August 2002, Issue No. 9
 
 
 
  ARF Military Forum Opens in Seoul
Pacific Anti-Terror Plan Born
   
 
 

China Moves to Clean Up Postal Banking
Rules on Gov't Purchase Updated
Systematic Reform Key in Land Protection
Lawyer Liability System Adopted to Sharpen Edge
Gov't Duties Will No Longer Overlap
China Releases New Regulations on Trademark Law
New Policy Boosts Legal Services
Shanghai Issues New Policies to Attract Multinationals
China Gears Up to Halt Capital Flight
Taipei: Mainland Affairs Council Eases Rules on Chinese Professionals
Washington Post Foreign Service
New Draft Law Aims to Protect Environment
CHINA: CCP Sets November 8th Date for 16th National Congress
China to Open Garbage Disposal to Private Sector
Draft Law to Shield Individual Investors
Senior CPC Leader Stresses Science, Education Strategy
Japan: Emergency Defense Legislation Believed Too Vague
BOJ to Keep Monetary Policy as Is
New ODA Plan to Involve Local Municipalities
Koizumi Sets Stage for U-Turn in Bank Policy
Korea: Ministry Stepping Up Efforts to Legalize Five-Day Workweek
New Publishing Law Draws Mixed Response
Macroeconomic Policies Likely to Be Adjusted
Market Participants Invited to Assess Watchdogpolicy
Trade Law Likely to Quicken ROK-US FTA
Policy Committee Issues Report Card on Government's First-Half Performance
N.K. Devalues Currency as Part of Economic Changes
N.K. to Reform Economic Policy: Chinese Amb. Li
Pioneer Project in Mongolia Supports Preschool and Disabled Children
Seoul Plans Stem Cell Line Bank
Gov't Mulls Reducing Public Holidays

   
 
  Indonesian Minister Prefers Constitution Amendment After 2004
Indonesian House Speaker Mulls Forming Constitutional Commission
Indonesia's Foreign Policy Puts ASEAN in Top Priority
Indonesia's Assembly Approves Direct Presidential Vote
Indonesia Makes Sweeping Changes to Constitution
Jakarta Presses Reform
Malaysia: New Unit to Handle Intellectual Property
Objective to Be Self-Dependent
Proposal for ISA Changes by Year End
Malaysian Labor Laws Strain Regional Ties
Philippines: DTI SEC Finalizing Jurisdiction Delineation
DA Favors Agri-Agra Law Repeal
Thailand: WHO Backing for Health Care Policy
Developing Nations Watch Thailand's Bold Healthcare Plan
Viet Nam: Updated Trade Law Proposed
   
 
 

Bangladesh: Judicial Service Commission Rules Okayed
India: Govt Aims at Developing Goa: CM
CBI Gets Four New Joint Directors
Reference to SC A Rare Decision
Ordinances Set to Give Centre a Headache
Govt To Take Fresh Look at Anti-Quackery Ordinance
Kalam Signs Controversial Poll Reforms Bill
Govt Not to Pressure Constitutional Agencies Including CBI: PM
SC Issues Notices to EC, State Govts
Sri Lanka: Govt to Bring 36 New Laws to Accelerate Development
Laws Being Amended to Curb Terrorism
Joint Economic Council Formed

Nepal: Girija Congress Calls For Constitution Amendment
Pakistan: Govt Revises Proposed Constitutional Amendments
New Ordinance Separates Prosecution, Investigation
No More Private Jobs for Bureaucrats
Power Rate Up by 19 Paisa Per Unit
PPP, PML-N Criticise New Law

   
 
 

Armenian President Signs Law Reversing Earlier Electoral Reforms
Armenian Election Dates Set
Azerbaijan: Constitutional Referendum Declared Valid
Government Claims Victory in Controversial Referendum
Kazaks tan: The Draft Law on JSC Can Ruin 92 % of the JSC
New Mechanisms of Cooperation between WB and Govt. of RK
Tajikistan Adopts Policy on Intensive Economic Development in 2003
Uzbekistan: Merchants, Consumers Paying High Price for Presidential Decrees
New Law to Ban Tobacco Advertisement in Mass Media

   
 
  Australia: States Pay to Win New Crimefighter
250,000 Welfare Recipients Penalised for Breaking Rules by Tim Colebatch
Overhaul Divorce Laws, MP Urgesby Annabel Crabb
Anti-Spam System Launched
PM Raises Bar on Pacific Aid
Regulation Turns Investors Off
ACT Laws First to Legalise Abortion
Minister Makes Smuggler Hit List
New Zealand: Illegal Housie Games Raided
Environmental Watchdog Wants More Tax, Less Growth
Job Laws 'Inhibit Growth'
Big Splash in Fuel Exploration
Government Grants Lift R&D Spending
Papua New Guinea: Minister Says Yes to New French Polynesia Autonomy Statute
   
 
  Commonwealth Pacific Leaders Meet to Debate Democracy
Hong Kong Leader Highest Paid in Asia
Pacific Leaders Say Civil Society Must Be Accountable Too
   
 
 

Bankruptcy Procedure Gets Judicial Update
Acquisition Rules Assist SOEs to Restructure
Accountability System Makes for Effective Govt
China Urged to Heed Enlarging Income Disparity
China Prosecutes A Banker as Loan Scandals Continue
Senior Bank Official Jailed for 16 Years
Slow Political Reform A Threat to China's Economy: Analysts
Rural Elections Strengthen Grassroots Governance
National Certification Board Set Up
Struggling HK Turns to Its Civil Servants for Answers
Japan: Suzuki Rearrested in Growing Bribery Case
Japan: PM Koizumi Pushes Tax Reform Bill
Shiokawa Pushes Tax-Cut Plan
National Servants Looking at 2.03% Reduction in Wages
Public Projects Use Money Like Water
Tax Commission Head Skeptical of Koizumi Tax Cuts
Koizumi's Sputtering Reforms Seen Ensuring More Strife for Japan
Govt Faces Calls to Cut Subsidy System
Kan Announces Candidacy in DPJ Election
Governors Split on National Education Role
Reform of the Highway Corporations
Govt to Launch Asian Patent Network
Korea: Seoul City Hall Launches Mayor's Advisory Panel
Beijing's Jury Is Still Out on North Korean Reforms
Seoul Urged to Cut Agricultural Tariffs
S. Korean Opposition Wins Legislative Majority
GNP Wins Majority in Assembly Ahead of Presidential Polla
President Promises Fair Election
Ex-Conscription Chief Faces Summons This Weekend in Draft-Dodging Scandal
P.M. Nominee Voted Down Again

   
 
  Indonesia Adopts Direct Presidential Elections, Rejects Islam-Based Law
Indonesia Takes A Giant Step Down the Road to Democracy
Calls Mount for Cabinet Reshuffle Amid Failures
Malaysia: Civil Service to Practise Smart Partnership
People Want An Honest Government, Says Megat Junid
Dr M - Democracy Should Be Handled With Care
Council to Push Our Education Sector Overseas
Philippines: Davide Asks Envoy for Details on Corruption
S'pore Seen As Fifth Least Corrupt Nation
Thailand: New Mechanisms Would Give Vitality to State Organisations
Officials Jittery Over Reform
Vietnam to Increase Salary for Administrative Officers
Ministry Sets Up Safety Net for Redundant Govt Workers
Vietnam Urged to Adopt Major Reforms
   
 
 

Bangladesh: Free Ffs' Trust from Corruption: PM
PM Stresses Coordination of Housing Programmes
India: Vajpayee to Reshuffle Cabinet Today
India Among 30 Most Corrupt Countries--Survey
Lanka Has Asia's Highest Ratio of Public Servants to Citizens
Corrupt Public Officials Should Be Punished - Minister Marapana
Pakistan: Minister Promises Action Against Corrupt Nazims
Police Reforms Compromised to Keep the Powerful Happy
Anti-Smuggling Force to Start Operation Soon
Pakistan Election Timetable Set

   
 
 

Opposition Leaders Say Azerbaijani Referendum Marred by Fraud
Kyrgyz Authorities Slam New Opposition Group
Kazaks tan: The Senate Elections Will Take Place on 8 October, 2002
Uzbek Parliamentary Committee to Gain More Powers

   
 
  Australia: Nelson Blueprint Rejected
Crime the Big Election Issue: Survey
ACTU Backs Bonds for Public Projects
Canberra Rules out Medicare Boost
Fiji Customs House to Get $2.3 Million Upgrade
Minister Supports New Fiji Trade Union Umbrella Body
Micronesian Presidents Consider Pacific Islands
Nauru Joins Bid for Forum Secretary-General Job
Niue Government Announces Jet Airline Service Breakthrough
New Zealand: End of Beginning Is Nigh for Government
Clark Sets Up Govt with Good Faith, No Surprises Deal
Clark Announces New Cabinet
Clark Foresees President Role
Treasury Secretary to Be New Reserve Bank Governor
Pacific Leaders Meet at Nadi for Commonwealth Democracy Roundtable
Papua New Guinea: Sir Michael Somare Back in Power to Tackle PNG's Big Challenges
Somare Sets up 2 New Ministries to Revamp Government
Tonga Plans Revamp of Century-Old Local Government System
Tuvalu Mps Elect New Prime Minister
Vanuatu Crisis
Samoa Sets Up New Agency to Plan Development
 
  APEC Holds Seminar on Female Entrepreneurship
ADB to Organise a Series of Consultation Workshops with NGOs
ADB's Training Seminar Emphasizes Development
FAPAD Discusses Improving Audit Quality with Staff of ADB-Assisted Projects

 
 

China: Mayors Score Well in First Popularity Test
China Enhances Food Safety Efforts
Japan: Diet Stood in the Way of Reform
Korea: Ministry to Introduce Foreign Agricultural Trainee System
President Kim Calls for Expanded Public Election Management System
N Koreans in China to Study Banking System

 
  Remain Hardworking or Lose Out, Malaysians Told
English - Cabinet to Study All Counter-Proposals
Help Govt Realise Green Campaign
Philippines: Arroyo, Jdv Okay Online Tax Pay Plan
Construction Sector Leaner With New Rules
Viet Nam: Change in Port Management
 
 

