
Meanwhile, the bad news came thumping in last night on both sides of the pond. We won't reiterate here. Fed chairman Ben Bernanke was sufficiently concerned that he foreshadowed the need for greater market supervision by government in managing asset price bubbles.
Bernanke is a champion at shutting the gate after the horse has bolted, though a good deal of the blame for this mess can be directed at the abject failure of his predecessor Alan Greenspan to supervise interest rates for the long-term.
And in a prelude to further state intervention Bernanke noted that the US faced a "very serious too-big-to-fail problem". "There are too many firms that are in some sense systemically critical".
The big fear is bonds. Will the US bond market crack? Throughout this crisis there has been a pattern. When the Dow has been strong, bonds have weakened. When the Dow has been weak, bonds prices have ticked up in the "flight to quality".
The US bond market is the biggest market in the world and the 30-year treasury bond has hovered near its all-time highs - or all time low yields, as bond yields are inverse to price.
Bonds have been in a bull-market since the early 1980s when the yield peaked at 15%.
If the US bond is destined for the mother of all sell-offs - to use a tired old term - the world is in for the mother of all "dislocations" - to use a euphemism.
In the last seven trading days the 30-year bond has been sold down from 122.50 to 114.50, off a low of 113.80.
The Fed can control short-term rates but the fate of the big bond may be out of its hands, especially since China owns more than $1 trillion of them and the Arabs probably more.
If the rate spikes up so do the costs of long-term borrowing for the US Government. This, at a time when the deficit is spiralling towards $US1 trillion this year (some commentators are tipping $US2 trillion) and government debt - and this is before the ocean of household debt - is 70% of GDP and rising.
As GDP is contracting and fiscal policy expanding, the outlook is not pretty. Who will buy the bonds? The oil producers will. China and the rest of the world may not. The US Government will pull out all stops to protect the primacy of its bellwether asset, the long bond, and defend its dollar at all costs.
PAS leaders condemn Cheras Umno’s decision to create fund against libel suit
Source TheStar
KOTA BARU: Three senior PAS leaders have condemned the Cheras Umno division for setting up a fund to help the Utusan Malaysia newspaper defend itself against multi-million libel suits, saying their intention had racial undertones.
PAS vice-president Datuk Husam Musa said it was unbecoming for politicians to be defending newspapers that by virtue of ethics, was an independent organisation, a watchdog acting on behalf of society.
He wondered why Cheras Umno was going after Seputeh MP Teresa Kok who was at the centre of allegations that she petitioned a mosque in Puchong to reduce the volume for azan (a call for prayers) as everyone named in the allegations, from Kok to the mosque committee, had denied this.
Yet Cheras Umno was pushing the issue without realising the sensitivities of race and religion, said Husam.
“This is unhealthy for a country with a strong multi-ethnic and multi-religious composition, it can lead to unsavoury tensions,” he said.
Husam was speaking at the Kota Baru PAS “Hari Raya Aidil Fitri” gathering at the state Chinese Chamber of Commerce where the guest of honour was Penang Chief Minister Lim Guan Eng.
Kota Baru MP Datuk Wan Abdul Rahim Wan Abdullah who hosted the event said most inhabitants in the country particularly the Malays were descendents of migrants either from parts of the Malay archipelago or from the Yunan province in China with some later coming from India.
PAS spiritual adviser Datuk Nik Abdul Aziz Nik Mat urged Umno to come out with a fund to salvage Malays from following the secularism form of Islam that they imposed after learning from the British.
He said it was dangerous to use racism in an age where people are fighting for justice and equality around the world.
Lim who launched his book here about experiences of prison life to the early formative days of a DAP-dominated Penang Government, urged MCA and Gerakan to leave the Umno-dominated Barisan Nasional.
KOTA BARU: Three senior PAS leaders have condemned the Cheras Umno division for setting up a fund to help the Utusan Malaysia newspaper defend itself against multi-million libel suits, saying their intention had racial undertones.
PAS vice-president Datuk Husam Musa said it was unbecoming for politicians to be defending newspapers that by virtue of ethics, was an independent organisation, a watchdog acting on behalf of society.
He wondered why Cheras Umno was going after Seputeh MP Teresa Kok who was at the centre of allegations that she petitioned a mosque in Puchong to reduce the volume for azan (a call for prayers) as everyone named in the allegations, from Kok to the mosque committee, had denied this.
Yet Cheras Umno was pushing the issue without realising the sensitivities of race and religion, said Husam.
“This is unhealthy for a country with a strong multi-ethnic and multi-religious composition, it can lead to unsavoury tensions,” he said.
Husam was speaking at the Kota Baru PAS “Hari Raya Aidil Fitri” gathering at the state Chinese Chamber of Commerce where the guest of honour was Penang Chief Minister Lim Guan Eng.
Kota Baru MP Datuk Wan Abdul Rahim Wan Abdullah who hosted the event said most inhabitants in the country particularly the Malays were descendents of migrants either from parts of the Malay archipelago or from the Yunan province in China with some later coming from India.
PAS spiritual adviser Datuk Nik Abdul Aziz Nik Mat urged Umno to come out with a fund to salvage Malays from following the secularism form of Islam that they imposed after learning from the British.
He said it was dangerous to use racism in an age where people are fighting for justice and equality around the world.
Lim who launched his book here about experiences of prison life to the early formative days of a DAP-dominated Penang Government, urged MCA and Gerakan to leave the Umno-dominated Barisan Nasional.
Cops probe commotion at PM’s Raya open house
Source TheStar
PETALING JAYA: Police have recorded statements from three Hindraf organisers regarding a commotion at the Prime Minister and Cabinet members’ Hari Raya open house at the Putra World Trade Centre recently.
The three are S. Jayathas, 41, K. Shanti, in her 30s, and K. Selvam, 43. They were accompanied by their lawyers Latheefa Koya and N. Surendran.
Shanti is the wife of Hindraf chairman P. Waythamoorthy who is in self-exile in London.
The three arrived at the Dang Wangi district police headquarters at 3pm yesterday where they gave their statements for an hour.
Surendran said the three were asked about 28 questions under Section 27 of the Police Act and Section 447 of the Penal Code.
“However, we chose to remain silent for each of the questions because we felt that the questions had nothing to do with the case we were being investigated under,” said Jayathas.
Surendran said the questioning was a form of intimidation and harassment against his clients who had gathered peacefully at the Prime Minister’s Hari Raya open house.
“It is absurd because for the first time in Malaysia someone is called in for questioning for attending a Hari Raya open house. We believe this is politically motivated and a clear case of police abuse of power,” he said.
He added that police did not mention whether there was a need for the three to present themselves again at the police headquarters for further questioning.
Kuala Lumpur deputy police chief Senior Asst Comm (I) Datuk Abdul Samah Mat confirmed that police were investigating the case.
A group of 160 Hindraf and “Free Raja Petra Kamarudin” supporters were said to have allegedly caused a commotion at the Prime Minister’s open house before presenting him with a teddy bear and a Raya greeting card containing signatures requesting the release of detained Hindraf leaders.
PETALING JAYA: Police have recorded statements from three Hindraf organisers regarding a commotion at the Prime Minister and Cabinet members’ Hari Raya open house at the Putra World Trade Centre recently.
The three are S. Jayathas, 41, K. Shanti, in her 30s, and K. Selvam, 43. They were accompanied by their lawyers Latheefa Koya and N. Surendran.
Shanti is the wife of Hindraf chairman P. Waythamoorthy who is in self-exile in London.
The three arrived at the Dang Wangi district police headquarters at 3pm yesterday where they gave their statements for an hour.
Surendran said the three were asked about 28 questions under Section 27 of the Police Act and Section 447 of the Penal Code.
“However, we chose to remain silent for each of the questions because we felt that the questions had nothing to do with the case we were being investigated under,” said Jayathas.
Surendran said the questioning was a form of intimidation and harassment against his clients who had gathered peacefully at the Prime Minister’s Hari Raya open house.
“It is absurd because for the first time in Malaysia someone is called in for questioning for attending a Hari Raya open house. We believe this is politically motivated and a clear case of police abuse of power,” he said.
He added that police did not mention whether there was a need for the three to present themselves again at the police headquarters for further questioning.
Kuala Lumpur deputy police chief Senior Asst Comm (I) Datuk Abdul Samah Mat confirmed that police were investigating the case.
A group of 160 Hindraf and “Free Raja Petra Kamarudin” supporters were said to have allegedly caused a commotion at the Prime Minister’s open house before presenting him with a teddy bear and a Raya greeting card containing signatures requesting the release of detained Hindraf leaders.
Should Malaysia guarantee bank deposits?
Source TheStar
AS governments around the world are rushing to guarantee deposits with their financial institutions in the wake of a spreading financial crisis, the question is if Malaysia should follow suit — and when.
If Malaysia decides to do so, it won’t be the first time. During the Asian financial crisis of 1997/98, there was a significant shift of money from local to foreign banks, which were perceived to be safer than the local banks.
To stop the situation from worsening and to ensure that local banks had sufficient deposits to provide enough liquidity for their banking activities, the Government gave an assurance that deposits with local banks were safe. Savers were assuaged and the shift dwindled.
Now we are in an ironically happy situation — relatively speaking that is — where many people perceive local banks, because of their lack of exposure to the US subprime mortgage crisis, to be stronger than some of the foreign ones.
It may be just too early for the Government to think of giving another such assurance to depositors right now since the banks here are little exposed to the credit and lending crisis overseas and their critical ratios all still look good.
But there is no harm in giving some deep thought to the issue, especially since it is central to the health of a financial system. If depositors lose confidence in the financial institutions and withdraw their money, liquidity will simply dry up and lead to a total collapse of the system.
Right now, there is a deposit insurance scheme in operation. This is sponsored and supported by the Government under Perbadanan Insurans Deposit Malaysia or PDIM, the deposits insurance body. Under the scheme, each account holder per bank is insured up to RM60,000 in the event of bank failure. This covers the over 90% of depositors who have RM60,000 or less in deposits per bank.
But the amount of deposits covered is a whole lot less than that because the large depositors in the system are government bodies, corporations, partnerships and businesses, each of whose accounts can run into the millions.
Many of them will maintain just a couple of accounts and it would be too much trouble and too little benefit to spread it over 36 banks and gain an insurance coverage of just RM2.16mil (36 times 60,000) under the current deposit insurance scheme.
Under the PDIM scheme, RM191.5bil of deposits were insured as at Dec 31, 2007. But the total deposits as at the same date with commercial banks in Malaysia amounted to RM821bil. That means less than a quarter of total deposits are insured.
While the scheme is good for ensuring that the bulk of depositors is protected in the event of bank failure, it does not insure the bulk of deposits in the system. Thus, the deposit insurance scheme that Malaysia has is one that protects small savers but is of little help when it comes to problems that can affect the entire financial system — more than that is required to stop a systemic failure.
So far, contagion has not resulted in severe disease yet. The financial system is sound. But if the economy slips into recession, and output of goods and services contracts as worldwide demand falls, things can get sour here. And if there is a severe fall in property prices, it will worsen things.
And then there are peculiar problems in guaranteeing bank deposits — there could be a surfeit of deposits from overseas coming in here to take advantage of a government guarantee.
Conversely, if neighbouring Singapore decides to guarantee deposits, there could be an outflow of funds from here to there if we do not follow suit.
Yes, it may still be a bit premature to talk about guaranteeing all deposits in the banking system. But it is clear we must continue to watch the situation very closely and, if it is time to give that assurance, we simply must.
AS governments around the world are rushing to guarantee deposits with their financial institutions in the wake of a spreading financial crisis, the question is if Malaysia should follow suit — and when.
If Malaysia decides to do so, it won’t be the first time. During the Asian financial crisis of 1997/98, there was a significant shift of money from local to foreign banks, which were perceived to be safer than the local banks.
To stop the situation from worsening and to ensure that local banks had sufficient deposits to provide enough liquidity for their banking activities, the Government gave an assurance that deposits with local banks were safe. Savers were assuaged and the shift dwindled.
Now we are in an ironically happy situation — relatively speaking that is — where many people perceive local banks, because of their lack of exposure to the US subprime mortgage crisis, to be stronger than some of the foreign ones.
It may be just too early for the Government to think of giving another such assurance to depositors right now since the banks here are little exposed to the credit and lending crisis overseas and their critical ratios all still look good.
But there is no harm in giving some deep thought to the issue, especially since it is central to the health of a financial system. If depositors lose confidence in the financial institutions and withdraw their money, liquidity will simply dry up and lead to a total collapse of the system.
Right now, there is a deposit insurance scheme in operation. This is sponsored and supported by the Government under Perbadanan Insurans Deposit Malaysia or PDIM, the deposits insurance body. Under the scheme, each account holder per bank is insured up to RM60,000 in the event of bank failure. This covers the over 90% of depositors who have RM60,000 or less in deposits per bank.
But the amount of deposits covered is a whole lot less than that because the large depositors in the system are government bodies, corporations, partnerships and businesses, each of whose accounts can run into the millions.
Many of them will maintain just a couple of accounts and it would be too much trouble and too little benefit to spread it over 36 banks and gain an insurance coverage of just RM2.16mil (36 times 60,000) under the current deposit insurance scheme.
Under the PDIM scheme, RM191.5bil of deposits were insured as at Dec 31, 2007. But the total deposits as at the same date with commercial banks in Malaysia amounted to RM821bil. That means less than a quarter of total deposits are insured.
While the scheme is good for ensuring that the bulk of depositors is protected in the event of bank failure, it does not insure the bulk of deposits in the system. Thus, the deposit insurance scheme that Malaysia has is one that protects small savers but is of little help when it comes to problems that can affect the entire financial system — more than that is required to stop a systemic failure.
So far, contagion has not resulted in severe disease yet. The financial system is sound. But if the economy slips into recession, and output of goods and services contracts as worldwide demand falls, things can get sour here. And if there is a severe fall in property prices, it will worsen things.
And then there are peculiar problems in guaranteeing bank deposits — there could be a surfeit of deposits from overseas coming in here to take advantage of a government guarantee.
Conversely, if neighbouring Singapore decides to guarantee deposits, there could be an outflow of funds from here to there if we do not follow suit.
Yes, it may still be a bit premature to talk about guaranteeing all deposits in the banking system. But it is clear we must continue to watch the situation very closely and, if it is time to give that assurance, we simply must.
PAS persoal perkembangan projek Koridor Pantai Timur
Source Harakah
KUALA LUMPUR, 14 Okt (Hrkh) - Dato' Kamaruddin Jaafar (PAS-Tumpat) melahirkan kebimbangan kerana setelah dua tahun Koridor Pantai Timur (Ecer) dilancarkan, sehingga kini peruntukan RM30 juta yang diumumkan hanya untuk kajian semata-mata.
Jelas Kamaruddin, perkara ini amat mengecewakan terutama bagi rakyat di negeri Kelantan, Terengganu dan Pahang.
"Projek Jambatan Sultan Yahya ke II yang lebih 13 bulan dilancarkan dan untuk pelaksanaan projek selama 30 bulan, tidak sampai 10 peratus dilaksanakan. Perkara ini menunjukkan kegagalan yang jelas di pihak kerajaan," katanya.
Beliau berkata demikian sewaktu mengemukakan soalan tambahan dalam sesi soal jawab di Dewan Rakyat hari ini.
Dalam pada itu Kamaruddin turut mengemukakan persoalan, apakah Petronas sebagai peneraju utama projek berkaitan tidak bercadang untuk mewujudkan 'supply base' di Bachok, Pasir Puteh atau Tumpat untuk menyelenggarakan pencarian, penggalian serta penemuan minyak dan gas yang banyak terdapat di persisir lautan Kelantan dan Terengganu.
Menjawab soalan tersebut, Menteri Di Jabatan Perdana Menteri, Senator Tan Sri Amirsham A.Aziz berkata Ecer masih baru dilancarkan dan baru dilaksanakan pertengahan tahun ini.
Jelasnya, kerajaan masih dalam peringkat perundingan bagi mendapatkan pelabur di peringkat sektor pembuatan termasuk industri berkaitan minyak.
Sementara itu, dalam isu yang sama, Dato' Abdul Ghafur Salleh (BN- Kalabakan) menyelar kerajaan kerana pelaksanaan koridor di Sabah yang dilancarkan dua tahun dahulu sampai sekarang tidak menampakkan sebarang hasil.
"Sudah dua tahun koridor di Sabah dilancarkan oleh Perdana Menteri tetapi sampai sekarang tidak nampak 'satu butir pasir' pun saya tidak nampak. Kenapa perkara ini dilalaikan. Mungkinkah kerana ini hanya 'manisan' kepada rakyat Sabah sewaktu pilihan raya sahaja?" katanya yang menarik perhatian ahli dewan yang lain.
Abdul Ghaffur juga mempersoalkan apakah janji peruntukan RM5 bilion yang diperuntukan untuk pelaksanaan koridor tersebut telah diberi, akan diberi, belum diberi atau tidak diberi.
Beliau juga melahirkan kekecewaan kerana berlaku ketidakadilan dalam pelaksanaan koridor di Semenanjun dan Sabah.
"Petronas merupakan peneraju utama koridor di Semenanjung. Bagaimanapun peneraju di Sabah adalah syarikat-syarikat kerajaan negeri yang tidak mempunyai wang.
"Rakyat Sabah tidak mahu 'manisan' semata-mata. Jika betul-betul ada peruntukan tersebut, boleh bagi kepada kami. Saya juga lihat dalam bajet tiada dinyatakan mengenai perkara ini. Kita minta penjelasan daripada Menteri di Jabatan Perdana Menteri megnenai perkara ini," katanya.
Bagaimanapun Amirsham yang bangkit menjawab soalan tersebut menyatakan soalan tersebut tidak mempunyai perkaitan dengan soalan asal yang dikemukakan.
Abdul Ghaffur yang tidak berpuas hati dengan jawapan yang diberikan Amirsham sekali lagi bangkit menyatakan adalah tidak adil bagi beliau kerana sebagai menteri, jawapan bagi perkara tersebut seharusnya dapat diberikan.
"Dato' Speaker, ini tidak adil. Seharusnya semua jawapan berkaitan dengan koridor ini sudah ada dalam kepala Menteri Jabatan Perdana Menteri. Kalau begini tidak layak duduk di Jabatan Perdana Menteri," katanya yang disahut suara-suara ahli dewan.
Timbalan Yang DiPertua, Dato' Ronald Kiandee menyatakan isu yang dinyatakan itu harus dibawa dalam perbahasan bajet.
KUALA LUMPUR, 14 Okt (Hrkh) - Dato' Kamaruddin Jaafar (PAS-Tumpat) melahirkan kebimbangan kerana setelah dua tahun Koridor Pantai Timur (Ecer) dilancarkan, sehingga kini peruntukan RM30 juta yang diumumkan hanya untuk kajian semata-mata.
Jelas Kamaruddin, perkara ini amat mengecewakan terutama bagi rakyat di negeri Kelantan, Terengganu dan Pahang.
"Projek Jambatan Sultan Yahya ke II yang lebih 13 bulan dilancarkan dan untuk pelaksanaan projek selama 30 bulan, tidak sampai 10 peratus dilaksanakan. Perkara ini menunjukkan kegagalan yang jelas di pihak kerajaan," katanya.
Beliau berkata demikian sewaktu mengemukakan soalan tambahan dalam sesi soal jawab di Dewan Rakyat hari ini.
Dalam pada itu Kamaruddin turut mengemukakan persoalan, apakah Petronas sebagai peneraju utama projek berkaitan tidak bercadang untuk mewujudkan 'supply base' di Bachok, Pasir Puteh atau Tumpat untuk menyelenggarakan pencarian, penggalian serta penemuan minyak dan gas yang banyak terdapat di persisir lautan Kelantan dan Terengganu.
Menjawab soalan tersebut, Menteri Di Jabatan Perdana Menteri, Senator Tan Sri Amirsham A.Aziz berkata Ecer masih baru dilancarkan dan baru dilaksanakan pertengahan tahun ini.
Jelasnya, kerajaan masih dalam peringkat perundingan bagi mendapatkan pelabur di peringkat sektor pembuatan termasuk industri berkaitan minyak.
Sementara itu, dalam isu yang sama, Dato' Abdul Ghafur Salleh (BN- Kalabakan) menyelar kerajaan kerana pelaksanaan koridor di Sabah yang dilancarkan dua tahun dahulu sampai sekarang tidak menampakkan sebarang hasil.
"Sudah dua tahun koridor di Sabah dilancarkan oleh Perdana Menteri tetapi sampai sekarang tidak nampak 'satu butir pasir' pun saya tidak nampak. Kenapa perkara ini dilalaikan. Mungkinkah kerana ini hanya 'manisan' kepada rakyat Sabah sewaktu pilihan raya sahaja?" katanya yang menarik perhatian ahli dewan yang lain.
Abdul Ghaffur juga mempersoalkan apakah janji peruntukan RM5 bilion yang diperuntukan untuk pelaksanaan koridor tersebut telah diberi, akan diberi, belum diberi atau tidak diberi.
Beliau juga melahirkan kekecewaan kerana berlaku ketidakadilan dalam pelaksanaan koridor di Semenanjun dan Sabah.
"Petronas merupakan peneraju utama koridor di Semenanjung. Bagaimanapun peneraju di Sabah adalah syarikat-syarikat kerajaan negeri yang tidak mempunyai wang.
"Rakyat Sabah tidak mahu 'manisan' semata-mata. Jika betul-betul ada peruntukan tersebut, boleh bagi kepada kami. Saya juga lihat dalam bajet tiada dinyatakan mengenai perkara ini. Kita minta penjelasan daripada Menteri di Jabatan Perdana Menteri megnenai perkara ini," katanya.
Bagaimanapun Amirsham yang bangkit menjawab soalan tersebut menyatakan soalan tersebut tidak mempunyai perkaitan dengan soalan asal yang dikemukakan.
Abdul Ghaffur yang tidak berpuas hati dengan jawapan yang diberikan Amirsham sekali lagi bangkit menyatakan adalah tidak adil bagi beliau kerana sebagai menteri, jawapan bagi perkara tersebut seharusnya dapat diberikan.
"Dato' Speaker, ini tidak adil. Seharusnya semua jawapan berkaitan dengan koridor ini sudah ada dalam kepala Menteri Jabatan Perdana Menteri. Kalau begini tidak layak duduk di Jabatan Perdana Menteri," katanya yang disahut suara-suara ahli dewan.
Timbalan Yang DiPertua, Dato' Ronald Kiandee menyatakan isu yang dinyatakan itu harus dibawa dalam perbahasan bajet.
MTUC bimbang ekonomi global jejas negara
Source Harakah
BUTTERWORTH, 14 Okt (Hrkh) - Kongres Kesatuan Sekerja Malaysia (MTUC) mempertikaikan kenyataan Kerajaan Malaysia yang masih menggangap ekonomi negara masih kukuh sedangkan semua tahu ekonomi global sedang mengalami kejatuhan.
Demikian kata Presiden MTUC, Syed Shahir Syed Mohd semasa sidang akhbar di Pejabat Kesatuan Pekerja-Pekerja Perusahaan Lektrik (E.I.W.U) Taman Inderawaseh, Perai pagi tadi.
Menurut beliau, bila ekonomi global jatuh pastinya Malaysia tidak terlepas daripada merasai bahang kegawatan dan kenyataan Perdana Menteri, Dato' Seri Abdullah Ahmad Badawi sendiri tidak releven.
"Kerajaan Malaysia sewajarnya bertindak segera mencari jalan bagaimana untuk menyelamatkan kegawatan yang semakin memuncak sekarang bukan mengeluarkan kenyataan yang tidak releven," ujarnya yang hadir bersama Pegerusi MTUC Pulau Pinang, Abdul Razak Abdul Hamid.
Di negara luar seperti Amerika Syarikat dan Britian, kerajaan negara itu terpaksa mengeluarkan peruntukan menyelamatkan institusi kewangan daripada bangkrap.
Sebagai sebuah negara kecil bagaimana Malaysia boleh bertahan walhal banyak eskpot negara ini bergantung pada dua negara besar itu, katanya.
MTUC katanya, begitu khuatir dalam masa terdekat banyak industri di negara ini akan ditutup sekali gus pembuangan pekerja berlaku tanpa membayar sebarang pampasan sepertimana yang berlaku pada kilang Nikko Electronic Berhad awal tahun ini.
Jesteru katanya, untuk menangani masalah tersebut, Kerajaan Malaysia harus mewujudkan tabungan untuk digunakan apabila syarikat tidak mampu membayar pampasan dan kerajaan juga disaran mengkaji semula polisi kewangan kerajaan sendiri supaya pekerja tidak terus ditindas.
BUTTERWORTH, 14 Okt (Hrkh) - Kongres Kesatuan Sekerja Malaysia (MTUC) mempertikaikan kenyataan Kerajaan Malaysia yang masih menggangap ekonomi negara masih kukuh sedangkan semua tahu ekonomi global sedang mengalami kejatuhan.
Demikian kata Presiden MTUC, Syed Shahir Syed Mohd semasa sidang akhbar di Pejabat Kesatuan Pekerja-Pekerja Perusahaan Lektrik (E.I.W.U) Taman Inderawaseh, Perai pagi tadi.
Menurut beliau, bila ekonomi global jatuh pastinya Malaysia tidak terlepas daripada merasai bahang kegawatan dan kenyataan Perdana Menteri, Dato' Seri Abdullah Ahmad Badawi sendiri tidak releven.
"Kerajaan Malaysia sewajarnya bertindak segera mencari jalan bagaimana untuk menyelamatkan kegawatan yang semakin memuncak sekarang bukan mengeluarkan kenyataan yang tidak releven," ujarnya yang hadir bersama Pegerusi MTUC Pulau Pinang, Abdul Razak Abdul Hamid.
Di negara luar seperti Amerika Syarikat dan Britian, kerajaan negara itu terpaksa mengeluarkan peruntukan menyelamatkan institusi kewangan daripada bangkrap.
Sebagai sebuah negara kecil bagaimana Malaysia boleh bertahan walhal banyak eskpot negara ini bergantung pada dua negara besar itu, katanya.
MTUC katanya, begitu khuatir dalam masa terdekat banyak industri di negara ini akan ditutup sekali gus pembuangan pekerja berlaku tanpa membayar sebarang pampasan sepertimana yang berlaku pada kilang Nikko Electronic Berhad awal tahun ini.
Jesteru katanya, untuk menangani masalah tersebut, Kerajaan Malaysia harus mewujudkan tabungan untuk digunakan apabila syarikat tidak mampu membayar pampasan dan kerajaan juga disaran mengkaji semula polisi kewangan kerajaan sendiri supaya pekerja tidak terus ditindas.
The Wrong Plan for Australia
Source Wall Street Journal
By STEPHEN KIRCHNER
Australian Prime Minister Kevin Rudd has just unveiled a fiscal stimulus plan worth 10.4 billion Australian dollars ($7.4 billion). At around 1% of GDP, it's bold. Will it work? Probably not as intended.
The plan consists of a set of handouts for politically appealing groups, such as old-age pensioners and families with children. There's also a big boost to infrastructure spending. It's a dramatic change for a government that as recently as May was hewing to the tightest fiscal policy since 1970-71, with a budget surplus of 2.1% of GDP. That budget was designed to put downward pressure on inflation. Taken together with the Reserve Bank of Australia's one-percentage-point easing at the beginning of the month, the new stimulus package points to a major reassessment of economic risks on the part of Australian policymakers. Growth has replaced inflation as the top concern.
Mr. Rudd's plan might look like a solution in search of a problem. Economic growth is set to slow, but Australia's real economy has yet to show significant stress from the global financial crisis. Financial institutions remain sound, and confidence has been boosted by the weekend's coordinated move by Australia and New Zealand to insure deposits. Monetary policy has already responded aggressively and a sharp fall in the Australian dollar exchange rate relative to the U.S. dollar is performing its traditional function of insulating Australia from external economic shocks.
There's certainly room for stimulus measures. But there are risks to stimulus, too. Timing fiscal stimulus measures so they take effect when they are most needed is difficult. Get the timing wrong and these measures could end-up being pro- rather than counter-cyclical.
A case in point is the government's proposal to accelerate its infrastructure spending agenda. Even with an accelerated timetable, work on these projects will not commence until well into 2009, with much of the spending not seen until even later, when Australia may already be through the feared economic downturn. Infrastructure spending decisions made in a crisis atmosphere might not be evaluated to the highest standards. Australia could be saddled with some wasteful rather than productivity-enhancing infrastructure projects.
Other aspects of Mr. Rudd's plan are at odds with what government should be doing in the current environment. The plan provides $1.5 billion in grants to first-time home buyers. It would double the grant amount to buyers of existing homes, while tripling the grant to buyers of newly built homes. The latter measure will be useful in addressing the chronic housing shortage that has driven housing affordability in Australia to record lows and seen rising rents makes a significant contribution to inflation.
The grant to buyers of existing homes, however, will serve only to bid up the prices of existing properties, the opposite of what is needed to improve housing affordability. This will benefit existing home owners rather than new home buyers, and has little value as a stimulus measure because it merely transfers wealth from buyers to current owners rather than encouraging new housing supply.
In other respects, the plan moves away from, not toward, broader structural reforms important to the long-term health of the economy. Consider the lump-sum payment to old-age and other pensioners, scheduled for December. Single pensioners will receive a one-time payment of A$1,400, while couples will receive A$2,100. The government calls this a "down payment on long-term pension reform," but it leaves the long-term future of pension reform an open issue. The focus for future reform needs to be on reducing dependence on the government pension. This means making the pension less rather than more attractive, so as to encourage people to save for their retirement.
Similarly, the government will make a one-off A$1,000 payment for each child in eligible families. While this may have some value as a short-term economic stimulus measure, it does not address some of the long-term issues clouding the family payments system, including the disincentives to labor-force participation.
The biggest problem with the stimulus plan, however, is something that's not in it -- tax relief. That too has been left to a future review by the Treasury Secretary, Ken Henry. There had been speculation the government might introduce a one-off tax rebate. Since the government says it is making "down payments" on future reform, a tax rebate would have provided a welcome signal of the government's commitment to this vital policy area. A tax rebate would diffuse more broadly than one-off welfare payments and reward labor-force participation rather than welfare dependence.
Short-term stimulus measures need not conflict with the imperatives of long-term structural reform. The government should have used the global financial crisis to gain increased traction for a long-term structural reform agenda that will provide lasting economic security, and not just a short-term boost to spending. The biggest flaw of Mr. Rudd's plan is all the opportunities it missed.
By STEPHEN KIRCHNER
Australian Prime Minister Kevin Rudd has just unveiled a fiscal stimulus plan worth 10.4 billion Australian dollars ($7.4 billion). At around 1% of GDP, it's bold. Will it work? Probably not as intended.