Bangladesh: Govt Has Failed to Control Market Prices: AL
500 Industries Without BSTI Licences in 10 Districts
'Govt to Establish Terror-Free Society
Bhutan: Judiciary - An Era of Reforms
India: 'Infrastructurestrategies2002' to Reveal Ground-Breaking Research Results
India-- Securities and Exchange Board Plans Corporate Governance Measures
Govt Working Has Improved- Minister
Pakistan: New Govt Will Have to Sustain Ongoing Reforms:Shaukat
Govt Grants Petroleum Exploration License

 
  Domestic Political Crackdown in Kazakhstan Could Have Economic Consequences
Tajikistan Abolishes Exit Visas
Turkey Eyes European Union in Wave of Reforms
Uzbekistan: Government Issues Resolution on Further Reforms in Karakalpakstan
 
  Samoa Plans to Slash Government Departments in Major Reform
   
 
  Switzerland Increases Support for Five Central Asian Countries
ACP-- Pacific Ministers Seek Euro 4 Million for Negotiations Action Plan
Change Development Focus, Population Expert Urges Forum Officials
Asia's New Population Crisis
Is Asia Falling into an Economic Tailspin
World Bank Warns of Growth Risks Ahead
 
  China: Shanghai Aims to Become Int'l Financial Center: Mayor
Beijing Slams `International Cities' Rivalry
.CN DN Registration Regulation Emerges
2002 Forum on China Network Media Ended in Suzhou
Loan Plan to Boost Retail Stock Market
Overseas-funded Online-bank Debuts in China
Glitches Mar Japan ID System Debut
Credit Card Issuers to Adopt Sony's E-Money System
Seoul Unveils E-Trade Promotion Plans
Mongolia on Track to Achieving Millennium Development Goals
 
  Unemployment Figures Hide Depth of Indonesia's Despair
Lao: National Industry Expands Over Past Year
IMF to Disburse US$ Six Million for Laos
Malaysian E-Business Provider Makes Headway into Myanmar
Philippines: Dev't Plan Targets Employment Levels
NSO Registry System IT Project Brings Services Closer to People
Implementation Improves for WB-Financed Projects
E-Commerce Fails to Take Off in RP, Lack of Viable Payment Sol'N Blamed
Excel Systems to Build Assembly Plant for Scooters in the Philippines
BIR Poor Collection Traced to Economic Slowdown
4.7% Growth Seen for S'pore Economy
S'pore Can Become An Entrepreneurial Society
Govt to SMEs: You Won't Be Ignored Like Small Fish
Thailand: New Transmission Line to Spark Southern Economic Development
Water Transport Schemes Get A New Look
Viet Nam: E-Government Progress Wins World Bank Support
Banks to Syndicate Loans to Petrovietnam
State Firms to Be Restructured for Integration
WTO Accession Signals SOS For VN's SMEs
Economic Restructuring Important to Secure Competitiveness
 
  Bhutan Power Corporation Inaugurated
India: Govt Planning I-Cards for All Citizens
Indian SMEs Head for Central Asia
Sri Lanka: Country's Economy on the Uptrend
Three-Year Plan for the Maldives
Maldives Hopes to Become A Middle-Income Country by 2020: Zaki
Pakistan: ITCN Asia-2002 Begins Today
Pak Creating IT Boom in the World
Pak Has Made Tremendous Progress in IT: Dr Atta
Population Control Must to Save Resources for Future
 
  Uzbekistan: Seminars on Insurance Activity Being Held in Tashkent
Azerbaijan: Awestern Companies Prepared to Invest in Caspian Gas Fields
 
  Australia: Social Crisis Looms: Magistrate
Relief on Welfare Paybacks
Kiribati Pushes for A United Islands Front Internationally
New Zealand: Unemployment Drops to 14-Year Low
Government Sets out Three-Year Plan
Palau Hosts Second Meeting of 3 Micronesian Presidents
   
 
  Nasdaq Calls It Quits on Asia

 
 

China: Nortel Delivers Information Back-Up System to Industrial And Commercial Bank of China
'Structured Finance Market' to Swell to 5 Trillion Yen: S&P
Japan: A Setback in Fiscal Reform
Shakedown in Taiwan Banking
Japan Bank Losses from Bad-Loan Cleanups Soar 59% In Fy01: Boj
Hana Bank Picked for SeoulBank Takeover
FSA Plans to Offer Cash Incentives to Banks That Merge
Korea: Central Bank Advised to Be More Prudent in Rate Policy
KIF Calls for Creation of `Asian IMF'
Rough Start for Regulator in Japan

 

 
  Budget Woes Affect Unions
Indonesia to Revamp Financial Sector by Closing Insurance Firms
Govt Announces Subsidy Cuts, Higher Taxes for 2003 Budget
IBRA Finds Itself in Another Mess for Its Loan Sales
Brunei and Pension Fund Team Up to Buy into Firms
Thailand Sets Aside Emergency Budget of 38bn Bathv
Philippines: Gov't Oks Dollar-Linked Peso Bond Float Worth P7B
Singapore: Banking Shakeup Is Taxing Ingenuity of Property Managers
CSFB Sticks to 5.6% Growth Forecast
Budget Expected to Have Different Flavour
State Bank Asks Ailing Stock Banks to Reduce Chartered Capital
ADB to Lend Viet Nam $840m for Development
State Beefs Up Its Commercial Banking Sector
Viet Nam: Inflation Spectre Looms Following Bank Credit Expansion, Looser Money Policy
 
 

Public Accounts Committee Being Abolished
India: Inflation Rises to 2.73%
New Audit Fraud Panel Head
Sri Lanka: Inflation to Go down Further - CB
Govt to Retire 290 Billion Debt
ADB Backs Computerized System to Help Develop Capital Markets in Bangladesh

 
  Uzbek Gov-T to Revise Tax System, Profit Tax to Be Reduced
Wages to Double in Turkmenistan
 
  Credit Card Reform to Save $360m
New Zealand: Bank Pauses as Global Outlook Points to Gloom
Australia: CBA Defends Job Cuts
   
 
  Efforts to Speed Up Dynamic Pacific Private Sector Get Funding
Strategy for Dynamic Private Sector in the Pacific
 
  Korea: Power Generation Sparks Interest of Conglomerates
China's First Semi-Private Airline to Take Off
Japan: Private-Sector Leader Urged for Postal Entity
Drivers Want Privatized Highways: Poll
Complete Privatization of Postal Services Sought
Japan Telecom to Sell Off Part of Engineering Unit
Liberalizing China's Financial Sector
 
  Thai Wins Nod to Sell 400m Shares
Malaysia: Firm to Study Water Privatization
Philippines: JCPC to Resume Talks on Genco Privatization

 
  Pakistan: HBL Privatisation to Finish by End-2003
Power Ministry Opposes Strategic Sale of NTPC
India: Privatisation Can Offset Impact of Drought: Govt
 
  Iran Ministry Welcomes Power Plant Building by Private Sector
 
  PNG Privatisation Halted
Australia: Telstra Full Sale Bid by 2003

   

ARF Military Forum Opens in Seoul

Military experts from 14 Asian and Pacific nations opened a five-day conference in Seoul yesterday to discuss regional security and confidence-building measures. The Workshop on Defense/Military Officials' Cooperation within the ARF (ASEAN Regional Forum) drew about 35 participants for discussions on how to fend off supranational threats and promote military exchanges in the region. Organized by the graduate school of the Korea National Defense University, the forum has drawn representatives from seven nations of the 10-member ASEAN (Association of Southeast Asian Nations) and seven of ASEAN's 10 dialogue-partner countries, which include South Korea, the United States, Japan and China.

From http://www.koreaherald.co.kr/ 08/28/2002

Pacific Anti-Terror Plan Born

A SOUTH Pacific anti- terrorism strategy will be unveiled as the crowning feature of the three-day South Pacific Forum which ends today in Fiji. John Howard, who will make Australia a signatory to what is to be known as the Nasanini Declaration - after the Suva suburb where the annual regional heads of government forum is being held - warned that despite the apparent peacefulness of many Pacific states, the region could not afford to be complacent. "Nobody should assume the Pacific, tranquil and benign as it normally appears, is free of potential terrorists, because it's not," the Prime Minister said. The region has also moved to monitor the most unstable of its own members, Solomon Islands, which is still struggling to regain stability after a coup in 2000. This year's forum chairman, Fijian Prime Minister Laisenia Qarase, said a special group set up last year to monitor the Solomons' situation would continue. "The Solomon Islands is receiving top priority," Mr Qarase said. "There was a strong expression from leaders about helping out (the Solomons) in a number of ways." Mr Howard described it as a "step forward" for the Solomons that he hoped would result, in a year's time, in the country being "certainly more stable, certainly a stronger law-and-order position and hopefully a more attractive destination for investment". Australia's difference with the smaller island states over the Kyoto Protocol on climate change will be acknowledged in today's official forum communique, which also notes the work the Howard Government has done on reaching the Kyoto targets. "I actually regard the outcome of that particular discussion as very good, very positive," Mr Howard said. The 16 regional leaders at the conference had earlier agreed to the anti-terrorist strategy, including introducing new laws and measures against illegal immigration and transnational crime. Mr Qarase said the move was a direct result of the influx of asylum-seekers to the region and the September 11 terrorist attacks in the US. Mr Howard said he received no critical comments from other leaders on Australia's "Pacific solution" refugee policy as regional security had weighed heavily on the minds of forum leaders at this year's meeting. (by Mary-Louise O'Callaghan)

From http://www.theaustralian.news.com.au/ 08/17/2002

TOP°Ł

 

China Moves to Clean Up Postal Banking

Mainland authorities have moved to clean up cash deposit and withdrawal services provided by the Postal Service as part of a general crackdown on banking services. The People's Bank of China (PBOC), or central bank, has closed down 1,585 deposit outlets illegally set up by post offices, with 1,110 unqualified employees being fired, the Securities Times reported yesterday. The report did not say whether the central bank planned to outlaw the postal banking service despite growing concern that the Postal Service was developing into a de facto financial institution. The central bank began a nationwide crackdown on postal banking outlets in the second half of 2001. Problems found include disorganised management, weak internal controls, inaccurate statistics and incompetent employees. The newspaper said some local post offices had set up banking services and made structural changes without obtaining approval from PBOC. Postal deposit services have grown rapidly since a pilot scheme was set up in 1986, and at the end of October last year total deposits had reached 563.1 billion yuan (HK$530.9 billion), outperformed only by the Big Four state commercial banks. The International Financial News said the service has grown rapidly to now have more than 20,000 banking representative offices in 1,700 cities. The State Council gave permission for post offices to take deposits in 1999, with the intention to expand financial services and collect residents' savings for economic development. But the dual functions of the Postal Service makes it difficult to supervise. While postal banking is independent from the postal services in the business operation, it has no independent management and auditor. Problems also arise as postal banking offices cannot lend money. The Post Service transfers all money collected to the central bank and receives interest quarterly at favourable rates. As a result of the attractive revenues the banking arm has been elevated above the Postal Service's primary role, and employees compete to solicit deposits while paying little attention to postal services. Analysts have expressed concern that the Postal Service might become a financial institution if the situation is not brought under control.

From http://www.thestandard.com.hk/ 08/03/2002

Rules on Gov't Purchase Updated

Shanghai, the financial hub of the country, is adopting a string of new government procurement procedures, including an online procurement bidding regulation that was enacted earlier this week. The new regulation aims to help better oversee the burgeoning online government purchasing market, cut costs and raise purchasing efficiency, said senior city officials. Besides the new regulation, the city plans to quickly update its current legal framework regarding government procurement through revision of local regulations. The update is an urgent need that echoes the newly issued State-level government procurement law, the first of its kind in China designed to curb corruption and ensure fairness, according to Zou Huaxin, director of the city government's procurement centre, which handles major local government purchasing activities. "We have to create a reliable legal footing for further growth of the market," he said. Official statistics indicate that local government procurement expenditures hit 2.08 billion yuan (US$250 million) in the first half of this year, a nearly 45 per cent growth over the same period of 2001. The statistics also show that 143 million yuan (US$17 million) in budgeted purchasing funds were saved during that time. Mainly based on a public bidding system, the total Shanghai government procurement volume amounted to some 4.59 billion (US$553 million) in 2001, and the city expects an increase of 50 per cent this year. Seeing the market's continuous growth and the involvement of an increasing number of suppliers, the city government is considering the establishment of a supplier credit record system, according to Zou. Scheduled to be launched later this year, the system aims to provide purchasing agents with a reliable track record of the involved suppliers based on their past performance in local government procurement activities. "As an integrated part of a social credit system, it hopefully will help establish a standardized and trustworthy platform for all the suppliers," Zou noted. Such a move is, in fact, a further improvement of the city government's procurement system, which has been taking shape since 1995. In addition to a series of regulations, the city has set up a panel of nearly 500 non-governmental consultants that will share their professional know-how with procurement decision makers. Also, Shanghai recently invited 12 well-known local public figures, ranging from university teachers to company executives, as special social supervisors overseeing the city's government procurement activities. However, insiders say a lot remains to be done. "We urgently need more professionals in the area with ample experience and intimate knowledge of international practices. The after-sale service of involved suppliers should also be improved," said an official from the Shanghai Municipal Finance and Taxation Bureau, who refused to be named.

From http://www1.chinadaily.com.cn/ 08/03/2002

Systematic Reform Key in Land Protection

China is a populous nation with inadequate cultivated land. Whether the resource can be effectively protected is a key to our sustainable development. We have adopted rigorous land-protecting policies. However, cultivated land drainage remains a serious problem despite the central government temporarily halting approval of the use of cultivated land for non-agricultural activities in 1997 and 1998. Economic, political, legal and administrative systems are among the many factors impacting on the protection of cultivated land. Economically, the central government has failed to collect in full the compensation fees for using cultivated land from the local governments, a failure that has in a sense egged them on to take cultivated land for other use. The failure stems from China's divided central-local financial system. According to land administration law, 30 per cent of compensation fees are turned over to the national coffer and the remainder is reserved for local finance to turn into construction sites. In reality, however, some local governments take more than the 70 per cent share and the central government suffers. In 2000, for example, the central government received only 1.1 billion yuan (US$130 million). That year, 1.2 billion square metres of cultivated land was approved for non-farming purpose. If 20 yuan (US$2.4) is collected for each square metre of that land, the central government should have received 7.2 billion yuan (US$867 million), almost seven times more than it actually acquired. The central government's policies have changed continually, which also affects the implementation of the policy. To ensure its entitlement and curb local governments' wild use of the land, the central government should first strengthen the collection of its compensation fees. It should also maintain the continuity of its land policies and improve the land taxation system. The cultivated land tax system is based on geographical factors but quality of the land and its production potential should also be taken into account. The rate should be increased - it has not been changed for more than a decade. The legal system also needs to be clarified in relation to punishing illegal occupants of cultivated land. Although the law only stipulates that "the units occupying the cultivated land should be responsible for reclaiming the same amount of land in the same quality," it fails to make clear a punishment if the units do not reclaim the land. The lack of concrete responsibility means the law is virtually unapplicable. To remove the legal loophole, local legislatures should include provisions in local land protection regulations. According to the land administration law, cultivated land is collectively owned by farmers. The power to manage the land, however, is entrusted to village committees. It does not work properly in many places and does not guarantee the right of the farmers to collectively own and manage the land. This has led to the vacancy of land ownership, which encourages irrational use of cultivated land. To solve the problem, a new provision should be inserted so a cultivated land use agreement can only be implemented with the consent of two-thirds or more villagers. While the compensation system for occupied cultivated land is the most effective way to protect the resource, the compensation level should be increased.The current government official selection system, another contributing factor to the loss of land, needs to be addressed. Presently, the tenure of local officials is about three or four years and they receive appraisals for their work. But such a system tends to make officials adopt short-sighted policies to promote their careers. Some of the officials may sacrifice land for expanding urban constructions, which can be passed off as achievements. Blind urban expansion has led to a waste of cultivated land while much of the urban land is left unused. To amend this situation, cultivated land protection should be included in government officials' appraisals. A responsibility system should also be established to restrain use of the land. Land administration is under the leadership of local government and because of administrative subordination land administrators cannot effectively redress illegal occupation of the land. Land administration law stipulates that the land departments above the county level are entitled to supervise. However, there is nothing giving power to a higher body in the wake of illegal land use by local governments. Ministry of Land and Resources statistics show that local governments in Guangdong Province were associated with almost 60 per cent of all illegally occupied land in the province. A two-layer system of centralized land administration needs to be adopted to prevent power abuse by local governments which willfully occupy cultivated land. The land administration power of the municipal, county and township governments should be transferred to the provincial government. Meanwhile, the central government land administration should be given the power to supervise all land use. It can only assist in the protection of China's valuable and much needed cultivated land. Wu Cifang is director of the College of Southeast Land Management under Zhejiang University. Tan Yongzhong is a PhD candidate in the college.

From http://www1.chinadaily.com.cn/ 08/05/2002

 

 

Lawyer Liability System Adopted to Sharpen Edge

Lawyers in some major Chinese cities are introducing a professional liability system into the field in an effort to strengthen competitiveness. "The introduction of the professional liability system is an important guarantee of the creditability of lawyers," said Li Dajin, vice-president of the Beijing Lawyers Association. The new system will help improve lawyers' services, Li said, adding that concerns over lawyer misconduct must push law firms to strengthen their management. "The improvement in services using this system is in line with the rules of the market," said Li. "The system will influence the profession in profound way, making it quicker and smoother." In May, Li's association and the Ping An Insurance Company of China pioneered the industry by signing a contract under which the association, at an annual premium of 2 million yuan (US$240,000), can give a total of 400 million yuan (US$48 million) in compensation to parties whose economic losses can be proven to be the result of a lawyer's misconduct. According to Li, a special committee of the association has already taken up its first case in which a Beijing company claimed that the misconduct of three local lawyers caused great economic losses to the company. The courts have already ruled against the three lawyers. Minister of Justice Zhang Fusen said during a national conference late last year that a system of professional liability for all law firms is needed as they will face fiercer competition now that an increasing number of foreign law firms are expected to enter the Chinese legal service market as a result of the nation's entry into the World Trade Organization. "The lack of a professional liability system will not only become a barrier to competition by local law firms with their foreign counterparts, but will also hinder their exploration of the international market," Li said. Li Jingbing, a lawyer with the Beijing-based ZY & Partners, said that his firm's foreign clients have found the lack of such a professional liability system "unimaginable." He was confident that the introduction of this practice will help his firm break new ground in the foreign legal service market. The system, a common practice in the legal profession in foreign countries, is still new in China. There is no mention of it in the law governing lawyers, but sources with the Ministry of Justice said that a related regulation is being developed. The ministry is also working on a standard version of insurance contracts which stipulates under what situations compensation should be paid and how it should be paid. Meanwhile, cities and provinces are encouraged to try out the system with their law firms to prepare for possible compulsory implementation nationwide. Apart from Beijing, nearby Tianjin and East China's commercial hub Shanghai are also contacting insurance companies in hopes of introducing the system into the profession. An increasing number of companies have held lawyers and law firms liable for losses they have incurred. In one such case, a law firm in Shanghai was ruled by a local court to pay a whopping 2 million yuan (US$240,000) for their misconduct. It is estimated that there are at least seven or eight cases demanding a total compensation of more than 20 million yuan (US$2.4 million) from lawyers in Beijing.

From http://www.china.org.cn/ 08/06/2002

Gov't Duties Will No Longer Overlap

Local administration officials are dissolving some duties of different government departments in charge of food safety so that they no longer overlap. The city established a system of holding joint meetings on food safety among different departments to outline their respective duties and improve inter-department co-operation in 1989, six years before the Food Hygiene Law took effect, said Wang Ronghua, deputy secretary-general of the Shanghai municipal government. But government departments have preferred doing things their own way, creating headaches for those seeking streamlined co-operation. The laws on food hygiene, product quality and protection of consumers' rights all have provisions concerning the duties of different government departments in ensuring food safety. In this way, the Bureau of Health, the Quality and Technical Supervision Bureau, and the Bureau of Industry and Commerce each have jurisdiction over food safety. But this has led to repeated inspections and punishment of one food producer and lowered administration efficiency, said Liu Jianping, director of the Department of Supervision and Co-ordination of Law uder the Shanghai municipal government. Liu's office recently decided that the problem can be solved only if the three separate entities are joined together. The Bureau of Health will take the lead in enforcing the Food Hygiene Law. The bureau will work with the Quality and Technical Supervision Bureau in food production and co-operate with the Bureau of Industry and Commerce once the food enters the market. Liu said only one standard on food safety will remain, and no repeat inspection will be allowed. Officials from the three departments will meet to draft a list of unqualified food producers and release it to the public, he said. Peng Jing, deputy director of Shanghai's Bureau of Health, said they are exploring effective ways to make the new system work well. "One department could notify other departments after it has dealt with a market irregularity," Peng said. Peng also said a computer network could also help disseminate information among related government departments. The municipal government approved the plan last week. It will take effect later this month, Liu said.