The plan consists of a set of handouts for politically appealing groups, such as old-age pensioners and families with children. There's also a big boost to infrastructure spending. It's a dramatic change for a government that as recently as May was hewing to the tightest fiscal policy since 1970-71, with a budget surplus of 2.1% of GDP. That budget was designed to put downward pressure on inflation. Taken together with the Reserve Bank of Australia's one-percentage-point easing at the beginning of the month, the new stimulus package points to a major reassessment of economic risks on the part of Australian policymakers. Growth has replaced inflation as the top concern.
Mr. Rudd's plan might look like a solution in search of a problem. Economic growth is set to slow, but Australia's real economy has yet to show significant stress from the global financial crisis. Financial institutions remain sound, and confidence has been boosted by the weekend's coordinated move by Australia and New Zealand to insure deposits. Monetary policy has already responded aggressively and a sharp fall in the Australian dollar exchange rate relative to the U.S. dollar is performing its traditional function of insulating Australia from external economic shocks.
There's certainly room for stimulus measures. But there are risks to stimulus, too. Timing fiscal stimulus measures so they take effect when they are most needed is difficult. Get the timing wrong and these measures could end-up being pro- rather than counter-cyclical.
A case in point is the government's proposal to accelerate its infrastructure spending agenda. Even with an accelerated timetable, work on these projects will not commence until well into 2009, with much of the spending not seen until even later, when Australia may already be through the feared economic downturn. Infrastructure spending decisions made in a crisis atmosphere might not be evaluated to the highest standards. Australia could be saddled with some wasteful rather than productivity-enhancing infrastructure projects.
Other aspects of Mr. Rudd's plan are at odds with what government should be doing in the current environment. The plan provides $1.5 billion in grants to first-time home buyers. It would double the grant amount to buyers of existing homes, while tripling the grant to buyers of newly built homes. The latter measure will be useful in addressing the chronic housing shortage that has driven housing affordability in Australia to record lows and seen rising rents makes a significant contribution to inflation.
The grant to buyers of existing homes, however, will serve only to bid up the prices of existing properties, the opposite of what is needed to improve housing affordability. This will benefit existing home owners rather than new home buyers, and has little value as a stimulus measure because it merely transfers wealth from buyers to current owners rather than encouraging new housing supply.
In other respects, the plan moves away from, not toward, broader structural reforms important to the long-term health of the economy. Consider the lump-sum payment to old-age and other pensioners, scheduled for December. Single pensioners will receive a one-time payment of A$1,400, while couples will receive A$2,100. The government calls this a "down payment on long-term pension reform," but it leaves the long-term future of pension reform an open issue. The focus for future reform needs to be on reducing dependence on the government pension. This means making the pension less rather than more attractive, so as to encourage people to save for their retirement.
Similarly, the government will make a one-off A$1,000 payment for each child in eligible families. While this may have some value as a short-term economic stimulus measure, it does not address some of the long-term issues clouding the family payments system, including the disincentives to labor-force participation.
The biggest problem with the stimulus plan, however, is something that's not in it -- tax relief. That too has been left to a future review by the Treasury Secretary, Ken Henry. There had been speculation the government might introduce a one-off tax rebate. Since the government says it is making "down payments" on future reform, a tax rebate would have provided a welcome signal of the government's commitment to this vital policy area. A tax rebate would diffuse more broadly than one-off welfare payments and reward labor-force participation rather than welfare dependence.
Short-term stimulus measures need not conflict with the imperatives of long-term structural reform. The government should have used the global financial crisis to gain increased traction for a long-term structural reform agenda that will provide lasting economic security, and not just a short-term boost to spending. The biggest flaw of Mr. Rudd's plan is all the opportunities it missed.
UAE pumps $19 bln more emergency funds into banks
Source Reuters
DUBAI (Reuters) - The United Arab Emirates more than doubled its emergency bank funding plan to 120 billion dirhams ($32.67 billion) on Tuesday as Gulf Arab states stepped up moves to combat the global financial crisis.
But the Gulf Arab state left bankers guessing about how it would employ the 70 billion dirhams ($19 billion) of new cash -- the biggest Gulf cash intervention to date -- after the UAE central bank opened a 50 billion dirham emergency lending facility last month.
The UAE prime minister ordered the transfer of funds to the finance ministry to pump into the banking sector to protect against global volatility, state news agency WAM said, without giving details of the mechanism.
The latest moves comes after an unprecedented week of emergency policy initiatives in the Gulf and around the world to revive a financial sector paralysed by fear and threatening to push the global economy into a deep recession.
The UAE government promised earlier this week to protect all national banks from credit risks, to provide sufficient liquidity for interbank lending and to guarantee bank deposits.
In a bid to bolster shares after weeks of declines, it also relaxed share buyback rules on the country's bourses.
Interbank lending rates in the UAE fell for the second day running on Tuesday after the extra funds were announced. Interbank rates in Saudi Arabia, which has also sought to reassure investors that there is sufficient liquidity in the system, edged up after falling on Monday.
"The series of measures the authorities have taken including pumping liquidity, facilitating company share buyback procedures, guaranteeing deposits...has the ability to reinforce confidence in the financial markets," Abdullah al-Turaifi, head of the Securities and Commodities Authority said.
MECHANISM UNCLEAR
Bankers said they expected the new government funds to be deposited with banks to alleviate the tensions that had pushed up interbank lending rates.
"It will probably be in the form of deposits. There are examples of this around the world," said the treasurer at a major UAE bank under the condition of anonymity.
"There is more tension in Dubai than in Abu Dhabi but everybody is affected," he said. "The good news is that they are providing financial assistance, it is earmarked and available for the sector."
The UAE central bank declined to comment and a spokesman for the finance ministry was not immediately available.
If the government places new funds as deposits with banks, it will ease funding tensions and help relax borrowing conditions that threaten to choke off a five-year economic boom in the Gulf Arab region, said a second UAE bank treasurer, who declined to be named.
But if the funds are merely meant to augment the existing 50-billion-dirham borrowing window, it is unlikely to have any impact, he said.
"If there is actual cash coming into the market, we'll see the interbank market settling down," he said.
"If it doesn't come in ... in that case, actual lending and borrowing in the interbank market will not improve."
The ruler of Dubai and UAE Prime Minister Sheikh Mohammed bin Rashid al-Maktoum ordered the central bank and the finance ministry to devise a system by which to pump the new liquidity into the financial sector, WAM said. It gave no more details.
DUBAI (Reuters) - The United Arab Emirates more than doubled its emergency bank funding plan to 120 billion dirhams ($32.67 billion) on Tuesday as Gulf Arab states stepped up moves to combat the global financial crisis.
But the Gulf Arab state left bankers guessing about how it would employ the 70 billion dirhams ($19 billion) of new cash -- the biggest Gulf cash intervention to date -- after the UAE central bank opened a 50 billion dirham emergency lending facility last month.
The UAE prime minister ordered the transfer of funds to the finance ministry to pump into the banking sector to protect against global volatility, state news agency WAM said, without giving details of the mechanism.
The latest moves comes after an unprecedented week of emergency policy initiatives in the Gulf and around the world to revive a financial sector paralysed by fear and threatening to push the global economy into a deep recession.
The UAE government promised earlier this week to protect all national banks from credit risks, to provide sufficient liquidity for interbank lending and to guarantee bank deposits.
In a bid to bolster shares after weeks of declines, it also relaxed share buyback rules on the country's bourses.
Interbank lending rates in the UAE fell for the second day running on Tuesday after the extra funds were announced. Interbank rates in Saudi Arabia, which has also sought to reassure investors that there is sufficient liquidity in the system, edged up after falling on Monday.
"The series of measures the authorities have taken including pumping liquidity, facilitating company share buyback procedures, guaranteeing deposits...has the ability to reinforce confidence in the financial markets," Abdullah al-Turaifi, head of the Securities and Commodities Authority said.
MECHANISM UNCLEAR
Bankers said they expected the new government funds to be deposited with banks to alleviate the tensions that had pushed up interbank lending rates.
"It will probably be in the form of deposits. There are examples of this around the world," said the treasurer at a major UAE bank under the condition of anonymity.
"There is more tension in Dubai than in Abu Dhabi but everybody is affected," he said. "The good news is that they are providing financial assistance, it is earmarked and available for the sector."
The UAE central bank declined to comment and a spokesman for the finance ministry was not immediately available.
If the government places new funds as deposits with banks, it will ease funding tensions and help relax borrowing conditions that threaten to choke off a five-year economic boom in the Gulf Arab region, said a second UAE bank treasurer, who declined to be named.
But if the funds are merely meant to augment the existing 50-billion-dirham borrowing window, it is unlikely to have any impact, he said.
"If there is actual cash coming into the market, we'll see the interbank market settling down," he said.
"If it doesn't come in ... in that case, actual lending and borrowing in the interbank market will not improve."
The ruler of Dubai and UAE Prime Minister Sheikh Mohammed bin Rashid al-Maktoum ordered the central bank and the finance ministry to devise a system by which to pump the new liquidity into the financial sector, WAM said. It gave no more details.
BNM: Malaysian financial system can weather global financial storm
Source TheStar
KUALA LUMPUR: The Malaysian financial system can weather the global financial turmoil and remains resilient, says Bank Negara.
The central bank said on Tuesday that it has a fully developed supervisory and surveillance system. It was also continuously monitors all financial institutions under its purview and will take appropriate action to safeguard the soundness of the financial system.
“The (central) Bank stands ready to provide liquidity, whenever necessary, to financial institutions under its purview. The Bank is also closely engaging with the other monetary authorities in the region to monitor and respond with co-ordinated measures in managing the current challenging environment,” it said.
Commenting on the resilience of the local financial institutions, it said this was due to several years of reforms, institutional development and capacity building, continuous efforts to enhance corporate governance and risk management standards and practices.
Bank Negara said the level of non-performing loans had also improved to 2.5%. It said the standardised approach of the Basel II capital adequacy framework was implemented effective January 2008.
“There is also ample liquidity in Malaysia’s financial system to facilitate the orderly functioning of economic and financing activities,” it said.
As at end-August 2008, net interbank placements with Bank Negara by the banking system totalled RM198.5bil.
“The banking and insurance industries are therefore operating with adequate capital and liquidity buffers that have been accumulated over several years.
Malaysia’s financial institutions also have negligible exposure to both sub-prime related securities and to the affected financial institutions of other countries, with more than 90% of total assets of the banks and insurance companies in ringgit denominated assets.
Bank Negara also said all foreign financial institutions in Malaysia were locally incorporated and had a high level of capital that is committed to support their domestic operations.
As at end-August 2008, the risk-weighted capital ratio for these foreign financial institutions was at 12.6%.
KUALA LUMPUR: The Malaysian financial system can weather the global financial turmoil and remains resilient, says Bank Negara.
The central bank said on Tuesday that it has a fully developed supervisory and surveillance system. It was also continuously monitors all financial institutions under its purview and will take appropriate action to safeguard the soundness of the financial system.
“The (central) Bank stands ready to provide liquidity, whenever necessary, to financial institutions under its purview. The Bank is also closely engaging with the other monetary authorities in the region to monitor and respond with co-ordinated measures in managing the current challenging environment,” it said.
Commenting on the resilience of the local financial institutions, it said this was due to several years of reforms, institutional development and capacity building, continuous efforts to enhance corporate governance and risk management standards and practices.
Bank Negara said the level of non-performing loans had also improved to 2.5%. It said the standardised approach of the Basel II capital adequacy framework was implemented effective January 2008.
“There is also ample liquidity in Malaysia’s financial system to facilitate the orderly functioning of economic and financing activities,” it said.
As at end-August 2008, net interbank placements with Bank Negara by the banking system totalled RM198.5bil.
“The banking and insurance industries are therefore operating with adequate capital and liquidity buffers that have been accumulated over several years.
Malaysia’s financial institutions also have negligible exposure to both sub-prime related securities and to the affected financial institutions of other countries, with more than 90% of total assets of the banks and insurance companies in ringgit denominated assets.
Bank Negara also said all foreign financial institutions in Malaysia were locally incorporated and had a high level of capital that is committed to support their domestic operations.
As at end-August 2008, the risk-weighted capital ratio for these foreign financial institutions was at 12.6%.
The RM 2.4 billion Telecom HSBB (High Speed Broadband) subsidy
Source MP KitSiang
Why is Telekom subsidised with RM2.4 billion of tax payer’s money for the HSBB project when an alternative proposal do not require subsidy? Why wasn’t there an open tender to choose the best proposal?
Why does the govt think Telekom is the best company to role out HSSB in spite of the fact that Telekom failed to achieve the national objective of high internet penetration after more than 10 years?
Simple economics will tell that a competitive environment will produce the results the country wants.
Besides failure to deliver the numbers (high internet and broadband penetration) and despite the fact that Telekom is a laughing stock because TMnet is well known for bad quality of service, the govt persist to award the next generation broadband project to Telekom.
HSBT (High Speed Broadband Technology Sdn Bhd) has offered to build a similar network without subsidy. Even if the govt deem HSBT inexperienced to carry out such a large project, wouldn’t the fact that their not requiring a subsidy tell them a subsidy may not be required?
Why then does the govt. need to provide public funds especially in this financially troubled time? The money will be better spent on the rakyat.
Since public money is involved, why wasn’t there an open tender? The govt should justify the rationale and provide details.
To make it worse, Telekom’s HSSB network is only a partially open network when it is known globally that such an infrastructure should be open and accessible to other broadband providers such as in S’pore. Furthermore, the govt did not have specific terms for the sharing of the HSSB network with other service providers.
Telekom has said screening will be done to allow competition that adds value to the industry, country and consumer. The term ’screening’ is bad enough while the part on adding value is open to interpretation.
A similar initiative, “Equal access plan for fixed line phone” introduced a decade ago supposedly to encourage competition in the ISP industry failed miserably. It played to Telekom’s hand to stunt the rise of serious competitors.
It is amazing that the govt continued to allow Telekom to use vague words when Telekom has shown this bad faith previously. Doesn’t the govt learn?
In spite of openly talking about increasing internet penetration and quality, the failure of Telekom to deliver still encourages the govt to dish out the same and to support Telekom further. There is no real competition for broadband in the country.
Can anyone say that Telekom’s 95% share of the market shows M’sia has liberalised the broadband service provider industry effectively?
What the country needs to propel itself forward in the information age is true liberalisation and not simply pay lip service to it. The HSSB project awarded to Telekom will only strengthen their already dominant position.
Will the govt force Telekom to adopt open access where any service provider can use the HSSB network to reach their customers when it is constructed? This is the way to create competition to provide the best service at reasonable prices, vital in order to develop the content and IT industry here.
A few questions to conclude:
• Isn’t the RM2.4 billion subsidy unfair, Telekom is already too dominant?
• Why allow Telekom to defer third party full access to the HSSB network for 7 years when Telekom is already the dominant player? It will be their right if they funded it 100% themselves but with public funds, there should be no delay at all.
• Will the govt listen to all stakeholders – the public, IT industry and broadband industry as to the best way forward for the HSSB project through a study because it is now a public project with public funds involved?
• Why is the govt protecting the revenue of one entity Telekom when true liberalisation will develop the industry, potentially returning revenue many times more for the country?
• Will the govt put in a proviso in the agreement with Telekom HSSB project to ensure open access to all service providers at reasonable price that includes annual audit by a third party? Failing this, will the govt ensure since there is interest, for at least one more HSSB provider within a year? Competition must be created.
Why is Telekom subsidised with RM2.4 billion of tax payer’s money for the HSBB project when an alternative proposal do not require subsidy? Why wasn’t there an open tender to choose the best proposal?
Why does the govt think Telekom is the best company to role out HSSB in spite of the fact that Telekom failed to achieve the national objective of high internet penetration after more than 10 years?