From http://www1.chinadaily.com.cn/ 08/07/2002

China Releases New Regulations on Trademark Law

China's State Council yesterday released new Regulations on the Implementation of the Trademark Law of the People's Republic of China. The regulations, which consist of 59 articles in eight chapters, will take effect on September 15 this year, replacing the existing Detailed Rules on the Implementation of the Trademark Law. The regulations cover the application process of trademark registration, examination of such applications, transfer and inheritance of registered trademarks, management of trademark usage, protection of registered trademarks and other areas.

From http://www.asiapulse.com/ 08/12/2002


New Policy Boosts Legal Services

The Shanghai local judicial bureau recently announced a pilot policy to allow attorneys to leave law firms and become sole practitioners. The policy will bring great opportunities to Shanghai's lawyers and make it more convenient for locals who need legal counsel. But it also reminds us that more reforms are needed because current law still says a firm must have at least three lawyers. The Chinese lawyers' law was enacted in 1996. It pushed forward the country's historic legal reform of the 1990s, when most of the then State-run law firms were transformed into partnerships. Attorneys have been playing an active role since then in protecting private interests and promoting social justice. The status of lawyers is also rising as public awareness about legal rights increases. Sole practitioners were frowned upon in the past because legislators said it would be too difficult to supervise many solo firms. But lawmakers' fear was all for naught. The Ministry of Justice offers a strict bar exam every year to ensure that only people of the highest caliber join the legal profession. The registration and supervision system of lawyers and law firms also ensures their integrity. It's premature to say what revisions, if any, will be made to the legal statutes, but the introduction of sole practitioners is a good idea and should remain. In recent years, China has learned much from developed countries like Britain and the United States about how lawyers are licensed and who their clients are. Lawyers not only represent "high-end" business clients but also paupers at the grassroots level. In this sense, Shanghai's new policy will be a remarkable step in the reform of China's legal field.

From http://www1.chinadaily.com.cn/ 08/14/2002

Shanghai Issues New Policies to Attract Multinationals

Shanghai has drawn up new policies to encourage transnational companies and purchasing groups to establish their regional headquarters in the city. According to sources attending the opening ceremony of the Shanghai International Merchandising Center held in Shanghai on August 16, the new policies permit multinationals established in Shanghai to engage in foreign trade. In addition, employee training for international companies with their regional headquarters in Shanghai will be subsidized, and procedures for company personnel entering and leaving China will be simplified. The policies, however, require these companies to have big assets and have at least three subsidiary companies in China's mainland. Currently, over 70 multinationals have built their regional headquarters in Shanghai, including Alcatel, GE, Microsoft and Siemens. Jiang Yiren, vice mayor of Shanghai, said the city is working towards becoming a center for the world's giant purchasers and suppliers in three to five years.

From http://www1.chinadaily.com.cn/ 08/18/2002

China Gears Up to Halt Capital Flight

By next January, China will have rolled out an armoury of anti-money laundering measures in a campaign that suggests it is finally serious about a perennial problem that has seen billions of dollars leave the country. Two, quite separate, factors have focused the minds of top officials in Beijing. The first was the September 11 attacks and the impetus they gave to global efforts to track down terrorist funds. "They didn't want to be accused of being the bankers to bin Laden," said Steve Vickers, head of investigations at PwC in Hong Kong. "But they are also concerned about losing revenues, and modernising China from a cash-based economy." The second factor prompting change was more recent: one of the famous temper tantrums of Zhu Rongji, the Chinese premier, furious at the ongoing transfers, mainly of state funds by officials and managers of government-owned businesses. Even though the issues of terrorist funding and money laundering require different policing strategies, China may finally get a system that can reliably monitor underground cash flow s, whatever their origin. "I don't shine shoes in China, but I got the feeling that these guys were serious, and knew what they were doing," said a foreign consultant who has worked with China on the issue. The People's Bank of China, the central bank, has established new bureaux to monitor money flows, setting various triggers through the system, tied to amounts of cash, to alert them about suspicious transactions. Commercial banks too will have new controls in place by early next year, led by the Bank of China (BOC), the country's biggest foreign exchange institution. The BoC is setting the pa ce for good reason - it admitted earlier this year that at least three former officers had spirited away nearly $500m over seven years from a branch in southern China, and then escaped overseas. The law will also be overhauled by the National People's Congress to widen the definition of money laundering, which now only covers funds from smuggling, drug trafficking and crimin al gangs. Mr Zhu's anger on the issue derives from the fact that nearly every corruption scandal in China in the last decade has revolved around officials, or businessmen who have bribed them, fleeing overseas with large amounts of money. Banyue Zazhi, an official magazine, reported this week that over 4,000 people suspected of stealing state funds, or using their positions to take bribes, have fled abroad in recent y ears. They took with them about $600m, the magazine said, a figure almost certainly to be a gross underestimate as it barely exceeds the amount in the BoC case alone. The best known case involves Lai Changxing, now fighting extradition from Canada over charges that he masterminded the smuggling of $6bn worth of goods, operating out of the coastal city of Xiamen. Western countries with immigration programmes, especially Canada, but also the US and Australia, are the favoured destinations of corrupt officials and businessmen. Relatively low-le vel officials with small amounts of money, go to neighbouring countries such as Thailand, Malaysia and Russia, according to the magazine. "Some officials who cannot get visas to western countries choose to go to off-the-map places in Africa, Latin America and eastern Europe, and use them as a jumping off point," it said. Money leaves the country in different ways: illegal bank transfers, laundering at casinos in Macau and Las Vegas, and also through phoney overseas investment projects. "Very often, it can just go out of the country in suitcases," said one official. Estimates of capital flight have been put as high as $20bn a year, a figure calculated by looking at China's large trade surpluses, and the way they have not been reflected in its foreign reserves. But some analysts believe this amount is exaggerated, because the numbers for exports and imports are themselves wrong. There is an incentive to exaggerate exports, to get tax rebates from the government and impress local officials; and also reduce the figure for imports, so as not to pay duties. Whatever the correct number, the anti-money laundering campaign may, according to some analysts, signal a deeper current in Chinese politics, in which the old leadership can no longer protect their corrupt underlings. "Someone is driving this campaign," said one analyst, "and I believe we will see more China's young tycoons ending up in jail." (by Richard McGregor)

From http://news.ft.com/ 08/21/2002

Taipei: Mainland Affairs Council Eases Rules on Chinese Professionals

Procedures were introduced yesterday that will allow senior professionals who are Chinese nationals employed by multinational companies in Taiwan to apply for working visas. The government will now process, within 10 working days, applications submitted by companies for three-year working visas for Chinese nationals, their spouses and children under the age of 18. A special cross-ministry examination panel will take care of such applications to ensure speedy approvals. The change is effective immediately. The companies will also be able to apply to extend their Chinese employees' working visas for a year at a time for an unlimited number of years. The Mainland Affairs Council (MAC), announced the policy change following a meeting between Chairwoman Tsai Ing-wen and executives from various multinational companies' Taiwan branches yesterday. The council said that related ministries had held negotiations on the matter at the end of July, during which they reached a consensus to set up the examination panel to provide fast and easy application procedures for international companies' Chinese employees. Among those present at yesterday's meeting were Richard Vuylsteke, executive director of the American Chamber of Commerce; Guy Wittich, CEO of the European Chamber of Commerce; Kazuhiro Kasama, Director of Japanese Chamber of Commerce and Industry's Public Information Committee; and managers from United Airlines, General Electronics, Phillips, ING, Procter & Gamble and Sony. Jeff Yang, the director of the MAC's department of legal affairs, told reporters after the closed-door meeting that companies had welcomed the news. He said, however, that the new measure only applies to top executives and other senior managers, as well as "specialists" employed by multinationals and their families. Previously such people could only travel to Taiwan in accordance with the terms of a strict and complicated administrative order which categorizes Chinese nationals by individual professions and requires the government to carry out rigorous checks on each applicant. "We hope to provide fast and easy measures for Chinese nationals in international companies to come to Taiwan as we committed to doing so when applying to enter the WTO," Yang said. Yang said the WTO's General Agreement on Trade in Services states that the cross-border supply of services -- and also transactions involving the cross-border movement of capital and labor -- should be done "without unnecessary restrictions." The new measure also entitles international companies to apply for their Chinese business visitors and employees who need to attend training programs in Taiwan to come for one visit of up to two months (but extendable to 4 months) per year. According to Yang, the MAC is working on a separate, new and comprehensive administrative order to regulate migration of Chinese businessmen to Taiwan. "We have seen the urgent needs of international companies, and the special examination panel is a temporary measure to fulfill such needs. It will be abandoned as we produce more comprehensive regulations," Yang said. But for now, the new measure does not benefit Taiwanese firms. "In the new, comprehensive, administrative order regulating the migration of Chinese businessmen to Taiwan, we will consider to allowing domestic companies to hire Chinese nationals and entitle them to apply working visas for them. But that's the next stage," he said. (by Lin Miao-Jung)