Simple economics will tell that a competitive environment will produce the results the country wants.
Besides failure to deliver the numbers (high internet and broadband penetration) and despite the fact that Telekom is a laughing stock because TMnet is well known for bad quality of service, the govt persist to award the next generation broadband project to Telekom.
HSBT (High Speed Broadband Technology Sdn Bhd) has offered to build a similar network without subsidy. Even if the govt deem HSBT inexperienced to carry out such a large project, wouldn’t the fact that their not requiring a subsidy tell them a subsidy may not be required?
Why then does the govt. need to provide public funds especially in this financially troubled time? The money will be better spent on the rakyat.
Since public money is involved, why wasn’t there an open tender? The govt should justify the rationale and provide details.
To make it worse, Telekom’s HSSB network is only a partially open network when it is known globally that such an infrastructure should be open and accessible to other broadband providers such as in S’pore. Furthermore, the govt did not have specific terms for the sharing of the HSSB network with other service providers.
Telekom has said screening will be done to allow competition that adds value to the industry, country and consumer. The term ’screening’ is bad enough while the part on adding value is open to interpretation.
A similar initiative, “Equal access plan for fixed line phone” introduced a decade ago supposedly to encourage competition in the ISP industry failed miserably. It played to Telekom’s hand to stunt the rise of serious competitors.
It is amazing that the govt continued to allow Telekom to use vague words when Telekom has shown this bad faith previously. Doesn’t the govt learn?
In spite of openly talking about increasing internet penetration and quality, the failure of Telekom to deliver still encourages the govt to dish out the same and to support Telekom further. There is no real competition for broadband in the country.
Can anyone say that Telekom’s 95% share of the market shows M’sia has liberalised the broadband service provider industry effectively?
What the country needs to propel itself forward in the information age is true liberalisation and not simply pay lip service to it. The HSSB project awarded to Telekom will only strengthen their already dominant position.
Will the govt force Telekom to adopt open access where any service provider can use the HSSB network to reach their customers when it is constructed? This is the way to create competition to provide the best service at reasonable prices, vital in order to develop the content and IT industry here.
A few questions to conclude:
• Isn’t the RM2.4 billion subsidy unfair, Telekom is already too dominant?
• Why allow Telekom to defer third party full access to the HSSB network for 7 years when Telekom is already the dominant player? It will be their right if they funded it 100% themselves but with public funds, there should be no delay at all.
• Will the govt listen to all stakeholders – the public, IT industry and broadband industry as to the best way forward for the HSSB project through a study because it is now a public project with public funds involved?
• Why is the govt protecting the revenue of one entity Telekom when true liberalisation will develop the industry, potentially returning revenue many times more for the country?
• Will the govt put in a proviso in the agreement with Telekom HSSB project to ensure open access to all service providers at reasonable price that includes annual audit by a third party? Failing this, will the govt ensure since there is interest, for at least one more HSSB provider within a year? Competition must be created.
Petrol prices reduced
Source TheStar
KUALA LUMPUR: Petrol prices will be reduced by a further 10sen to 20sen from Wednesday.
RON 97 petrol is reduced by 15sen to RM2.30; RON 92 petrol is reduced by 10sen to RM2.20; and diesel is reduced by 20sen to RM2.20.
A post on the Prime Minister's Office website (wwww.pmo.gov.my) said the decision was made following the marked drop in the global oil price of late.
"The lowering of the fuel prices is also made to speed up the reduction of retail prices so that the people will be able to enjoy the benefits sooner," the post added.
The statement was signed by Prime Minister Datuk Seri Abdullah Ahmad Badawi.
The previous two reductions were on Aug 23 and Sept 24.
KUALA LUMPUR: Petrol prices will be reduced by a further 10sen to 20sen from Wednesday.
RON 97 petrol is reduced by 15sen to RM2.30; RON 92 petrol is reduced by 10sen to RM2.20; and diesel is reduced by 20sen to RM2.20.
A post on the Prime Minister's Office website (wwww.pmo.gov.my) said the decision was made following the marked drop in the global oil price of late.
"The lowering of the fuel prices is also made to speed up the reduction of retail prices so that the people will be able to enjoy the benefits sooner," the post added.
The statement was signed by Prime Minister Datuk Seri Abdullah Ahmad Badawi.
The previous two reductions were on Aug 23 and Sept 24.
Our strong and weak economic fundamentals
Source MP KitSiang
The Prime Minister, Datuk Seri Abdullah Ahmad Badawi’s repetition that Malaysia will not be hit by global financial meltdown is most disturbing.
Malaysia’s past economic performance was in part linked to high rates of domestic savings and FDI flows. Capital was readily available; it was directed by the state, not necessarily into the most productive sectors. Paul Krugeman, the much acclaimed economist now awarded the 2008 Nobel Prize for Economics, in this analysis about the Malaysian economy had drawn attention to this issue and questioned the capacity of the country to remain competitive.
It is indeed remarkable that no heed was paid this feature of policies. Both in the Mahathir and Abdullah eras the essential economic policies remained unchanged - directed investments into large projects with low returns; a less than transparent and accountable use of national resources thus contributing to the growing level of corruption and abuse.
The exploitation of oil and gas resources in an unaccountable manner led markets to recognize the unsustainable nature of the Malaysian development pattern. Malaysia has in this regard adopted some of the first possible features of the Latin American economic development path. It would appear that no account is being taken of the changed circumstances.
The Second Minister, who must take responsibility for much of preparation of the gravely flawed 2008 budget. It is indeed most troubling that despite the catastrophic developments in the global economic scene in recent weeks continues to mouth statements that Malaysian economic fundamentals remain strong; that Malaysian growth rates will be only marginally lower in the year ahead; in ward FDI flows remain high; foreign exchange levels are sufficient to finance 9 months of imports and thus Malaysia will not feel the full impact of the ongoing crisis.
These and similar statements have been articulated by the Prime Minister and the Deputy Prime Minister. These statements are created with a degree of disbelief by investors and by the markets and rating agencies as they do not deal with the fundamental weaknesses associated with high inflation, a unsustainable budget deficit out flows of capital and a mountain of contingent liabilities made up of guarantees that have been signed as part of the various toll and other concessions.
There is a state of denial and Ministers appear to operate under the assumption that markets and the private sector will accept Ministerial pontifications as the true elaboration of the current economic scene. Further, they assume that upbeat and fanciful statements are sufficient to lull markets. If anything these statements have the opposite effect.
It patently clear to all and sundry that Malaysia is a small economy, open and therefore vulnerable to developments in the global economy. It is not insulated or protected; it is dependent on inflows of FDI; its growth and prosperity are linked to exports of commodities and manufactures; demand and price developments in the global markets have a direct impact on output growth, employment and prosperity.
Given these circumstances, the current global crisis will inevitably impact on the flows of FDI, the demand for its exports ( both manufactures and commodities), a deterioration in export prices. These externally generated impulses will inevitably be transmitted into the domestic economy and result in lower growth, a worsened labor market and a decline in consumption. In brief, Malaysia faces a severe and bleak economic outlook.
The danger to the economy is even greater when account is taken of the already poor economic fundamentals represented by:
• The highest rate of inflation experienced (8.5%) over the past quarter century;
• An unsustainable fiscal deficit projected at 4.8% this year and 3.6 next year both of which are going to be higher;
• Billions of dollars of hidden contingent liabilities - akin to IOUs written to GLCs, crony corporations; an unendingly flow of subsidies to private entities that believe in the notion that profits can be privatized while losses are to be nationalized;
• An interest policy that has been irresponsible and largely favored to help over-leveraged “friends” of the BN and to keep Government borrowing costs low;
• A manipulated and less than transparent exchange rate policy that has contributed to imported inflation;
• The policy of “no bid” award of tenders and projects to BN connected companies and contractors that has contributed to increased project costs;
• The loss of competitiveness through corruption and more governance; and
• Credit rating agencies had lowered Malaysia’s ratings
This list is not exhaustive but indicative of how the economic fundamentals have deteriorated in the recent past.
The Prime Minister, Datuk Seri Abdullah Ahmad Badawi’s repetition that Malaysia will not be hit by global financial meltdown is most disturbing.
Malaysia’s past economic performance was in part linked to high rates of domestic savings and FDI flows. Capital was readily available; it was directed by the state, not necessarily into the most productive sectors. Paul Krugeman, the much acclaimed economist now awarded the 2008 Nobel Prize for Economics, in this analysis about the Malaysian economy had drawn attention to this issue and questioned the capacity of the country to remain competitive.
It is indeed remarkable that no heed was paid this feature of policies. Both in the Mahathir and Abdullah eras the essential economic policies remained unchanged - directed investments into large projects with low returns; a less than transparent and accountable use of national resources thus contributing to the growing level of corruption and abuse.
The exploitation of oil and gas resources in an unaccountable manner led markets to recognize the unsustainable nature of the Malaysian development pattern. Malaysia has in this regard adopted some of the first possible features of the Latin American economic development path. It would appear that no account is being taken of the changed circumstances.
The Second Minister, who must take responsibility for much of preparation of the gravely flawed 2008 budget. It is indeed most troubling that despite the catastrophic developments in the global economic scene in recent weeks continues to mouth statements that Malaysian economic fundamentals remain strong; that Malaysian growth rates will be only marginally lower in the year ahead; in ward FDI flows remain high; foreign exchange levels are sufficient to finance 9 months of imports and thus Malaysia will not feel the full impact of the ongoing crisis.
These and similar statements have been articulated by the Prime Minister and the Deputy Prime Minister. These statements are created with a degree of disbelief by investors and by the markets and rating agencies as they do not deal with the fundamental weaknesses associated with high inflation, a unsustainable budget deficit out flows of capital and a mountain of contingent liabilities made up of guarantees that have been signed as part of the various toll and other concessions.
There is a state of denial and Ministers appear to operate under the assumption that markets and the private sector will accept Ministerial pontifications as the true elaboration of the current economic scene. Further, they assume that upbeat and fanciful statements are sufficient to lull markets. If anything these statements have the opposite effect.
It patently clear to all and sundry that Malaysia is a small economy, open and therefore vulnerable to developments in the global economy. It is not insulated or protected; it is dependent on inflows of FDI; its growth and prosperity are linked to exports of commodities and manufactures; demand and price developments in the global markets have a direct impact on output growth, employment and prosperity.
Given these circumstances, the current global crisis will inevitably impact on the flows of FDI, the demand for its exports ( both manufactures and commodities), a deterioration in export prices. These externally generated impulses will inevitably be transmitted into the domestic economy and result in lower growth, a worsened labor market and a decline in consumption. In brief, Malaysia faces a severe and bleak economic outlook.
The danger to the economy is even greater when account is taken of the already poor economic fundamentals represented by:
• The highest rate of inflation experienced (8.5%) over the past quarter century;
• An unsustainable fiscal deficit projected at 4.8% this year and 3.6 next year both of which are going to be higher;
• Billions of dollars of hidden contingent liabilities - akin to IOUs written to GLCs, crony corporations; an unendingly flow of subsidies to private entities that believe in the notion that profits can be privatized while losses are to be nationalized;
• An interest policy that has been irresponsible and largely favored to help over-leveraged “friends” of the BN and to keep Government borrowing costs low;
• A manipulated and less than transparent exchange rate policy that has contributed to imported inflation;
• The policy of “no bid” award of tenders and projects to BN connected companies and contractors that has contributed to increased project costs;
• The loss of competitiveness through corruption and more governance; and
• Credit rating agencies had lowered Malaysia’s ratings
This list is not exhaustive but indicative of how the economic fundamentals have deteriorated in the recent past.
Prepare to lose jobs in Singapore
Source TheStar
SINGAPORE: The 300,000 Malaysians employed in the island republic have been advised to gear up for retrenchment if the country continues to slide into a recession.
Human Resources Minister Datuk Dr S. Subramaniam said that although the technical recession experienced by Singapore has not yet translated into unemployment, it was better for Malaysians to be prepared.
“If there is unemployment due to a recession, our workers will be hit,” he told The Star here yesterday.
“They need to work on retraining and acquiring new skills to ensure they have jobs during such times.”
He said that Malaysians accounted for about 30% of the foreign workforce in Singapore.
Dr Subramaniam said that many of the Malaysian workers in Singapore were unskilled and employed in the manufacturing sector.
Asked about whether the ministry had a contingency plan for such a situation in Malaysia, he said that Malaysia would have excess job vacancies as work presently being done by foreigners could be offered to locals instead.
According to economic data released by Singapore’s Ministry of Trade and Industry, the island republic will be the first Asian economy to fall into a technical recession.
A technical recession is generally defined as two consecutive quarters of contraction in economic output.
Dr Subramaniam, after an hour-long meeting with his Singapore counterpart Gan Kim Yong, said they had discussed various issues.
On instances of Malaysian workers being cheated in Singapore, he said that the Malaysian High Commission had received 1,250 complaints within the first nine months of this year.
Dr Subramaniam added that there was something wrong with the recruitment mechanism and the ministry would have to check on the matter.
SINGAPORE: The 300,000 Malaysians employed in the island republic have been advised to gear up for retrenchment if the country continues to slide into a recession.
Human Resources Minister Datuk Dr S. Subramaniam said that although the technical recession experienced by Singapore has not yet translated into unemployment, it was better for Malaysians to be prepared.
“If there is unemployment due to a recession, our workers will be hit,” he told The Star here yesterday.
“They need to work on retraining and acquiring new skills to ensure they have jobs during such times.”
He said that Malaysians accounted for about 30% of the foreign workforce in Singapore.
Dr Subramaniam said that many of the Malaysian workers in Singapore were unskilled and employed in the manufacturing sector.
Asked about whether the ministry had a contingency plan for such a situation in Malaysia, he said that Malaysia would have excess job vacancies as work presently being done by foreigners could be offered to locals instead.
According to economic data released by Singapore’s Ministry of Trade and Industry, the island republic will be the first Asian economy to fall into a technical recession.
A technical recession is generally defined as two consecutive quarters of contraction in economic output.
Dr Subramaniam, after an hour-long meeting with his Singapore counterpart Gan Kim Yong, said they had discussed various issues.
On instances of Malaysian workers being cheated in Singapore, he said that the Malaysian High Commission had received 1,250 complaints within the first nine months of this year.
Dr Subramaniam added that there was something wrong with the recruitment mechanism and the ministry would have to check on the matter.
Thai troops deployed to cope with Cambodia
Source CTCentral
PHNOM PENH, Cambodia (AP) -- Thailand vowed it was ready to respond militarily if attacked by Cambodia after its smaller neighbor issued an ultimatum for Thai troops to pull back from disputed border territory by midday Tuesday.
Thailand moved more troops to an area nearby late Tuesday, but strictly as a defensive measure, said a senior Thai army officer.
The troops on both sides remained only about 100 yards apart, said Gen. Viboonsak Neepan, the Thai Army commander for the region.
"We have sent more troops to be stationed near the area but only enough to resist (an attack). We will not attack first," Viboonsak said. He did not specify how many troops were sent.
Despite increasingly heated rhetoric - including a description by Cambodia's prime minister of the contested land as "a life-and-death battle zone" - fighting did not break out, although the two countries disagreed on who backed down.
Thailand's prime minister said his country's troops had been on their own territory all along.
"If there is a problem, we will use peaceful means with an emphasis on negotiations," said Thai Prime Minister Somchai Wongsawat. "We will not be an invader." Somchai is also under intense political pressure at home from anti-government militants seeking his resignation.