From http://www.taipeitimes.com/ 08/21/2002

Washington Post Foreign Service

China issued new regulations today to control the export of missile technology, meeting a longstanding demand by the United States in a move apparently aimed at improving relations with Washington before President Jiang Zemin visits President Bush in Texas in October. The publication of the export rules seemed a significant concession in arms control talks that have been stalled for months, with China denying U.S. charges that it sells missile technology to countries such as Pakistan and Iran and condemning the United States for its own weapons sales to Taiwan. Chinese diplomats had previously said they would not publish the regulations until the United States lifted sanctions barring U.S. companies from launching satellites on Chinese rockets. The Chinese government had also objected to sanctions imposed on specific companies accused of exporting missile-related technology. But the Bush administration has expressed little flexibility on these issues, at least in public, and last month, the State Department announced new sanctions against nine Chinese companies that allegedly transferred sensitive equipment to the Middle East. Beijing's decision to publish the rules appeared intended to further strengthen ties with the United States that have been improving since China backed the U.S.-led war on terrorism after the Sept. 11 attacks. U.S. officials have made it clear that weapons proliferation is a "make-or-break issue" in relations with China, and President Bush pushed for new commitments from Jiang during his visit here in February. The new regulations were announced as Deputy Secretary of State Richard L. Armitage arrived in Beijing to discuss Jiang's upcoming visit to Bush's ranch in Crawford, Tx., reinforcing the sense that the decision is tied to the summit. The trip could be Jiang's last to the United States as China's president, and he is said to be eager to ensure that it is a success. The new rules do not explicitly ban any items from export, but they require companies that transfer technologies specified on a "control list" to obtain licenses and seek government approval for each transaction. They also require the companies to obtain guarantees from their customers that the technology will not be misused or resold. U.S. arms negotiators have urged China to publish the regulations, as well as the list of items subject to the rules, to make it easier to press for stricter controls. When Chinese companies export sensitive equipment, U.S. officials want to be able to say whether the companies are violating China's laws or whether those laws need to be tightened to include other equipment. The official New China News Agency published the text of the regulations but did not release the list of items subject to the rules. It was unclear whether the control list would be provided to the United States. Foreign Ministry spokesman Kong Quan said the regulations demonstrate that China "stands against the proliferation of weapons of mass destruction and their delivery systems" and meets its international obligations. China promised to publish the regulations as part of a deal in November 2000 in which it agreed not to help countries build missiles capable of delivering nuclear weapons. In return, the Clinton administration lifted sanctions preventing U.S. companies from launching satellites on Chinese rockets. Those sanctions were reimposed after evidence surfaced indicating China had violated the agreement. (by Philip P. Pan)

From http://www.washingtonpost.com/ 08/25/2002

New Draft Law Aims to Protect Environment

A draft law on environmental impact assessments will enable China to examine its development projects more closely to prevent pollution and achieve sustainable development, according to sources with the National People's Congress. Under the draft law, an environmental impact assessment - a national procedure for studying, forecasting and evaluating the likely impact of a proposed activity on the environment - could result in measures to prevent or abate any negative impact on the environment and offer methods and mechanisms to monitor such an impact. The draft legislation demands that administrative bodies make an environmental impact assessment of their land use, city planning, and regional construction and exploitation programmes, as well as their plans relating to agriculture, energy, forestry, manufacturing, tourism, transport, water resources, and the exploitation of natural resources. All construction projects will have to undergo an environmental impact assessment, according to the draft law. Currently, more than 90 per cent of relevant projects in China have undergone such tests in the past decade, according to the congress sources. Senior legislators started to review the draft legislation in December 2000. The draft was submitted to the latest session of the congress Standing Committee for a second reading last week. Debate among senior lawmakers at a panel discussion at the weekend focused on whether the nation should have conduct environmental impact assessments of its strategic policies or decision-making process. Legislator Li Meng said it is more important to have environmental impact assessments of national policies, which would be conducive to pollution control and prevention. Li said such evaluations started in the 1970s elsewhere in the world and that seven countries - including Canada, Germany and the United States - have passed legislation demanding environmental impact assessments on national policies and plans. But legislator Zhang Haoruo said it is not practical to introduce such a requirement now. He proposed that the environmental scrutiny of national policies be conducted at some time in the future when conditions are "more mature."

From http://ce.cei.gov.cn/ 08/26/2002

CHINA: CCP Sets November 8th Date for 16th National Congress

The Communist Party of China (CPC) has put to rest months of speculation and announced the date of the party's 16th National Congress. It is to convene in Beijing on November 8. Despite rumors that the party's chief, President Jiang Zemin, 76, would cling to power, the congress is expected to pave the way for the first orderly transition of power in the history of communist China. Five of China's top seven leaders at the all-powerful Politburo, as well as half the country's ministers and provincial leaders, are to be replaced at the congress. The Political Bureau of the CPC Central Committee decided at a recent plenary meeting to propose the November date to the Seventh Plenum of the 15th CPC Central Committee to be held soon. The congress typically lasts about a week. Past party congresses - they take place every five years - have usually taken place in September or October, and it is widely believed that this year's meeting was delayed so that Jiang would hold China's top jobs when he visits President George W Bush's ranch in Texas, on October 25. After meeting with Bush, Jiang is to attend the Asia Pacific Economic Cooperation (APEC) leaders' summit in Mexico. Jiang is also expected to step down as president next March. Jiang and other leaders over the age of 70 are due to step down at the congress, although rumors have persisted that Jiang wants to remain as head of the party rather than hand over to his designated heir, Vice President Hu Jintao. Another rumor had it that Prime Minister Zhu Rongji could stay on as well to help handle China's first years in the World Trade Organization. The 16th CPC National Congress, the first in the new century, takes place at a time when China has entered a new development stage of accelerating its drive to modernize its brand of socialism, state media said. The congress will hold high the banner of Deng Xiaoping Theory and comprehensively carry out the important thoughts of Jiang's "Three Represents", which call on the CPC always to represent the development trend of China's advanced productive forces, the orientation of China's advanced culture and the fundamental interests of the overwhelming majority of the Chinese people. Jiang's theory calls for opening the doors of the party, which traditionally represents workers and peasants, to private entrepreneurs, a group with a stake in promoting economic reform, private property rights and the rule of law. The congress will review the party's work in the past five years since its 15th National Congress, and sum up the basic experience the party has acquired from its efforts to unite and lead people of all ethnic groups for the great practice of building socialism with Chinese characteristics since the beginning of reform, especially since the Fourth Plenum of the 13th CPC Central Committee in 1989. The congress is also expected to make strategic arrangements for the overall advancement of China's reform and socialist modernization drive, as well as for the overall advancement of the grand project of Party building in the new century and the new development stage. The announcement of the date of the congress follows three weeks of secretive talks on the leadership change in the seaside resort of Beidaihe that wound up in mid-August. China's rulers have given little clue on what was decided, fueling the rumors of disagreement in the corridors of power. A new CPC Central Committee and a new Central Commission for Discipline Inspection will be elected at the congress.

From http://www.atimes.com/ 08/27/2002

China to Open Garbage Disposal to Private Sector

China has decided to end government monopoly of public garbage disposal and open it up to the private sector, the Construction Ministry has announced. Rapid urbanization has increased garbage in Chinese cities by five to eight percent every year. Though the percentage of treated garbage has soared to over 58 percent from two percent in the early 1980s, there is still more work needing to be done. Governments at all levels have been entirely responsible for investment in and management of garbage disposal. However, government investment can no longer pay for the increase in garbage. Ministry officials said public bidding -- open to both foreign and domestic investors and entrepreneurs -- would be held to choose investors, builders and operators in garbage disposal. The Construction Ministry is already inviting joint venture, cooperative, foreign-funded and non-governmental enterprises into the sector. These enterprises will compete in the market after receiving approval.

From http://ce.cei.gov.cn/ 08/28/2002

Draft Law to Shield Individual Investors

Senior lawmakers on August 27 debated a draft law on stock investment funds, which aims to enhance the protection of individual investors in the stock market. Zhu Shaoping, a legislative official with the Finance and Economic Committee under the National People's Congress, China's top legislature, said: "The most important guideline for the draft law is to protect investors who are willing to give money to fund managers only when their legal interests are well guarded." Much of the proposed legislation was drafted by Zhu's committee and the draft law has been undergoing a preliminary reading by senior legislators in their ongoing session. Zhu said the draft law pays special attention to the protection of individual investors because they are generally weak in shielding off investment risks and are more vulnerable to market fluctuations. Zhou Zhengqing, vice-director of the committee, told yesterday's panel discussion on the draft law: "It is one of the fundamental ways to protect individual investors and bring more institutional investors into the market." Zhou said the stock investment funds of institutional investors could bring a stable return on investment through the use of professional fund managers. Stock investment funds are mainly mutual funds that invest primarily in stocks and are operated by investment companies. Legislator Zhang Haoruo said that rational institutional investors would become a stabilizing force in the Chinese mainland's immature stock market and help make the market more orderly. The draft legislation demands that investment companies make a timely disclosure of information on major issues such as investment structure and the net assets of the funds. It also says that holders of stock investment funds have the right to convene a meeting of fundholders to participate in major decision-making processes. Such meetings could be held in one particular location or via the Internet by more than 50 per cent of fund holders. Legislator Tong Zhiguang said it would be difficult to gather together more than half of the fund investors for a meeting. Legislator Gu Shanqing complained that such a provision was not practical and should be deleted from the draft law. But legislator Li Yining, who is also vice-director of the committee, said it is necessary to hold such meetings because fund investment entails risks.

From http://ce.cei.gov.cn/ 08/28/2002

Senior CPC Leader Stresses Science, Education Strategy

Chinese Vice-Premier Li Lanqing Thursday said China will continue to implement its strategy of invigorating the country through science and technology. Addressing a national meeting of senior executives of major colleges and universities, Li said science and technology and education would decide the destiny of China in the new century. He called for greater efforts to promote the development of science and technology and education across the country in a bid to promote investment in human resources and technological innovation and commercialization of technological achievements. The vice-premier also talked about the country's economic and social situation since early this year. Among those attending the conference were Ding Guangen, a member of the Political Bureau of the Central Committee of the Communist Party of China (CPC) and head of the Publicity Department of the CPC Central Committee, and Zeng Qinghong, head of the Organization Department of the CPC Central Committee.

From http://news.xinhuanet.com/ 08/29/2002

Japan: Emergency Defense Legislation Believed Too Vague

Political dynamics aside, even some Defense Agency officials admit the emergency-contingency bills the ruling coalition plans to carry over to the next Diet session were flawed from the start. The bills, hastily prepared under the initiative of Prime Minister Junichiro Koizumi, are far from perfect, the officials say, because they are the product of compromise and fail to satisfy either doves or hawks. The legislation, which would outline how Japan would respond to a military attack, has been a longtime taboo under the war-renouncing Constitution. To raise support for the legislation, Koizumi tried to seize on the fear created by the Sept. 11 terrorist attacks in the United States and an incident in December in which Japan Coast Guard vessels exchanged fire with a suspected North Korean spy ship, which later sank in the East China Sea. But the proposed legislation fails to address how Japan would respond to these new types of threats, which are now considered greater than more conventional forms of warfare. Koizumi's Liberal Democratic Party had to strike a compromise with coalition partner New Komeito, which expressed reluctance over expanding the Self-Defense Forces' scope of activities. Meanwhile, Diet deliberation over the bills has fueled public concern that the legislation may drag Japan into U.S.-led military campaigns in the region. According to experts, the need for attack-response legislation arose in 1997, when Japan and the U.S. updated their bilateral defense cooperation guidelines, which require Japan to provide logistic support to U.S. military operations in the event of emergencies "in areas surrounding Japan." The 1999 law to facilitate the bilateral defense guidelines limits Japan to providing logistic support to U.S. forces in noncombat areas. The proposed attack-response legislation would cover "a military attack situation" or when such a situation is "feared" or "predicted." The definitions in the bills are so vague, according to critics, they leave the door wide open for the government to initiate war preparations under a variety of pretexts. During Diet discussions on the bills, the opposition camp charged that the legislation could easily be applied if the U.S. military were to intervene in the region, dragging Japan into a conflict -- including deployment of the SDF. The government did little to dispel such concerns. Chief Cabinet Secretary Yasuo Fukuda told the Diet the situation assumed in the proposed legislation and the one in the 1997 guidelines are different, although he admitted the two can coexist, depending on how things develop. Fukuda said that if SDF units were attacked while engaged in logistic support for the U.S. in either the open sea or in foreign territories while responding to an "emergency in areas surrounding Japan," this would constitute a "military attack situation." The gray area surrounding the definition of a "military attack situation" led New Komeito member Masao Akamatsu to comment in the early stages of Diet deliberations, "I feel like I should quit supporting the bills." Some Defense Agency officials believe that effective defense legislation cannot be achieved as long as the government interprets the Constitution as banning the nation from exercising its right to collective defense. "The (proposed) legislation is like an operating manual for a tool," a senior agency official said. "It is impossible to write the manual without mentioning what the tool is to be used for." According to the official, there is no use in discussing the defense bills while the government continues to avoid entering into any substantive debate on Japan's national strategies, including cooperation with the U.S. in security affairs. "Only the Japanese Communist Party talks (about holding any substantive discussion), claiming the legislation is aimed at involving the nation in a U.S.-led war," the official said. The bills have also been criticized by local government leaders, who would be directly responsible for the safety of their citizens in times of crisis. While the legislation would give prefectural governors greater power to allow for smooth military operations under national government instructions, it does not detail measures to be taken to protect the lives and properties of citizens. The bills call for the government to take additional legislative measures to ensure the public's safety, including measures for evacuation, transportation and communications, and maintenance of social infrastructure and order, within two years of the bills' passage. Some of the measures could limit the rights of individual citizens. The government is effectively demanding unconditional public support by proposing emergency legislation that lacks concrete details on how it would be carried out, according to critics. At a meeting in June of national government officials and prefectural governors in Tokyo, several governors expressed concern that the contents of the additional legislation remain unknown. They were told by government officials that the measures will be prepared within two years. Hyogo Gov. Toshizo Ido, whose prefecture bore the brunt of the 1995 Great Hanshin Earthquake, said the national government should also clarify what they are empowered to do in emergencies rather than merely asking governors to cooperate with Tokyo, according to officials who briefed reporters. Gov. Hiroshi Okazaki of Kanagawa Prefecture, which hosts a number of U.S. military installations, including the Atsugi Naval Air Station and Yokosuka naval base, urged the government to present concrete ideas of the envisaged laws that would govern U.S. military activities within Japan during an emergency. The government and the ruling coalition initially said they would include the U.S. military-related legislation in the current package of bills. However, they eventually dropped the plan because the Foreign Ministry deemed it unnecessary in light of the bilateral Status of Forces Agreement. The proposed legislation again stipulates that the government must prepare such a legislative measure within two years. (by Takuya Asakura)

From http://www.japantimes.co.jp/ 07/31/2002

BOJ to Keep Monetary Policy as Is

Amid a worldwide slump in share prices, the Bank of Japan announced Friday it will keep its monetary policy unchanged, maintaining its wait-and-see attitude as it continues to pump excess funds into money markets. The decision comes as the nation's economic outlook becomes increasingly uncertain and as signs of downturns in overseas markets, particularly the United States, grow more ominous. Not only have corporate accounting scandals triggered falls in share prices, but U.S. economic indicators for August show weakening consumer confidence and downturns in nonmanufacturers' business assessments. The central bank will keep force-feeding money into private-sector banks' current accounts at the BOJ to keep the balance at between 10 trillion yen and 15 trillion yen, the BOJ Policy Board decided in a unanimous vote. Despite weak domestic demand, board members are expected to have upwardly revised their assessment of the economy for the sixth month in a row, based on improvements in industrial production indicators. But concern over the nation's outlook is still growing. Signs of weakness in the U.S. are bad news for the nation's export-dependent economy. Since March 2001, the BOJ has been injecting ample liquidity into money markets in the hope that some of the funds will find their way to companies and individuals, stimulate demand and halt price falls.

From http://www.japantimes.co.jp/ 08/10/2002

New ODA Plan to Involve Local Municipalities

The Foreign Ministry has decided to introduce a new type of official development assistance, initiated by Japan's local governments, to finance projects for foreign countries. Ministry sources said Sunday the ministry will launch the new program in fiscal 2003. The goal is to rejuvenate Japan's ODA and respond to criticism that conventional ODA projects are standardized and tend to focus on big public works, such as huge dams and roads. The new ODA will support local government aid projects to foreign countries, such as those involving tree planting and the training of municipal officials, according to the sources. Such ODA will also likely benefit Japan's local governments by boosting international exchanges at the local level and raising the profile of Japanese municipalities abroad, according to the sources. The ministry plans to submit a request for funding by the deadline at the end of this month for fiscal 2003 budgetary allocations. The funds would help launch the new system and cover related expenses, the sources said.

From http://www.japantimes.co.jp/ 08/19/2002

Koizumi Sets Stage for U-Turn in Bank Policy

The administration of Junichiro Koizumi, Japan's prime minister, on Thursday set the stage for one of the most significant policy U-turns in its 16-month rule by indicating that it may keep in place full government guarantees on ordinary bank accounts. Full deposit guarantees were introduced in June 1996 to shore up confidence in the banks after a series of collapses. Their scheduled removal next April and replacement with a £§10m ($83,500) cap was supposed to signal that the banks were strong enough to stand alone.The Financial Services Agency, the main regulator, said on Thursday that the maintenance of full guarantees on ordinary accounts that paid no interest was under consideration but cautioned that it was a proposal and not yet policy."If it goes ahead it would be a big step backward and call into question the government's sincerity and the reform process under Mr Koizumi," said Brian Waterhouse, banks analyst at HSBC Securities.There are fears that, as the deadline for the introduction of the £§10m cap approaches, depositors will shift accounts from weaker banks to stronger banks, potentially triggering a run on certain institutions and forcing them into insolvency.Richard Jerram, economist at ING, said several institutions might not survive the changes to the insurance scheme next April. "The government would be taking a significant risk if it allowed deposit insurance reform to go ahead as planned unless there was confidence in the health of the financial system."The Tokyo metropolitan government confirmed this week that it is to start moving its funds to banks it has determined are financially strong and away from banks it deems to be under pressure.Individual depositors have also started shifting funds to banks that they have deemed "too big to fail", such as the large city banks, putting pressure on regional lenders that is set to increase as the April deadline approaches.Mr Koizumi's political style has been characterised by bold reform policies subsequently watered down in order to get them implemented. The prime minister in July approved a vastly diluted bill for the reform of the postal services - an issue on which he had said he was inflexible.Mr Jerram summarised the problems with his policy of compromise. "If you are going to impose limits on deposit insurance then you need to have a healthy banking system that enjoys the confidence of depositors. Alternatively, if you are going to persist with unlimited deposit insurance, then there is less pressure to create a sound banking system." (by David Ibison)

From http://news.ft.com/ 08/22/2002

Korea: Ministry Stepping Up Efforts to Legalize Five-Day Workweek

Clearing the way for the introduction of a five-day workweek, the Labor Ministry is speeding up efforts to revise the labor law following the rupture of negotiations among labor, management and government last week. As part of the efforts, Labor Minister Bang Yong-seok held a breakfast meeting yesterday with personnel executives of some 30 conglomerates to hear their opinions on the shortened workweek. At the meeting, Bang explained to corporate executives the ministry's direction for the rewriting of the labor law as well as the course of the failed talks. "The government is pushing for the legislation of the shortened workweek because further delay would pit labor against management over the issue, making labor-management relations of each workplace unstable," the top labor policymaker said. "Given that, corporations will have to cooperate with the government in legalizing the new system." The ministry plans to draw up a revision to the Labor Standard Act and submit it to the National Assembly for approval around September, the minister said. Bang also said he was disappointed that more than two years of negotiations came to naught, even though the three parties had been close to agreement on most of the thorniest issues. Last Monday, labor, management and government representatives held a final meeting to seek a consensus on the introduction of the five-day workweek, but failed to iron out differences on key issues. Sticking points include maintaining the current income level and granting workers between 15 and 22 days of paid leave per year. Under the proposed five-day workweek, the legal working hours will be cut from the current 44 per week to 40. The Korean Tripartite Commission, a presidential advisory panel, served as mediator to the negotiations. Although the shortened workweek has yet to be written into law, banks and some provincial governments have started pilot programs, allowing their employees to take one Saturday off a month. Bang said that labor-management relations this year have been the most stable since 1987, with strikes at large workplaces dropping significantly. "However, industrial relations may deteriorate because labor and management may clash over the five-day workweek and the proposed introduction of a labor union for government employees," he added. (by Kwak Young-sup)