The dispute is over the land around Preah Vihear, an 11th century temple long claimed by both countries but awarded to Cambodia by the World Court in 1962. Sovereignty over some of the land around the temple has not been clearly resolved.
Cambodian Prime Minister Hun Sen said Tuesday morning that Thai troops had tried a day earlier to advance into Cambodia's territory but Cambodian soldiers "waved them back and said, 'If you want to die, keep coming.'"
"They must withdraw," Hun Sen said in a speech in the capital, Phnom Penh. "I have set the timeline for them to withdraw by 12 o'clock."
Cambodian army commander Brig. Gen. Yim Pim later said all Thai troops had retreated about 90 minutes ahead of the deadline and were back inside their camp about half a mile from the contested territory.
"The tense situation has now eased," Yim Pim told The Associated Press.
PHNOM PENH, Cambodia (AP) -- Thailand vowed it was ready to respond militarily if attacked by Cambodia after its smaller neighbor issued an ultimatum for Thai troops to pull back from disputed border territory by midday Tuesday.
Thailand moved more troops to an area nearby late Tuesday, but strictly as a defensive measure, said a senior Thai army officer.
The troops on both sides remained only about 100 yards apart, said Gen. Viboonsak Neepan, the Thai Army commander for the region.
"We have sent more troops to be stationed near the area but only enough to resist (an attack). We will not attack first," Viboonsak said. He did not specify how many troops were sent.
Despite increasingly heated rhetoric - including a description by Cambodia's prime minister of the contested land as "a life-and-death battle zone" - fighting did not break out, although the two countries disagreed on who backed down.
Thailand's prime minister said his country's troops had been on their own territory all along.
"If there is a problem, we will use peaceful means with an emphasis on negotiations," said Thai Prime Minister Somchai Wongsawat. "We will not be an invader." Somchai is also under intense political pressure at home from anti-government militants seeking his resignation.
The dispute is over the land around Preah Vihear, an 11th century temple long claimed by both countries but awarded to Cambodia by the World Court in 1962. Sovereignty over some of the land around the temple has not been clearly resolved.
Cambodian Prime Minister Hun Sen said Tuesday morning that Thai troops had tried a day earlier to advance into Cambodia's territory but Cambodian soldiers "waved them back and said, 'If you want to die, keep coming.'"
"They must withdraw," Hun Sen said in a speech in the capital, Phnom Penh. "I have set the timeline for them to withdraw by 12 o'clock."
Cambodian army commander Brig. Gen. Yim Pim later said all Thai troops had retreated about 90 minutes ahead of the deadline and were back inside their camp about half a mile from the contested territory.
"The tense situation has now eased," Yim Pim told The Associated Press.
Credit crisis casts gloom over China's exporters
Source AzFamily
BEIJING (AP) -- As they prepare for China's biggest export fair this week, managers at Shunde Xiongfeng Electric Industrial Co. are anxious.
Sales of electric fans are down this year, and the financial crisis will likely further cut demand from overseas. The 5,000-employee company in the southern city of Shunde, near Hong Kong, sold 6 million electric fans abroad last year.
"We are worried that if our clients are short of capital, they might shut down," said Shunde's export manager, who would only give his surname, Zeng. "That's certainly bad for us."
China has been known as the world's factory for everything from toys to T-shirts, and exports have powered its growth in recent years. But exports are taking a hit from the global financial crisis because of lower demand from overseas and tightening credit from state-owned banks.
A slowdown in Chinese exports would ripple through the world economy as China imports fewer raw materials, half-finished goods for assembly and supplies, such as Australian iron ore or factory equipment from the United States, Europe and Japan. Raw materials used for exports made up half of China's nearly US$1 trillion in imports last year.
China's economy is still expected to expand by at least 9 percent this year, and its banks are flush with cash and hold little risky debt. But its economy has been weakened by a bursting housing bubble and an anemic stock market, and the hope that China's appetite for imports will rescue other countries has been tempered. China accounted for a third of global economic growth in 2007, according to the World Bank.
"We still believe that China's growth will be relatively robust. That is helpful for the world economy," said Louis Kuijs, the World Bank's senior economist in Beijing. "Unfortunately, one economy like China will not be enough to keep world growth going....China just isn't big enough."
The Canton Fair, which opens Wednesday, will offer a measure of demand for Chinese goods, as exporters and customers gather in Guangzhou, the heart of China's export-driven manufacturing industries. Philip Richardson, an American who manufactures high-end stereo speakers in Guangzhou, said orders from the U.S. have dropped over the past two weeks.
"When they see the markets go down, they stop buying," he said.
Customers have canceled meetings with him at a Hong Kong trade show next week. Nine of 12 retailers have backed out of visits to his factory in the past two weeks. And as he stood talking, Richardson received a phone call from the Chinese vendor who makes his stereo cabinets. The vendor said he had lost so many orders that he could not pay his employees, and asked Richardson to pay early on a bill due next month.
The financial crisis is the latest blow in an export situation that was already weakening along with the U.S. and European economies. According to customs figures, the growth rate for China's exports in the first quarter of the year declined for the first time in three years. Exports make up just 5 percent of China's economic output, but account for about 20 percent of growth.
Foreign sales of Chinese-made electric fans fell 21 percent in July from the same month last year, according the Chinese Household Electric Appliance Association. In a survey last month, the central bank said export orders at Chinese factories had fallen to their lowest level since 2005. One of the country's largest garment makers, Zhejiang Jianglong Textile Printing and Dying Co., went bankrupt last week.
"I don't think the economy has troughed," said Tao Wang, a UBS economist in Beijing. "That will affect China's demand for commodities, machinery and so on. In the next six months, I think imports from all these countries will slow."
The Tianjin Excellent Import & Export Co. southeast of Beijing expects this year's sales to drop to half the 2007 level of US$50 million. The company is trying to boost sales to Japan and other markets and might have to fire some of its 100 employees, its manager said.
"We don't have a better strategy yet to maintain the business," said the manager, who would only give his last name, Yang. "If we export US$1 million and need 50 people, then that falls to $10,000, you can do the math."
Exporters are also having a harder time getting credit because China's state-owned banks are trying to cut loans to companies with exposure to foreign risks, said Nan Hanxin, a banking industry analyst for Central China Securities. They now favor monopoly state-owned companies with high credit, Nan said.
The weakening of exports from China is showing up in fewer purchases of raw materials from other countries. China's appliance makers buy so much wire that a fall in export demand has led to a 23 percent drop in global copper prices since July, according to Standard Chartered Bank.
China's imports are also hurt by a slowdown in its domestic market. As both real estate and stock market values have declined, consumers are no longer as able or willing to spend on big-ticket items, auto market research firm J.D. Power and Associates said in a report.
For example, automakers counted on China to drive revenues as sales dropped in North America and Europe. But sales of Ford Motor Co. vehicles in China dropped 28 percent in August from the same month last year, while Volkswagen AG was down 20 percent and General Motors Corp. was off 16 percent, according to J.D. Power.
Slower real estate sales have cut demand for steel. Four major Chinese steel mills are responding by cutting output 20 percent, the government newspaper China Securities Journal said. That in turn erodes demand for iron ore.
Last year, the Canton Fair drew 190,000 buyers from 200 countries. But this year Shi Hong, general manager at a bicycle exporter, plans to skip the fair for a sales trip to Europe.
Shi said orders are down and retailers in Britain and France have put off submitting sales forecasts.
"We've already cut our costs," he said. "We fired three employees, one-fifth of our team."
BEIJING (AP) -- As they prepare for China's biggest export fair this week, managers at Shunde Xiongfeng Electric Industrial Co. are anxious.
Sales of electric fans are down this year, and the financial crisis will likely further cut demand from overseas. The 5,000-employee company in the southern city of Shunde, near Hong Kong, sold 6 million electric fans abroad last year.
"We are worried that if our clients are short of capital, they might shut down," said Shunde's export manager, who would only give his surname, Zeng. "That's certainly bad for us."
China has been known as the world's factory for everything from toys to T-shirts, and exports have powered its growth in recent years. But exports are taking a hit from the global financial crisis because of lower demand from overseas and tightening credit from state-owned banks.
A slowdown in Chinese exports would ripple through the world economy as China imports fewer raw materials, half-finished goods for assembly and supplies, such as Australian iron ore or factory equipment from the United States, Europe and Japan. Raw materials used for exports made up half of China's nearly US$1 trillion in imports last year.
China's economy is still expected to expand by at least 9 percent this year, and its banks are flush with cash and hold little risky debt. But its economy has been weakened by a bursting housing bubble and an anemic stock market, and the hope that China's appetite for imports will rescue other countries has been tempered. China accounted for a third of global economic growth in 2007, according to the World Bank.
"We still believe that China's growth will be relatively robust. That is helpful for the world economy," said Louis Kuijs, the World Bank's senior economist in Beijing. "Unfortunately, one economy like China will not be enough to keep world growth going....China just isn't big enough."
The Canton Fair, which opens Wednesday, will offer a measure of demand for Chinese goods, as exporters and customers gather in Guangzhou, the heart of China's export-driven manufacturing industries. Philip Richardson, an American who manufactures high-end stereo speakers in Guangzhou, said orders from the U.S. have dropped over the past two weeks.
"When they see the markets go down, they stop buying," he said.
Customers have canceled meetings with him at a Hong Kong trade show next week. Nine of 12 retailers have backed out of visits to his factory in the past two weeks. And as he stood talking, Richardson received a phone call from the Chinese vendor who makes his stereo cabinets. The vendor said he had lost so many orders that he could not pay his employees, and asked Richardson to pay early on a bill due next month.
The financial crisis is the latest blow in an export situation that was already weakening along with the U.S. and European economies. According to customs figures, the growth rate for China's exports in the first quarter of the year declined for the first time in three years. Exports make up just 5 percent of China's economic output, but account for about 20 percent of growth.
Foreign sales of Chinese-made electric fans fell 21 percent in July from the same month last year, according the Chinese Household Electric Appliance Association. In a survey last month, the central bank said export orders at Chinese factories had fallen to their lowest level since 2005. One of the country's largest garment makers, Zhejiang Jianglong Textile Printing and Dying Co., went bankrupt last week.
"I don't think the economy has troughed," said Tao Wang, a UBS economist in Beijing. "That will affect China's demand for commodities, machinery and so on. In the next six months, I think imports from all these countries will slow."
The Tianjin Excellent Import & Export Co. southeast of Beijing expects this year's sales to drop to half the 2007 level of US$50 million. The company is trying to boost sales to Japan and other markets and might have to fire some of its 100 employees, its manager said.
"We don't have a better strategy yet to maintain the business," said the manager, who would only give his last name, Yang. "If we export US$1 million and need 50 people, then that falls to $10,000, you can do the math."
Exporters are also having a harder time getting credit because China's state-owned banks are trying to cut loans to companies with exposure to foreign risks, said Nan Hanxin, a banking industry analyst for Central China Securities. They now favor monopoly state-owned companies with high credit, Nan said.
The weakening of exports from China is showing up in fewer purchases of raw materials from other countries. China's appliance makers buy so much wire that a fall in export demand has led to a 23 percent drop in global copper prices since July, according to Standard Chartered Bank.
China's imports are also hurt by a slowdown in its domestic market. As both real estate and stock market values have declined, consumers are no longer as able or willing to spend on big-ticket items, auto market research firm J.D. Power and Associates said in a report.
For example, automakers counted on China to drive revenues as sales dropped in North America and Europe. But sales of Ford Motor Co. vehicles in China dropped 28 percent in August from the same month last year, while Volkswagen AG was down 20 percent and General Motors Corp. was off 16 percent, according to J.D. Power.
Slower real estate sales have cut demand for steel. Four major Chinese steel mills are responding by cutting output 20 percent, the government newspaper China Securities Journal said. That in turn erodes demand for iron ore.
Last year, the Canton Fair drew 190,000 buyers from 200 countries. But this year Shi Hong, general manager at a bicycle exporter, plans to skip the fair for a sales trip to Europe.
Shi said orders are down and retailers in Britain and France have put off submitting sales forecasts.
"We've already cut our costs," he said. "We fired three employees, one-fifth of our team."
Roubini Sees Worst Recession in 40 Years, Rally's End
Source RGE Monitor
Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to ``sputter.''
``There are significant downside risks still to the market and the economy,'' Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. ``We're going to be surprised by the severity of the recession and the severity of the financial losses.''
The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added. Treasury Secretary Henry Paulson said today he plans to use $250 billion of taxpayer funds to purchase equity in thousands of financial firms to halt a credit freeze that threatened to drive companies into bankruptcy and eliminate jobs.
``This will be the first round of recapitalization of the banks,'' Roubini said. ``The government has to decide to intervene much more directly in the provision of credit and the management of these companies.''
U.S. stocks staged the biggest rally in seven decades yesterday on the government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. The Standard & Poor's 500 Index rose 12 percent. It gained as much as 4.1 percent and fell as much as 1.1 percent today.
`Really Tanking'
``The stock market is going to stop rallying soon enough when they see the economy is really tanking right now,'' Roubini added.
The U.S. unemployment rate stood at a five-year high of 6.1 percent last month. Home prices in 20 U.S. metropolitan areas fell 16 percent in July from a year earlier, the most since records began in 2001, according to the S&P/Case-Shiller home- price index. Bank seizures may push home prices down further, scaring away buyers in coming months, after U.S. foreclosures rose at the fastest rate in almost three decades in the second quarter, according to the Mortgage Bankers Association.
Roubini said total credit losses resulting from the meltdown of the subprime mortgage market will be ``closer to $3 trillion,'' up from his previous estimate of $1 trillion to $2 trillion. The International Monetary Fund estimated $1.4 trillion on Oct. 7. Financial firms have so far reported $637 billion in losses, according to data compiled by Bloomberg.
Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to ``sputter.''
``There are significant downside risks still to the market and the economy,'' Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. ``We're going to be surprised by the severity of the recession and the severity of the financial losses.''
The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added. Treasury Secretary Henry Paulson said today he plans to use $250 billion of taxpayer funds to purchase equity in thousands of financial firms to halt a credit freeze that threatened to drive companies into bankruptcy and eliminate jobs.
``This will be the first round of recapitalization of the banks,'' Roubini said. ``The government has to decide to intervene much more directly in the provision of credit and the management of these companies.''
U.S. stocks staged the biggest rally in seven decades yesterday on the government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. The Standard & Poor's 500 Index rose 12 percent. It gained as much as 4.1 percent and fell as much as 1.1 percent today.
`Really Tanking'
``The stock market is going to stop rallying soon enough when they see the economy is really tanking right now,'' Roubini added.
The U.S. unemployment rate stood at a five-year high of 6.1 percent last month. Home prices in 20 U.S. metropolitan areas fell 16 percent in July from a year earlier, the most since records began in 2001, according to the S&P/Case-Shiller home- price index. Bank seizures may push home prices down further, scaring away buyers in coming months, after U.S. foreclosures rose at the fastest rate in almost three decades in the second quarter, according to the Mortgage Bankers Association.
Roubini said total credit losses resulting from the meltdown of the subprime mortgage market will be ``closer to $3 trillion,'' up from his previous estimate of $1 trillion to $2 trillion. The International Monetary Fund estimated $1.4 trillion on Oct. 7. Financial firms have so far reported $637 billion in losses, according to data compiled by Bloomberg.
Measures to strengthen economy to be announced Monday
Source The Star
KUALA LUMPUR: The Government will announce on Monday a new set of measures to strengthen the economy in light of the global economic crisis, Finance Minister Datuk Seri Najib Tun Razak said.
Speaking to reporters Tuesday in his Parliament office, Najib said the measures which will come in the form of a stabilisation plan is being worked on currently and was discussed by the National Economic Action Council on Monday.
“I want to assure the public that the Government is on top of the situation. Although it is serious, there is no need for us to panic,” he said.
Najib said Malaysia was not as bad as other countries but admitted that the global economic crisis would certainly impact negatively on the economy.
“As far as we are concerned, this year we should attain the 5% growth we expect. We are also not facing recession this year. Next year we will have to look at the figures again and some of the figures will be revised.”
Najib said however it did not necessitate the retabling of a new Budget as was suggested by Opposition Leader Datuk Seri Anwar Ibrahim.
“That proposal is not an appropriate one to tackle the crisis. Some of the figures in the Budget may have changed, but it is not necessary to retable the Budget.
“What is important is that government spending continues so that it creates domestic growth and consumption while all programmes to help the poor and low income groups are carried out as scheduled.”
Najib said the current Budget should be passed by Parliament as it contains positive measures to help the rakyat.
On whether the Government could still meet the 4.8% budget deficit considering the reduction of crude oil and palm oil prices, Najib said the figures would be revised at the appropriate time.
When asked whether interest rates would be lowered, Najib said it was not his policy to interfere in that and that he would leave it up to Bank Negara to decide.
“Depositors should not worry about their money in the bank as there is enough liquidity in the banking system,” he said when asked whether there was a need to guarantee bank deposits.
KUALA LUMPUR: The Government will announce on Monday a new set of measures to strengthen the economy in light of the global economic crisis, Finance Minister Datuk Seri Najib Tun Razak said.
Speaking to reporters Tuesday in his Parliament office, Najib said the measures which will come in the form of a stabilisation plan is being worked on currently and was discussed by the National Economic Action Council on Monday.
“I want to assure the public that the Government is on top of the situation. Although it is serious, there is no need for us to panic,” he said.
Najib said Malaysia was not as bad as other countries but admitted that the global economic crisis would certainly impact negatively on the economy.
“As far as we are concerned, this year we should attain the 5% growth we expect. We are also not facing recession this year. Next year we will have to look at the figures again and some of the figures will be revised.”
Najib said however it did not necessitate the retabling of a new Budget as was suggested by Opposition Leader Datuk Seri Anwar Ibrahim.
“That proposal is not an appropriate one to tackle the crisis. Some of the figures in the Budget may have changed, but it is not necessary to retable the Budget.
“What is important is that government spending continues so that it creates domestic growth and consumption while all programmes to help the poor and low income groups are carried out as scheduled.”
Najib said the current Budget should be passed by Parliament as it contains positive measures to help the rakyat.
On whether the Government could still meet the 4.8% budget deficit considering the reduction of crude oil and palm oil prices, Najib said the figures would be revised at the appropriate time.
When asked whether interest rates would be lowered, Najib said it was not his policy to interfere in that and that he would leave it up to Bank Negara to decide.
“Depositors should not worry about their money in the bank as there is enough liquidity in the banking system,” he said when asked whether there was a need to guarantee bank deposits.
Mideast grapples with oil price slump
Source AzFamily
CAIRO, Egypt (AP) -- Vast, oil-fueled budget surpluses may cushion some of the Mideast's major oil-producing countries now that crude prices have plummeted. But Iran, Iraq and a handful of other nations face daunting challenges to make up the money in coming months because of the price drop and global financial crisis.
The differences are stark: developers in the United Arab Emirates - whose economy is more diversified - are still announcing multibillion-dollar building projects. But merchants in Iran went on strike the past few days over tax increases imposed to bolster the country's budget.
In Iraq, postwar rebuilding could be jeopardized if the vaunted oil-money budget surplus is smaller than expected; countries like Saudi Arabia may only need to trim more ambitious projects.
"The Gulf countries have enough reserves to get through rougher periods, and have based their budgets on oil prices lower than what we see today. But poorer countries like Egypt ... don't have those kinds of reserves," said Jon Alterman, Mideast program head for the Washington-based Center for Strategic and International Studies.
As for Iran, the drop in oil revenue is likely to cause that country and its hard-line president even more economic headaches, heading into presidential elections next June. But few think, despite the recent strikes, that any political upheaval is at hand.
"Oil at $70 per barrel doesn't threaten (President Mahmoud) Ahmadinejad's hold on power," said Alterman. "Twenty dollar per barrel oil does."
Oil was trading at about $81 per barrel Tuesday in New York, well off the record high of $147 per barrel in July that allowed Mideast OPEC members to see revenues surge.
OPEC's more hawkish Mideast members, like Iran, are heading into a November meeting - to be convened a month before a previously planned meeting is due to be held - with sights set on securing an output cut. Iran has previously said it would like to see prices remain at $100 per barrel - a level few, if any, believe is currently sustainable.
Equally questionable is whether the cartel will definitely cut production, said Serene Gardiner, oil products analyst for Standard Chartered bank in Dubai.
"They're vigorously going to defend the $80 mark, but they're not going to call for $100," Gardiner said. "There's no point in pushing for something you'll never get."
More dovish members - namely Saudi Arabia, the cartel's kingpin and the world's largest exporter - are mindful that a repeat of the surging prices earlier this year could exacerbate demand erosion, particularly in the West, further fueling cuts in consumer spending and deepening the current financial crunch.
Iran's push, however, is understandable.
The Tehran government relies on energy exports for about 80 percent of its income - a level Ahmadinejad wants to sustain because of Iran's international isolation, caused by the dispute with the West over its nuclear program.
The slump in oil prices comes at a particularly unfortunate time for Ahmadinejad, whose economic policies have many Iranians seething even as he looks to muster support ahead of next year's elections.
Scores of the country's merchants went on strike last week in protest over a 3 percent sales tax the government introduced in September. Iran's merchant class played a major role in supporting the radical students who toppled the Western-backed Shah in the 1979 Islamic Revolution.
Bowing to pressure, the government agreed to suspend the tax. The strike, however, continued.
Officially, Iran is playing down the impact of the oil price fall: the IRNA news agency quoted an official in Ahmadinejad's office as saying the country had based its budget on crude between $55-$60 and that recent declines "will not affect our annual budget."
Iraq, however - struggling to rebuild - could see its hoped-for revenue drop even as it sits atop the world's third largest crude reserves.
A U.S. congressional auditors report found the Iraqi government could end this year with a budget surplus of as much as $79 billion, causing many Americans to fume since the U.S. has been pumping hundreds of billions into the country.
But that number now seems unlikely. Iraqi Finance Minister Bayan Jabr said recently said that the decline in oil prices "no doubt will have a negative impact on Iraq's economy." Other Iraqi officials say they are studying the impact on their spending plans, but so far, nothing firm has been decided.
Other countries face more mixed pictures.
A recent report by the National Bank of Kuwait warned that if spending remains high in the 2009-2010 budget year, that country's budget "could slip into deficit for the first time in 11 years" but would likely return to surplus the next year.
In Saudi Arabia, oil revenues contribute about 54 percent of the country's GDP, according to several analysts.
The kingdom earned $244 billion in the first three quarters of 2008, compared to $194 billion in all of 2007, according to the Short-Term Energy Outlook by the Energy Information Administration, the U.S. Energy Department's statistical arm.
Because of the recent drop, Saudi Arabia could face difficulty carrying out planned projects critical to its push to diversify.
But few analysts are ready to sound the sirens, at least about Saudi Arabia and the UAE - which brought in $78 billion in the first nine months of 2008, according to the EIA report.
The cautious optimism largely stems from the fact that Mideast OPEC members pegged their budgets to lower oil prices.
Marios Maratheftis, Standard Chartered's head of research for the Middle East, North Africa and Pakistan, estimates the UAE government budget is based on a price assumption of $45 to $50 a barrel. Other estimates suggest that UAE, which draws income from vast foreign investments, could cover costs even at lower prices.
"There is a huge cash cushion that the government enjoys," he said.
CAIRO, Egypt (AP) -- Vast, oil-fueled budget surpluses may cushion some of the Mideast's major oil-producing countries now that crude prices have plummeted. But Iran, Iraq and a handful of other nations face daunting challenges to make up the money in coming months because of the price drop and global financial crisis.
The differences are stark: developers in the United Arab Emirates - whose economy is more diversified - are still announcing multibillion-dollar building projects. But merchants in Iran went on strike the past few days over tax increases imposed to bolster the country's budget.
In Iraq, postwar rebuilding could be jeopardized if the vaunted oil-money budget surplus is smaller than expected; countries like Saudi Arabia may only need to trim more ambitious projects.
"The Gulf countries have enough reserves to get through rougher periods, and have based their budgets on oil prices lower than what we see today. But poorer countries like Egypt ... don't have those kinds of reserves," said Jon Alterman, Mideast program head for the Washington-based Center for Strategic and International Studies.
As for Iran, the drop in oil revenue is likely to cause that country and its hard-line president even more economic headaches, heading into presidential elections next June. But few think, despite the recent strikes, that any political upheaval is at hand.
"Oil at $70 per barrel doesn't threaten (President Mahmoud) Ahmadinejad's hold on power," said Alterman. "Twenty dollar per barrel oil does."
Oil was trading at about $81 per barrel Tuesday in New York, well off the record high of $147 per barrel in July that allowed Mideast OPEC members to see revenues surge.
OPEC's more hawkish Mideast members, like Iran, are heading into a November meeting - to be convened a month before a previously planned meeting is due to be held - with sights set on securing an output cut. Iran has previously said it would like to see prices remain at $100 per barrel - a level few, if any, believe is currently sustainable.
Equally questionable is whether the cartel will definitely cut production, said Serene Gardiner, oil products analyst for Standard Chartered bank in Dubai.
"They're vigorously going to defend the $80 mark, but they're not going to call for $100," Gardiner said. "There's no point in pushing for something you'll never get."
More dovish members - namely Saudi Arabia, the cartel's kingpin and the world's largest exporter - are mindful that a repeat of the surging prices earlier this year could exacerbate demand erosion, particularly in the West, further fueling cuts in consumer spending and deepening the current financial crunch.
Iran's push, however, is understandable.
The Tehran government relies on energy exports for about 80 percent of its income - a level Ahmadinejad wants to sustain because of Iran's international isolation, caused by the dispute with the West over its nuclear program.
The slump in oil prices comes at a particularly unfortunate time for Ahmadinejad, whose economic policies have many Iranians seething even as he looks to muster support ahead of next year's elections.
Scores of the country's merchants went on strike last week in protest over a 3 percent sales tax the government introduced in September. Iran's merchant class played a major role in supporting the radical students who toppled the Western-backed Shah in the 1979 Islamic Revolution.
Bowing to pressure, the government agreed to suspend the tax. The strike, however, continued.
Officially, Iran is playing down the impact of the oil price fall: the IRNA news agency quoted an official in Ahmadinejad's office as saying the country had based its budget on crude between $55-$60 and that recent declines "will not affect our annual budget."
Iraq, however - struggling to rebuild - could see its hoped-for revenue drop even as it sits atop the world's third largest crude reserves.
A U.S. congressional auditors report found the Iraqi government could end this year with a budget surplus of as much as $79 billion, causing many Americans to fume since the U.S. has been pumping hundreds of billions into the country.
But that number now seems unlikely. Iraqi Finance Minister Bayan Jabr said recently said that the decline in oil prices "no doubt will have a negative impact on Iraq's economy." Other Iraqi officials say they are studying the impact on their spending plans, but so far, nothing firm has been decided.
Other countries face more mixed pictures.
A recent report by the National Bank of Kuwait warned that if spending remains high in the 2009-2010 budget year, that country's budget "could slip into deficit for the first time in 11 years" but would likely return to surplus the next year.
In Saudi Arabia, oil revenues contribute about 54 percent of the country's GDP, according to several analysts.
The kingdom earned $244 billion in the first three quarters of 2008, compared to $194 billion in all of 2007, according to the Short-Term Energy Outlook by the Energy Information Administration, the U.S. Energy Department's statistical arm.
Because of the recent drop, Saudi Arabia could face difficulty carrying out planned projects critical to its push to diversify.
But few analysts are ready to sound the sirens, at least about Saudi Arabia and the UAE - which brought in $78 billion in the first nine months of 2008, according to the EIA report.
The cautious optimism largely stems from the fact that Mideast OPEC members pegged their budgets to lower oil prices.
Marios Maratheftis, Standard Chartered's head of research for the Middle East, North Africa and Pakistan, estimates the UAE government budget is based on a price assumption of $45 to $50 a barrel. Other estimates suggest that UAE, which draws income from vast foreign investments, could cover costs even at lower prices.
"There is a huge cash cushion that the government enjoys," he said.
Rudd unveils $10.4b stimulus plan
Source The Age
The Federal Government will pump $10.4 billion into the economy in a bid to prevent Australia sliding into a recession.
Prime Minister Kevin Rudd and Treasurer Wayne Swan unveiled the emergency spending plan, which includes pre-Christmas payments of $4.8 billion for pensioners, $3.9 billion in support for families, and $1.5 billion for first-home buyers - delivering benefits to millions of Australians.
- $4.8b down payment to pensioners, payable in December.
- $3.9b in support payments for families.
- $1.5b for first home buyers.
- $187m to create new training positions
- Budget to remain in surplus.
"It's very important to act early and decisively,'' Mr Rudd told a press conference. ''At a time when economies need stimulus support, don't leave it till too late.''
The housing sector is a major beneficiary. The Government will triple to $21,000 the current $7,000 first-home buyers grant for people buying a newly constructed home. Those first-home buyers moving into existing properties will receive a doubling of the allowance to $14,000.
The plan is "designed to support activity in the housing sector and the housing sector is critical to the economy overall," Mr Rudd said.
Opposition Leader Malcolm Turnbull said the Coalition would back the stimulus package.
''It has our bipartisan support,'' Mr Turnbull told a media conference. ''It gives justice to Australia's aged pensioners, in particular, who have been doing it tough.''
Read more here
The Federal Government will pump $10.4 billion into the economy in a bid to prevent Australia sliding into a recession.
Prime Minister Kevin Rudd and Treasurer Wayne Swan unveiled the emergency spending plan, which includes pre-Christmas payments of $4.8 billion for pensioners, $3.9 billion in support for families, and $1.5 billion for first-home buyers - delivering benefits to millions of Australians.
- $4.8b down payment to pensioners, payable in December.
- $3.9b in support payments for families.
- $1.5b for first home buyers.
- $187m to create new training positions
- Budget to remain in surplus.
"It's very important to act early and decisively,'' Mr Rudd told a press conference. ''At a time when economies need stimulus support, don't leave it till too late.''
The housing sector is a major beneficiary. The Government will triple to $21,000 the current $7,000 first-home buyers grant for people buying a newly constructed home. Those first-home buyers moving into existing properties will receive a doubling of the allowance to $14,000.
The plan is "designed to support activity in the housing sector and the housing sector is critical to the economy overall," Mr Rudd said.
Opposition Leader Malcolm Turnbull said the Coalition would back the stimulus package.
''It has our bipartisan support,'' Mr Turnbull told a media conference. ''It gives justice to Australia's aged pensioners, in particular, who have been doing it tough.''
Read more here
Illegal assembly: Two charges, one against MP, thrown out
Source TheStar
KUALA LUMPUR: Two separate charges of illegal assembly, one involving an Opposition Member of Parliament (MP), were thrown out of court on Monday as they were deemed groundless.
Lawyer Johnson Kok Wei Chong and Kuala Krai MP Dr Hatta Ramli (PAS) were charged at the Sessions Court with participating in an illegal assembly with the purpose of being a public nuisance at KLCC on Jan 26 this year between 2.45pm and 4.25pm under Section 143 of the Penal Code.