From http://www.koreaherald.co.kr/ 08/01/2002

New Publishing Law Draws Mixed Response

A new law that aims to reset the rule of competition between the conventional and emerging sectors of the publishing industry is drawing mixed response due to conflicting interests of each party involved. The National Assembly passed a bill into the Law on Promotion of Publishing and Printing Industry last Wednesday that reins in the widespread industry practice of online book retailers offering "excessive" discount rates. According to the new law, online operators will not be allowed to offer discounts of more than 10 percent for book titles less than a year old. Cho Yoo-sik, president of the online book retailer Aladdin, expressed Saturday his intention of taking the case to the Constitutional Court of Korea. "The new law is intended to regulate consumer prices which should be based on free market economy," said Cho. "It thus infringes upon lawful basic rights of consumers and the private sector as stated in the Constitution." In the initial stages of online book marketing, books were offered more than 30 percent off the retail price by Web-based retailers to secure a bridgehead in the market dominated by giant brick-and-mortar bookstores. The competition got even stiffer with a growing number of online marketers joining the business, putting pressure on both themselves and publishing houses. But such online marketing practices backfired in 2000 and invited a collective protest from conventional bookstores who threatened to deal sternly with publishing houses in business with online operators. Since then, the book sales market has maintained an awkward peace with each party conceding altogether until the latest law governing cyber sales practice was enacted. Under the law, which concerns only book titles less than a year old, there are no prohibitive regulations on the scope of discount rates for book titles that are older than a year. The new law, drafted by 32 lawmakers in a bipartisan initiative, will go into effect next February, after fine-tuning relevant administrative regulations for the next six months. Brick-and-mortar bookstores and publishing houses welcome the new marketing guideline as specified in the law. "Online bookstores have shaken the foundation of the book distribution system, but the new law will restore order to the market and provide a fair rule of competition that will benefit all parties involved," said Park Hyung-dong, an official at the publications division of the Ministry of Culture and Tourism. An industry veteran suggested a more telling side of the theory concerning online marketers' expansion-oriented policy based on low prices. "In many cases, the prime motive of offering sweeping discounts is to attract more consumers and expand their sales revenues to make their company look big and impressive," said the official on the condition of anonymity. "The bigger they look, the higher chance they would have in their effort to get enlisted in the Kosdaq market. "With the prospect of getting listed on the stock market in sight, these online operators could endure some losses or slim profits of today incurred by their profit-bleeding discount policy," he added. However, online operators rebuff such a conspiracy, disputing what they see as a long-term effect of the law. "The new law, created under the pretext of boosting the cultural industry, is putting a constraint on dynamic development of the local publishing industry, making it more vulnerable to outside competition," Cho said. "Who should be to blame when the Korean publishing industry becomes just another plant in the greenhouse?"

From http://www.koreaherald.co.kr/ 08/05/2002

Macroeconomic Policies Likely to Be Adjusted

The government is considering a forthcoming change in its macroeconomic policy, as economic conditions at home and abroad have deteriorated amid growing fears of a double dip downturn in the U.S. economy. An official at the Ministry of Finance and Economy said yesterday that Deputy Prime Minister Jeon Yun-churl would convene an economic ministers' meeting early next week to discuss a possible change in current macroeconomic policy. ``We have no choice but to shift macroeconomic policy, in the case that economic indicators continue to deteriorate in the coming months,'' the official said, noting that the government maintains that the economy is still recovering despite financial turbulence in the U.S. He said the government had concluded as late as mid-July that the nation's economy was still on track for full recovery, because facility investment and exports, the main engines for economic growth, showed signs of robust recovery. He pointed out, however, that economic conditions have rapidly worsened since late July, as the hobbled U.S. economy has raised fears that the world richest economy could undergo a double dip recession, in which the economy suffers a renewed contraction after several months of recovery from a previous downturn. Ministry officials are now expressing concerns that turbulence in U.S. financial markets will deal a serious blow to local stock markets as well as domestic demand and facility investments, denting investor confidence. The Seoul bourse plunged to a yearly low of 675.76 Tuesday, on the back of a selling spree by foreign investors triggered by a sharp fall in U.S. stock markets. In addition, a recent survey of 600 businesses conducted by the Federation of Korean Industries showed that business confidence has deteriorated, with the survey index falling to 100.3, its lowest level since last October. In particular, business leaders fear that the economy could slip into recession due to a contraction in private consumption, which played the leading role in rehabilitating the economy during the course of the recovery. Market analysts said that although the nation's exports grew by 19.9 percent in July, posting a two-digit increase for the first time in 21 months, this could not be interpreted as a sign of export recovery in light of the previous year's poor performance. They added that the rapid rise of the won versus the dollar over the past three months could drag down the nation's exports, noting that in general it takes two to three months for fluctuations in the won-dollar exchange rate to have a discernable impact on the economy.

From http://search.hankooki.com/ 08/07/2002

Market Participants Invited to Assess Watchdogpolicy

In a surprise move, the Financial Supervisory Service (FSS) said yesterday that it has decided to invite market participants to evaluate its policies in order to establish a more dynamic and innovative regulatory regime. The FSS said rapidly changing external and internal conditions, such as the opening of domestic financial markets, the wave of mergers and acquisitions in the financial sector, and a more market-disciplined regulatory environment has made it necessary to create a higher-level regulatory framework. The FSS thus plans to form a group of 50-60 market participants, including members of the press, financial experts and ordinary investors to evaluate the watchdog's policies. The assessments will center on the work done in individual departments last year and core policies that had the biggest impact on the economy and everyday life, in order to efficiently gauge their timing and efficiency. This group of external auditors will also conduct concentrated assessments of two policies each year, which will then be reflected in the following year's policy decisions. Separately, the FSS said it is planning a series of joint-inspections with the Korea Securities Dealers Association (KSDA) on at least 30 securities firm branches across the nation during the second half of the year. Employees from both the financial watchdog and KSDA will join hands to launch inspections aimed at weeding out securities firm branches engaging in illegal activities, especially where fund managers and investment advisors are involved. "Our inspections will be conducted on a minimum 30 branches as we hope to review the operations of around 50-70 branches this year," one FSS official said. In the earlier first half, the financial watchdog had examined about 20 brokerage branches. In its April inspections, the FSS had either closed down or suspended eight branches, including Shinhan Securities' Gangnam office.

From http://www.koreaherald.co.kr/ 08/07/2002

Trade Law Likely to Quicken ROK-US FTA

Seoul officials are reviewing the implications of the U.S. Trade Promotion Authority (TPA) bill that President George Bush signed Tuesday following its passage by Congress last Friday. The passing of the bill would not lead to any immediate signing of a free trade agreement (FTA) between Seoul and Washington, but on a medium-and long-term basis, it would facilitate the FTA, they said. The Korea International Trade Organization (KITA) has predicted that textile and apparel exporters would be hit hard. Under the TPA, the Congress has given a broad trade negotiating power to the. president and Washington is expected to soon sign FTAs with countries such as Chile, Singapore and Australia. With the TPA, the U.S. president is able to negotiate trade deals, whether they be bilateral or multilateral talks, without having to be concerned that the U.S. Congress could amend the deals later on, as Congress only retains the authority to veto or accept deals the White House signs with other nations. Unlike the other countries, the TPA is not expected to bring forward the signing of agreements between Korea and the United States in a short run, including a bilateral investment treaty (BIT) or an FTA. ``The TPA that we have backed is great because it will allow the US government to move forward with its free trade agenda. However, there will be no impact on Korea in the short term. The current US-Korea BIT talks are stagnant due to both governments' inability to reach an agreement on the major stumbling bloc, namely the screen quota issue. Once the BIT is negotiated and settled, then bigger FTA talks between both nations will happen,'' said Maggie Kymm, head of policy and research at the American Chamber of Commerce in Korea (AmCham Korea). Business leaders from both countries have called for the signing of an FTA. Studies on the possible economic benefits of an FTA have been conducted but official negotiations have yet to be conducted because of disagreement over agricultural and other issues. In 2001, the U.S. International Trade Commission (ITC), an independent U.S. federal agency, reported a U.S.-Korea FTA could result in increased bilateral trade, particularly in agriculture, textiles, apparel, and leather goods. ``It seems to be clear that Korea is not one of the priority countries with which Washington is seeking to conclude an FTA at this stage,'' said Cheong In-kyo, senior research fellow at the state-funded Korea Institute for International Economic Policy. ``But in the medium to long term, a TPA could facilitate trade talks between Northeast Asian countries, including Korea. These countries are somewhat alienated in trade negotiations compared with other regions,'' he added. Cheong predicted that if Washington does not get a satisfactory result at the Doha round of the World Trade Organization (WTO), it will probably push for FTAs with as many trading partners as possible, including Northeast Asian countries. ``Under this scenario, the TPA could help quicken a Korea-U.S. FTA in the long term,'' he added, suggesting the government strengthen studies into the possible impacts of a Korea-U.S. FTA. Meanwhile, the KITA expected the TPA to have a negative impact on the local textile and clothing exporters as the TPA will ease the import of textiles and apparel from Caribbean and African nations through better bilateral trading regimes. ``The TPA may be used to open such areas as services, intellectual property rights and e-commerce wider. But it will also offer Korea an opportunity to explore new markets as it facilitates market liberalization around the world,'' according to a KITA report. However, KITA is concerned that local products may lose in price competitiveness in the U.S. market to economies that sign FTAs with the White House. (by Seo Jee-yeon)

From http://search.hankooki.com/ 08/08/2002

Policy Committee Issues Report Card on Government's First-Half Performance

A policy watchdog held a meeting in the presidential office of Cheong Wa Dae yesterday to announce their assessment of 64 major government policies during the first half of this year. The Evaluation Committee comprising figures from academic and economic circles as well civic organizations said 168 items, or 80 percent, of the 211 sub-divided sections were rated "excellent" or "appropriate." The the other 43 were judged as needing adjustment or reform. "The government has helped enhance the national image by successfully hosting the 2002 World Cup and achieved relatively high economic growth of 5.7 percent despite the worldwide economic recession," the committee said at the meeting attended by President Kim Dae-jung. The committee pointed out, however, that the government should lay out complementary measures to solve problems arising from the privatization of state-run corporations including Korea Electric Power Corp. and Korea Tobacco & Ginseng Corp. It criticized the government's ability to efficiently deal with a growing number of North Korean defectors and noted that preventive measures against North Korean provocations are seriously lacking. "Related agencies should come up with measures to head off any further intrusions across the Northern Limit Line," it said. "Intra-agency discord caused delays in enacting laws concerning advanced technology, and disinfection and quarantine programs for cholera and foot-and-mouth diseases were insufficient," the committee said. On the economic front, the policy watchdog said the figures looked healthy, with foreign exchange reserves the fourth largest in the world at $112.4 billion and unemployment kept at a low 3.2 percent. The committee said unification, foreign affairs and security areas have made progress in peacefully resolving inter-Korean issues thanks to presidential envoy Lim Dong-won's visit to Pyongyang in April and recent agreements between the two Koreas. Government agencies whose performances were lauded include the ministries of Environment, Maritime Affairs and Fisheries, and Government Administration and Home Affairs.