Later Monday, another four - Tan Chee Hoi, PKR’s Ginie Lim, Mohd Azhar Yaacob and Mohamed Nawi - were charged under a separate case file for participating in a similar illegal assembly at the same time and date, but at a different location in Jalan Ampang.
Kok’s lawyer Gobind Singh Deo argued that the charge was not valid as it went against Section 141 which required at least five people to be present for an unlawful assembly to take place.
“In my client’s case, only he and Dr Hatta are being charged. The charge only lists two names and this is clearly less than five people. The charge should be struck out. Why are we wasting time here? This is a joke,” he said.
Dr Hatta’s lawyer Hanipa Maidin also gave the same argument which was used later when the other four were charged.
Hanipa also said the use of the term “public nuisance” was extraneous as it was not part of the unlawful assembly definition under Section 141.
After a one-hour stand down, Sessions Court judge Mohamad Sekeri Mamat decided to strike out the charge and gave all six a discharge not amounting to an acquittal.
He also reduced the bail to RM500 with one surety for all six compared with the RM1,000 sought by the prosecution. Both lawyers tried to get personal bonds for Dr Hatta and Kok.
All six still faced a second charge of joining Coalition Against Inflation (Protes) supporters in a protest in Jalan Ampang despite an order by Magistrate Aizatul Akmal Maharani prohibiting the protest.
All six pleaded not guilty. When the charge was being read out, Dr Hatta was calm but PKR’s Kok spoke out and claimed the accusation was politically motivated.
Earlier in the day, Batu MP and PKR information chief Tian Chua claimed trial to both charges, which is participating in an illegal assembly and for disobeying Magistrate Aizatul Akmal’s order.
Tian Chua, who was the only one charged in the morning, posted the RM1,000 bail with surety. His lawyer did not contest the charge.
The courtroom was packed as a total of 35 people were supposed to be present for the hearing mention of their illegal assembly case including PAS vice-president Mohamad Sabu and Parti Sosialis Malaysia chairman Dr Mohd Nasir Hashim.
However, six of the accused did not show up, of which two were issued warrants of arrest for not having an excuse.
The court then became a bit noisy after it was heard that a show-cause notice would be issued to the bailor of the two accused, who happened to be Tan Sri Khalid Ibrahim, now the Selangor Mentri Besar.
Khalid, who was not the Mentri Besar at the time of the incident, was believed to have become a bailor for several of the accused.
DPP Fariza Hamzah later said it did not matter that Khalid was now the Mentri Besar as he was the bailor then and the two did not turn up.
Judge Mohamad Sekeri set March 23-25 next year as the joint trial date.
KUALA LUMPUR: Two separate charges of illegal assembly, one involving an Opposition Member of Parliament (MP), were thrown out of court on Monday as they were deemed groundless.
Lawyer Johnson Kok Wei Chong and Kuala Krai MP Dr Hatta Ramli (PAS) were charged at the Sessions Court with participating in an illegal assembly with the purpose of being a public nuisance at KLCC on Jan 26 this year between 2.45pm and 4.25pm under Section 143 of the Penal Code.
Later Monday, another four - Tan Chee Hoi, PKR’s Ginie Lim, Mohd Azhar Yaacob and Mohamed Nawi - were charged under a separate case file for participating in a similar illegal assembly at the same time and date, but at a different location in Jalan Ampang.
Kok’s lawyer Gobind Singh Deo argued that the charge was not valid as it went against Section 141 which required at least five people to be present for an unlawful assembly to take place.
“In my client’s case, only he and Dr Hatta are being charged. The charge only lists two names and this is clearly less than five people. The charge should be struck out. Why are we wasting time here? This is a joke,” he said.
Dr Hatta’s lawyer Hanipa Maidin also gave the same argument which was used later when the other four were charged.
Hanipa also said the use of the term “public nuisance” was extraneous as it was not part of the unlawful assembly definition under Section 141.
After a one-hour stand down, Sessions Court judge Mohamad Sekeri Mamat decided to strike out the charge and gave all six a discharge not amounting to an acquittal.
He also reduced the bail to RM500 with one surety for all six compared with the RM1,000 sought by the prosecution. Both lawyers tried to get personal bonds for Dr Hatta and Kok.
All six still faced a second charge of joining Coalition Against Inflation (Protes) supporters in a protest in Jalan Ampang despite an order by Magistrate Aizatul Akmal Maharani prohibiting the protest.
All six pleaded not guilty. When the charge was being read out, Dr Hatta was calm but PKR’s Kok spoke out and claimed the accusation was politically motivated.
Earlier in the day, Batu MP and PKR information chief Tian Chua claimed trial to both charges, which is participating in an illegal assembly and for disobeying Magistrate Aizatul Akmal’s order.
Tian Chua, who was the only one charged in the morning, posted the RM1,000 bail with surety. His lawyer did not contest the charge.
The courtroom was packed as a total of 35 people were supposed to be present for the hearing mention of their illegal assembly case including PAS vice-president Mohamad Sabu and Parti Sosialis Malaysia chairman Dr Mohd Nasir Hashim.
However, six of the accused did not show up, of which two were issued warrants of arrest for not having an excuse.
The court then became a bit noisy after it was heard that a show-cause notice would be issued to the bailor of the two accused, who happened to be Tan Sri Khalid Ibrahim, now the Selangor Mentri Besar.
Khalid, who was not the Mentri Besar at the time of the incident, was believed to have become a bailor for several of the accused.
DPP Fariza Hamzah later said it did not matter that Khalid was now the Mentri Besar as he was the bailor then and the two did not turn up.
Judge Mohamad Sekeri set March 23-25 next year as the joint trial date.
Oil rises on renewed market optimism
Source The Australian
OIL futures rose overnight for the first session in four, interpreting stock market optimism as a good sign for petroleum demand.
Light, sweet crude for November delivery settled up $US3.49, or 4.5 per cent, at $US81.19 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange settled $US3.37 higher at $US77.46 a barrel.
Oil climbed as the Dow Jones Industrial Average made its largest one-day intraday point gain ever. The blue-chip indicator was recently up 700 points on European governments' commitment to bank recapitalization and prospects for similar moves from the U.S. Treasury.
"Had the stock market been lower and without any crisis intervention over the weekend, we'd probably be at $US75 oil today," said Peter Van Cleve, president of T.W. Energy Consulting, a brokerage in Kansas City, Mo.
Oil remains 44 per cent lower than its peak above $US145 a barrel, reached July 3. With the financial crisis expected to put the brakes on demand growth, analysts don't see prices revisiting the summer's highs anytime soon.
Once among the most bullish forecasters, commodity analysts at Goldman Sachs Group Inc. (GS) now see oil averaging $US86 a barrel in 2009, after slashing its forecast by $US37 Monday.
"We clearly underestimated the depth and duration of the global financial crisis and its implications on economic growth and commodity demand," the analysts said in a note to clients.
A closely watched Goldman stock analyst who covers the oil industry, Arjun Murti, separately cut his price forecast for next year to $US75 a barrel, $US35 lower than his previous view.
The Organization of Petroleum Exporting Countries has been keenly watching oil prices, and scheduled an emergency production meeting Nov. 18. Some analysts say the cartel will act to defend $US80 oil.
Iran's OPEC governor said in an interview Sunday that no one is expecting an output increase. "It's obvious everybody is thinking about a cut," Mohammad Ali Khatibi told Dow Jones Newswires.
Qatar's oil minister called it a "very difficult situation for all the world and not just OPEC," without saying whether he supports a cut.
Saudi Arabia, OPEC's de facto leader, has yet to state its position on future output. OPEC in September agreed to adhere to its quotas.
Front-month November reformulated gasoline blendstock, or RBOB, settled 11.06 cents higher, or 6.1 per cent, at $US1.9176 a gallon. November heating oil settled up 13.10 cents, or 5.9 per cent, at $US2.3410 a gallon.
OIL futures rose overnight for the first session in four, interpreting stock market optimism as a good sign for petroleum demand.
Light, sweet crude for November delivery settled up $US3.49, or 4.5 per cent, at $US81.19 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange settled $US3.37 higher at $US77.46 a barrel.
Oil climbed as the Dow Jones Industrial Average made its largest one-day intraday point gain ever. The blue-chip indicator was recently up 700 points on European governments' commitment to bank recapitalization and prospects for similar moves from the U.S. Treasury.
"Had the stock market been lower and without any crisis intervention over the weekend, we'd probably be at $US75 oil today," said Peter Van Cleve, president of T.W. Energy Consulting, a brokerage in Kansas City, Mo.
Oil remains 44 per cent lower than its peak above $US145 a barrel, reached July 3. With the financial crisis expected to put the brakes on demand growth, analysts don't see prices revisiting the summer's highs anytime soon.
Once among the most bullish forecasters, commodity analysts at Goldman Sachs Group Inc. (GS) now see oil averaging $US86 a barrel in 2009, after slashing its forecast by $US37 Monday.
"We clearly underestimated the depth and duration of the global financial crisis and its implications on economic growth and commodity demand," the analysts said in a note to clients.
A closely watched Goldman stock analyst who covers the oil industry, Arjun Murti, separately cut his price forecast for next year to $US75 a barrel, $US35 lower than his previous view.
The Organization of Petroleum Exporting Countries has been keenly watching oil prices, and scheduled an emergency production meeting Nov. 18. Some analysts say the cartel will act to defend $US80 oil.
Iran's OPEC governor said in an interview Sunday that no one is expecting an output increase. "It's obvious everybody is thinking about a cut," Mohammad Ali Khatibi told Dow Jones Newswires.
Qatar's oil minister called it a "very difficult situation for all the world and not just OPEC," without saying whether he supports a cut.
Saudi Arabia, OPEC's de facto leader, has yet to state its position on future output. OPEC in September agreed to adhere to its quotas.
Front-month November reformulated gasoline blendstock, or RBOB, settled 11.06 cents higher, or 6.1 per cent, at $US1.9176 a gallon. November heating oil settled up 13.10 cents, or 5.9 per cent, at $US2.3410 a gallon.
Indian Hindu Threat to Christians: Convert or Flee
Source New York Times
BOREPANGA, India — The family of Solomon Digal was summoned by neighbors to what serves as a public square in front of the village tea shop.
They were ordered to get on their knees and bow before the portrait of a Hindu preacher. They were told to turn over their Bibles, hymnals and the two brightly colored calendar images of Christ that hung on their wall. Then, Mr. Digal, 45, a Christian since childhood, was forced to watch his Hindu neighbors set the items on fire.
“ ‘Embrace Hinduism, and your house will not be demolished,’ ” Mr. Digal recalled being told on that Wednesday afternoon in September. “ ‘Otherwise, you will be killed, or you will be thrown out of the village.’ ”
India, the world’s most populous democracy and officially a secular nation, is today haunted by a stark assault on one of its fundamental freedoms. Here in eastern Orissa State, riven by six weeks of religious clashes, Christian families like the Digals say they are being forced to abandon their faith in exchange for their safety.
The forced conversions come amid widening attacks on Christians here and in at least five other states across the country, as India prepares for national elections next spring.
The clash of faiths has cut a wide swath of panic and destruction through these once quiet hamlets fed by paddy fields and jackfruit trees. Here in Kandhamal, the district that has seen the greatest violence, more than 30 people have been killed, 3,000 homes burned and over 130 churches destroyed, including the tin-roofed Baptist prayer hall where the Digals worshiped. Today it is a heap of rubble on an empty field, where cows blithely graze.
Across this ghastly terrain lie the singed remains of mud-and-thatch homes. Christian-owned businesses have been systematically attacked. Orange flags (orange is the sacred color of Hinduism) flutter triumphantly above the rooftops of houses and storefronts.
India is no stranger to religious violence between Christians, who make up about 2 percent of the population, and India’s Hindu-majority of 1.1 billion people. But this most recent spasm is the most intense in years.
It was set off, people here say, by the killing on Aug. 23 of a charismatic Hindu preacher known as Swami Laxmanananda Saraswati, who for 40 years had rallied the area’s people to choose Hinduism over Christianity.
The police have blamed Maoist guerrillas for the swami’s killing. But Hindu radicals continue to hold Christians responsible.
In recent weeks, they have plastered these villages with gruesome posters of the swami’s hacked corpse. “Who killed him?” the posters ask. “What is the solution?”
Behind the clashes are long-simmering tensions between equally impoverished groups: the Panas and Kandhas. Both original inhabitants of the land, the two groups for ages worshiped the same gods. Over the past several decades, the Panas for the most part became Christian, as Roman Catholic and Baptist missionaries arrived here more than 60 years ago, followed more recently by Pentecostals, who have proselytized more aggressively.
Meanwhile, the Kandhas, in part through the teachings of Swami Laxmanananda, embraced Hinduism. The men tied the sacred Hindu white thread around their torsos; their wives daubed their foreheads with bright red vermilion. Temples sprouted.
Hate has been fed by economic tensions as well, as the government has categorized each group differently and given them different privileges.
The Kandhas accused the Panas of cheating to obtain coveted quotas for government jobs. The Christian Panas, in turn, say their neighbors have become resentful as they have educated themselves and prospered.
Their grievances have erupted in sporadic clashes over the past 15 years, but they have exploded with a fury since the killing of Swami Laxmanananda.
Two nights after his death, a Hindu mob in the village of Nuagaon dragged a Catholic priest and a nun from their residence, tore off much of their clothing and paraded them through the streets.
The nun told the police that she had been raped by four men, a charge the police say was borne out by a medical examination. Yet no one was arrested in the case until five weeks later, after a storm of media coverage. Today, five men are under arrest in connection with inciting the riots. The police say they are trying to find the nun and bring her back here to identify her attackers.
Given a chance to explain the recent violence, Subash Chauhan, the state’s highest-ranking leader of Bajrang Dal, a Hindu radical group, described much of it as “a spontaneous reaction.”
He said in an interview that the nun had not been raped but had had regular consensual sex.
On Sunday evening, as much of Kandhamal remained under curfew, Mr. Chauhan sat in the hall of a Hindu school in the state capital, Bhubaneshwar, beneath a huge portrait of the swami. A state police officer was assigned to protect him round the clock. He cupped a trilling Blackberry in his hand.
Mr. Chauhan denied that his group was responsible for forced conversions and in turn accused Christian missionaries of luring villagers with incentives of schools and social services.
He was asked repeatedly whether Christians in Orissa should be left free to worship the god of their choice. “Why not?” he finally said, but he warned that it was unrealistic to expect the Kandhas to politely let their Pana enemies live among them as followers of Jesus.
“Who am I to give assurance?” he snapped. “Those who have exploited the Kandhas say they want to live together?”
Besides, he said, “they are Hindus by birth.”
Hindu extremists have held ceremonies in the country’s indigenous belt for the past several years intended to purge tribal communities of Christian influence.
It is impossible to know how many have been reconverted here, in the wake of the latest violence, though a three-day journey through the villages of Kandhamal turned up plenty of anecdotal evidence.
A few steps from where the nun had been attacked in Nuagaon, five men, their heads freshly shorn, emerged from a soggy tent in a relief camp for Christians fleeing their homes.
The men had also been summoned to a village meeting in late August, where hundreds of their neighbors stood with machetes in hand and issued a firm order: Get your heads shaved and bow down before our gods, or leave this place.
Trembling with fear, Daud Nayak, 56, submitted to a shaving, a Hindu sign of sacrifice. He drank, as instructed, a tumbler of diluted cow dung, considered to be purifying.
In the eyes of his neighbors, he reckoned, he became a Hindu.
In his heart, he said, he could not bear it.
All five men said they fled the next day with their families. They refuse to return.
In another village, Birachakka, a man named Balkrishna Digal and his son, Saroj, said they had been summoned to a similar meeting and told by Hindu leaders who came from nearby villages that they, too, would have to convert. In their case, the ceremony was deferred because of rumors of Christian-Hindu clashes nearby.
For the time being, the family had placed an orange flag on their mud home. Their Hindu neighbors promised to protect them.
Here in Borepanga, the family of Solomon Digal was not so lucky. Shortly after they recounted their Sept. 10 Hindu conversion story to a reporter in the dark of night, the Digals were again summoned by their neighbors. They were scolded and fined 501 rupees, or about $12, a pinching sum here.
The next morning, calmly clearing his cauliflower field, Lisura Paricha, one of the Hindu men who had summoned the Digals, confirmed that they had been penalized. Their crime, he said, was to talk to outsiders.
BOREPANGA, India — The family of Solomon Digal was summoned by neighbors to what serves as a public square in front of the village tea shop.
They were ordered to get on their knees and bow before the portrait of a Hindu preacher. They were told to turn over their Bibles, hymnals and the two brightly colored calendar images of Christ that hung on their wall. Then, Mr. Digal, 45, a Christian since childhood, was forced to watch his Hindu neighbors set the items on fire.
“ ‘Embrace Hinduism, and your house will not be demolished,’ ” Mr. Digal recalled being told on that Wednesday afternoon in September. “ ‘Otherwise, you will be killed, or you will be thrown out of the village.’ ”
India, the world’s most populous democracy and officially a secular nation, is today haunted by a stark assault on one of its fundamental freedoms. Here in eastern Orissa State, riven by six weeks of religious clashes, Christian families like the Digals say they are being forced to abandon their faith in exchange for their safety.
The forced conversions come amid widening attacks on Christians here and in at least five other states across the country, as India prepares for national elections next spring.
The clash of faiths has cut a wide swath of panic and destruction through these once quiet hamlets fed by paddy fields and jackfruit trees. Here in Kandhamal, the district that has seen the greatest violence, more than 30 people have been killed, 3,000 homes burned and over 130 churches destroyed, including the tin-roofed Baptist prayer hall where the Digals worshiped. Today it is a heap of rubble on an empty field, where cows blithely graze.
Across this ghastly terrain lie the singed remains of mud-and-thatch homes. Christian-owned businesses have been systematically attacked. Orange flags (orange is the sacred color of Hinduism) flutter triumphantly above the rooftops of houses and storefronts.
India is no stranger to religious violence between Christians, who make up about 2 percent of the population, and India’s Hindu-majority of 1.1 billion people. But this most recent spasm is the most intense in years.
It was set off, people here say, by the killing on Aug. 23 of a charismatic Hindu preacher known as Swami Laxmanananda Saraswati, who for 40 years had rallied the area’s people to choose Hinduism over Christianity.
The police have blamed Maoist guerrillas for the swami’s killing. But Hindu radicals continue to hold Christians responsible.
In recent weeks, they have plastered these villages with gruesome posters of the swami’s hacked corpse. “Who killed him?” the posters ask. “What is the solution?”
Behind the clashes are long-simmering tensions between equally impoverished groups: the Panas and Kandhas. Both original inhabitants of the land, the two groups for ages worshiped the same gods. Over the past several decades, the Panas for the most part became Christian, as Roman Catholic and Baptist missionaries arrived here more than 60 years ago, followed more recently by Pentecostals, who have proselytized more aggressively.
Meanwhile, the Kandhas, in part through the teachings of Swami Laxmanananda, embraced Hinduism. The men tied the sacred Hindu white thread around their torsos; their wives daubed their foreheads with bright red vermilion. Temples sprouted.
Hate has been fed by economic tensions as well, as the government has categorized each group differently and given them different privileges.
The Kandhas accused the Panas of cheating to obtain coveted quotas for government jobs. The Christian Panas, in turn, say their neighbors have become resentful as they have educated themselves and prospered.
Their grievances have erupted in sporadic clashes over the past 15 years, but they have exploded with a fury since the killing of Swami Laxmanananda.
Two nights after his death, a Hindu mob in the village of Nuagaon dragged a Catholic priest and a nun from their residence, tore off much of their clothing and paraded them through the streets.
The nun told the police that she had been raped by four men, a charge the police say was borne out by a medical examination. Yet no one was arrested in the case until five weeks later, after a storm of media coverage. Today, five men are under arrest in connection with inciting the riots. The police say they are trying to find the nun and bring her back here to identify her attackers.
Given a chance to explain the recent violence, Subash Chauhan, the state’s highest-ranking leader of Bajrang Dal, a Hindu radical group, described much of it as “a spontaneous reaction.”
He said in an interview that the nun had not been raped but had had regular consensual sex.
On Sunday evening, as much of Kandhamal remained under curfew, Mr. Chauhan sat in the hall of a Hindu school in the state capital, Bhubaneshwar, beneath a huge portrait of the swami. A state police officer was assigned to protect him round the clock. He cupped a trilling Blackberry in his hand.
Mr. Chauhan denied that his group was responsible for forced conversions and in turn accused Christian missionaries of luring villagers with incentives of schools and social services.
He was asked repeatedly whether Christians in Orissa should be left free to worship the god of their choice. “Why not?” he finally said, but he warned that it was unrealistic to expect the Kandhas to politely let their Pana enemies live among them as followers of Jesus.
“Who am I to give assurance?” he snapped. “Those who have exploited the Kandhas say they want to live together?”
Besides, he said, “they are Hindus by birth.”
Hindu extremists have held ceremonies in the country’s indigenous belt for the past several years intended to purge tribal communities of Christian influence.
It is impossible to know how many have been reconverted here, in the wake of the latest violence, though a three-day journey through the villages of Kandhamal turned up plenty of anecdotal evidence.
A few steps from where the nun had been attacked in Nuagaon, five men, their heads freshly shorn, emerged from a soggy tent in a relief camp for Christians fleeing their homes.
The men had also been summoned to a village meeting in late August, where hundreds of their neighbors stood with machetes in hand and issued a firm order: Get your heads shaved and bow down before our gods, or leave this place.
Trembling with fear, Daud Nayak, 56, submitted to a shaving, a Hindu sign of sacrifice. He drank, as instructed, a tumbler of diluted cow dung, considered to be purifying.
In the eyes of his neighbors, he reckoned, he became a Hindu.
In his heart, he said, he could not bear it.
All five men said they fled the next day with their families. They refuse to return.
In another village, Birachakka, a man named Balkrishna Digal and his son, Saroj, said they had been summoned to a similar meeting and told by Hindu leaders who came from nearby villages that they, too, would have to convert. In their case, the ceremony was deferred because of rumors of Christian-Hindu clashes nearby.
For the time being, the family had placed an orange flag on their mud home. Their Hindu neighbors promised to protect them.
Here in Borepanga, the family of Solomon Digal was not so lucky. Shortly after they recounted their Sept. 10 Hindu conversion story to a reporter in the dark of night, the Digals were again summoned by their neighbors. They were scolded and fined 501 rupees, or about $12, a pinching sum here.
The next morning, calmly clearing his cauliflower field, Lisura Paricha, one of the Hindu men who had summoned the Digals, confirmed that they had been penalized. Their crime, he said, was to talk to outsiders.
China Announces Land Policy Aimed at Promoting Income Growth in Countryside
Source New York Times
BEIJING — Chinese leaders said Sunday that they would adopt a rural growth policy aimed at vastly increasing the income of China’s hundreds of millions of farmers by the year 2020, setting in motion what could be the nation’s biggest economic reform in years.
The new policy is intended to stimulate market-driven economic growth in the countryside and to narrow the enormous income disparity between rural and urban Chinese, one of the largest such gaps in the world. Its adoption is another significant step away from the system of communal farming and collectivization put in place under Mao.
The announcement, made through reports in state news organizations on Sunday night, came at the end of the Communist Party’s annual four-day planning session. The reports did not give details of the reform, nor did they say when the plan would take effect. Policy decisions made at the planning session are often given pro forma approval by the National People’s Congress in an annual meeting the following March before details are unveiled and implementation begins.
Scholars and government advisers said in interviews during the four-day session that the new policy would allow China’s more than 800 million peasants to engage in the unrestricted trade or sale of land-use contracts, good for decades, that are given to them by the government. Adopting such a system would be a significant move toward privatization.
Since early October, state news media have run stories extolling the virtues of a system in which farmers would be able to trade, purchase or sell their land rights.
State news reports on Sunday night described the rural reform package in general terms, but said that a new land management system would be put in place. A draft of the new policy that had been written up by the Central Committee began circulating on Thursday in the planning session, which was attended by 368 Communist Party members and overseen by President Hu Jintao.
Xinhua, the state news agency, cited an official statement that said Chinese leaders had agreed at the session that the country “will stick to and improve its rural basic economic system.” To do so, the agency reported, the government will “set up a ‘strict and normative’ land management system in the countryside, expand policy support for agriculture, establish a modern rural financial network and a system to balance the development between rural and urban areas, and improve the rural democracy.”
The government’s goal is to double the per capita disposable income of rural residents by 2020, according to Xinhua.
While China’s cities have profited enormously from economic reforms first announced in 1978, the countryside has lagged further and further behind. Protests in rural China are a big source of social unrest these days, and the most common grievance centers on the seizure of land by corrupt government officials.
“With rapid industrialization and urbanization, the violation of farmers’ land rights happens all the time, as local governments make decisions for farmers instead of allowing farmers to decide for themselves,” Song Hongyuan, the head of the Research Center for the Rural Economy in the Ministry of Agriculture, said in an interview. “Thus the government needs to improve the policy to fully protect farmers’ interests.”
In theory, the new policy would grant peasants more land security and lead them to make better use of the small fields that they now manage under 30-year contracts. The ability to sell the contracts would also lead to the establishment of large-scale farms, which some economists say would help China’s agricultural industry better compete in a global marketplace.
For those farmers who decide to move to the cities, as many are doing now, the policy discussed at the planning session would allow them to cash in on their land assets and relocate to the cities with some savings.
In theory, the farmers would also be able to use the land rights as collateral for loans.
Policy makers were also discussing whether to increase the contracts to 70 years, but it was unclear on Sunday night whether that measure had been adopted in the reform package.
A law passed in 2002 allowed peasants to engage in limited trades of their land-use contracts but still kept many restrictions.
In some parts of China, especially in coastal provinces like Guangdong or Zhejiang, farmers engage in robust trading of land. Peasants who move to cities to become migrant workers often informally give up or swap their farmland to family members.
Advocates for land reform say that in order for any new system of land use to work properly, the Chinese government still has to ensure that the rule of law is established and followed, especially by local government officials.
“Implementation of the law is the key,” said Keliang Zhu, a lawyer with the China research division of the Rural Development Institute, a Seattle-based group that pushes for land reform for poor people around the world. “You have a much greater test in the future. We need to make sure to establish supporting institutions that will help to carry out laws and policies.”
Mr. Zhu said the government needed to educate farmers and local officials about the legal aspects of land rights. In addition, farmers should be given full documentation ensuring their rights to a piece of land, he said. Officially, the government says that 80 to 90 percent of peasants have proper documentation, but in reality only half do, he said, citing recent statistics compiled by the Rural Development Institute.
Under the new policy, companies buying land-use rights from peasants will probably still not be able to easily convert the land to some use other than farming. Senior Communist Party officials often express reservations at allowing businesses unfettered access to China’s land.
BEIJING — Chinese leaders said Sunday that they would adopt a rural growth policy aimed at vastly increasing the income of China’s hundreds of millions of farmers by the year 2020, setting in motion what could be the nation’s biggest economic reform in years.
The new policy is intended to stimulate market-driven economic growth in the countryside and to narrow the enormous income disparity between rural and urban Chinese, one of the largest such gaps in the world. Its adoption is another significant step away from the system of communal farming and collectivization put in place under Mao.
The announcement, made through reports in state news organizations on Sunday night, came at the end of the Communist Party’s annual four-day planning session. The reports did not give details of the reform, nor did they say when the plan would take effect. Policy decisions made at the planning session are often given pro forma approval by the National People’s Congress in an annual meeting the following March before details are unveiled and implementation begins.
Scholars and government advisers said in interviews during the four-day session that the new policy would allow China’s more than 800 million peasants to engage in the unrestricted trade or sale of land-use contracts, good for decades, that are given to them by the government. Adopting such a system would be a significant move toward privatization.
Since early October, state news media have run stories extolling the virtues of a system in which farmers would be able to trade, purchase or sell their land rights.
State news reports on Sunday night described the rural reform package in general terms, but said that a new land management system would be put in place. A draft of the new policy that had been written up by the Central Committee began circulating on Thursday in the planning session, which was attended by 368 Communist Party members and overseen by President Hu Jintao.
Xinhua, the state news agency, cited an official statement that said Chinese leaders had agreed at the session that the country “will stick to and improve its rural basic economic system.” To do so, the agency reported, the government will “set up a ‘strict and normative’ land management system in the countryside, expand policy support for agriculture, establish a modern rural financial network and a system to balance the development between rural and urban areas, and improve the rural democracy.”
The government’s goal is to double the per capita disposable income of rural residents by 2020, according to Xinhua.
While China’s cities have profited enormously from economic reforms first announced in 1978, the countryside has lagged further and further behind. Protests in rural China are a big source of social unrest these days, and the most common grievance centers on the seizure of land by corrupt government officials.
“With rapid industrialization and urbanization, the violation of farmers’ land rights happens all the time, as local governments make decisions for farmers instead of allowing farmers to decide for themselves,” Song Hongyuan, the head of the Research Center for the Rural Economy in the Ministry of Agriculture, said in an interview. “Thus the government needs to improve the policy to fully protect farmers’ interests.”
In theory, the new policy would grant peasants more land security and lead them to make better use of the small fields that they now manage under 30-year contracts. The ability to sell the contracts would also lead to the establishment of large-scale farms, which some economists say would help China’s agricultural industry better compete in a global marketplace.
For those farmers who decide to move to the cities, as many are doing now, the policy discussed at the planning session would allow them to cash in on their land assets and relocate to the cities with some savings.
In theory, the farmers would also be able to use the land rights as collateral for loans.
Policy makers were also discussing whether to increase the contracts to 70 years, but it was unclear on Sunday night whether that measure had been adopted in the reform package.
A law passed in 2002 allowed peasants to engage in limited trades of their land-use contracts but still kept many restrictions.
In some parts of China, especially in coastal provinces like Guangdong or Zhejiang, farmers engage in robust trading of land. Peasants who move to cities to become migrant workers often informally give up or swap their farmland to family members.
Advocates for land reform say that in order for any new system of land use to work properly, the Chinese government still has to ensure that the rule of law is established and followed, especially by local government officials.
“Implementation of the law is the key,” said Keliang Zhu, a lawyer with the China research division of the Rural Development Institute, a Seattle-based group that pushes for land reform for poor people around the world. “You have a much greater test in the future. We need to make sure to establish supporting institutions that will help to carry out laws and policies.”
Mr. Zhu said the government needed to educate farmers and local officials about the legal aspects of land rights. In addition, farmers should be given full documentation ensuring their rights to a piece of land, he said. Officially, the government says that 80 to 90 percent of peasants have proper documentation, but in reality only half do, he said, citing recent statistics compiled by the Rural Development Institute.
Under the new policy, companies buying land-use rights from peasants will probably still not be able to easily convert the land to some use other than farming. Senior Communist Party officials often express reservations at allowing businesses unfettered access to China’s land.
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