From http://www.koreaherald.co.kr/ 08/10/2002

N.K. Devalues Currency as Part of Economic Changes

North Korea drastically devalued its currency this past week as part of a reform program designed to revive its dilapidated economy, according to foreign residents in the communist country. North Korea lowered its exchange rate from $1 to 2.15 won - a rate widely seen as out of step with economic fundamentals - to $1 to 150 won, the residents said on condition of anonymity. The black market rate is $1 to 200 won. The North Korean government did not make an official announcement, in keeping with the secrecy surrounding its economic changes, which also include large price and wage increases. The policies include market-based elements, although North Korean officials have described the reforms as a way to strengthen central planning, not disband it. Residents said the buying rate was 150 won to the dollar and the selling rate 152-156 won. A Western diplomat in Pyongyang said efforts to change money at the new rate were mixed. He said a colleague could not change dollars for won in the state Foreign Trade Bank, but could do so in a department store. He said the few shops he had visited that take payment in dollars had not raised their prices, but dollar prices for hotel rooms had increased. Shops and hotels that cater to foreigners demand U.S. dollars to meet the country's need for hard currency. Years of mismanagement have plagued the economy, and famine struck in the 1990s, killing hundreds of thousands. The North relies heavily on outside food aid. North Korea's currency reform is unprecedented in a country where the state distribution system had obviated the need of many residents for money. But as the system broke down, North Koreans became desperate for hard currency. The result was a two-tiered system where foreigners and the North Korean elite exchanged dollars for special currency notes, or so-called "blue won." The regular North Korean won, called "brown" because of its shabby appearance, was marginalized. "The new (exchange) rate is applied to the 'normal' brown won," a foreign resident said. "So the multitiered currency system seems to be on its way out." Observers say that other changes underway in North Korea include a partial dismantling of the rationing system, a pillar of economic policy since the 1950s.

From http://www.koreaherald.co.kr/ 08/12/2002

N.K. to Reform Economic Policy: Chinese Amb. Li

Chinese Ambassador to South Korea Li Bin said yesterday he expects North Korea to embark upon a phase of economic reform and open-door policies. In a special interview with Yonhap News Agency marking the 10th anniversary of establishing diplomatic relations with South Korea later this month, Li said North Korean leader Kim Jong-il's recent decision to take economic reform steps was made out of a need to meet the challenges of a new era. Reports emanating from the North suggest price and wage increases as well as other measures have been taken in a bid to overcome the country's chronic economic plight. "After his visits to China, Kim Jong-il stressed several times that North Korea must quickly overcome its economic difficulties and develop a new economic framework," Li said. "North Korean officials in charge of economic affairs have been to China on many occasions since Kim's visit." The Chinese government hopes the North's policies will prove a success, the ambassador said, adding that Beijing would continue to offer assistance to Pyongyang to that end. Asked whether the North is following China's blueprint for reform, Li said, "North Korea has sought ways of developing its economy in its own way and has begun to carry out its own development policies." Concerning the ongoing nuclear debate, Li said the United States and North Korea should abide by the Geneva agreement and that the two sides should resolve the issue through dialogue. Beijing supports the sunshine policy toward North Korea applied by President Kim Dae-jung, Li said, adding, "The Chinese government backs the independent and peaceful unification of the two Koreas and has played a positive role (toward achieving that goal)." China's policies toward South Korea and the Korean Peninsula as a whole will remain unchanged even after the 16th National People's Congress this fall, when a new Chinese leadership will emerge, he said.

From http://www.koreaherald.co.kr/ 08/17/2002

Pioneer Project in Mongolia Supports Preschool and Disabled Children

MANILA, PHILIPPINES - Preschool and disabled children in Mongolia will be given a new lease of life through an SDR 10.806 million (US$14 million equivalent) concessional loan approved by the Asian Development Bank (ADB). The Second Education Development Project (SEDP) will be financed by the ADB loan as well as by grants totaling US$45 million equivalent from the Japanese government, a concessional loan of US$4.8 million equivalent from the Nordic Development Fund (NDF) and US$4.7 million equivalent from the Mongolian government. "Our new project will improve or build new schools for over 100,000 kindergarten, primary and secondary school children, including 2,000 children with disabilities who will be brought into the system for the first time," says ADB project economist Robert Schoellhammer. "Formerly, children with disabilities were segregated and this pioneer component under ADB's social protection policy seeks to bring them into the mainstream to fulfill their potential and contribute productively to society." The partnership between ADB, Japan and NDF will allow SEDP to benefit from their combined global experience, financial resources and technical expertise in education development. It also sets new standards for cooperation between development partners in Mongolia, allowing more efficient use of external funds and for nationwide coverage in developing high quality education services for all, in line with Mongolia's adherence to the Millennium Development Goals. In the cities, the project will aim to increase the number of school places in the poorest areas, especially communities where families live in traditional gers (tents). In the rural areas, the project will provide dormitories so children from nomadic families can board at school. As well as helping more children to go to school, the project will ensure that they receive a high quality education. This will be achieved through investing in teacher training, providing modern textbooks, as well as modernizing science programs and integrating ICT (information and communication technologies) into the curriculum. The executing agency for the project, due to be completed by end 2007, is the Ministry of Education, Culture and Science. The ADB loan will come from its Asian Development Fund with a repayment period of 32 years, including a grace period of 8 years. Interest will be charged at 1 percent per annum during the grace period and 1.5 percent per annum thereafter.

From http://www.adb.org/ 08/08/2002

Seoul Plans Stem Cell Line Bank

SEOUL - The South Korean Ministry of Science and Technology has decided to set up a human embryonic stem cell line bank. The special bank will be established at the Medicine College of Seoul National University by next year and will receive the cell lines that are being held by relevant Korean institutes, the ministry said on Friday. The ministry is to inject 15 billion to 20 billion won (US$12.6 million to $16.8 million) into the project over the next 10 years for research. It plans to secure 30 human embryonic stem cell lines by next year. At present, four research teams at Maria Infertility Hospital Medical Institute, CHA Medical Center, Mizmedi Hospital and Seoul National University are reported to hold 20 stem cell lines. The latest version of the weekly journal Science Magazine said only four out of six human embryonic stem cell lines that South Korea has registered with the US National Institutes of Health (NIH) are useful in research. The results came from the US health agency's recent analysis on 78 stem cell lines from six nations registered with the NIH Human Embryonic Stem Cell Registry. Given the US science magazine's report, stem cell lines qualifying for study purposes among total cell lines held by Korean institutes are estimated to be much smaller than expected.

From http://www.atimes.com/ 08/17/2002

Gov't Mulls Reducing Public Holidays

The government is considering reducing the number of public holidays ahead of legislation for a five-day workweek system, the Ministry of Government Administration and Home Affairs (MOGAHA) said yesterday. The ministry is considering moving some public holidays like Arbor Day, which annually falls on April 5, to Saturdays to keep the number of holidays in line with the international average after the five-day workweek is implemented. The number of holidays in Korea would increase to 143-153 days a year when the system is put into effect, whereas the number of holidays in advanced countries averages 140 days a year, a ministry official said. "It is necessary to adjust the number of public holidays and reduce annual and monthly leave, as the number of holidays will increase by 52 days a year when the five-day workweek is adopted," a ministry official said. Holidays the ministry is considering moving to Saturdays are Arbor Day (April 5), Children's Day (May 5) and Memorial Day (June 6). The three holidays could be moved to the first Saturday of the month in which they fall. Officials said the government would first have to revise related laws that specify when each holiday falls. For example, it would have to amend the Child Welfare Act to switch Children's Day to Saturday. MOGAHA therefore plans to discuss changing the dates with the Agriculture and Forestry, Health and Welfare, and Patriots and Veterans Affairs ministries. Meanwhile, business organizations, including the Korea Chamber of Commerce and Industry, has been demanding that the government reduce public holidays or move them to Saturdays, saying the number of non-working days would surge with the adoption of the five-day workweek system.

From http://www.koreaherald.co.kr/ 08/23/2002


TOP°Ł

 

Indonesian Minister Prefers Constitution Amendment After 2004

JAKARTA (Xinhuanet) -- Following the tough debates on the amendment of the 1945 national constitution, Indonesian Minister of Defense Matori Abdul Djalil said here Wednesday that he preferred to delay the amendment process after 2004, as proposed by the Indonesian military (TNI).The minister said the delay would be good for maintaining peaceand the integrity of statehood since the present situation was notfavorable for such a critical work. The delay would also help prevent certain political groups fromimposing articles favoring their own desires, rather than the interests of the Indonesian people, Matori said. After the general election in 2004, "I hope most of the parliament members responsible for the amendment of the constitution will be free from the influence of their own groups,"he said. Separately, Indonesian President Megawati Soekarnoputri, who chairs the Indonesian Democratic Party of Struggle (PDI-P), calledon her party's members in the parliament to accomplish the amendment process and to avoid deadlock. Earlier Tuesday, the TNI and the police offered two alternatives, first to maintain the original form of the constitution and second, to accept the partially-altered constitution until the next 2004 general election. Some groups in the parliament have been struggling to amend theconstitution in the wake of the nationwide reform in 2000, on grounds that some of its contents no longer relevant with the current situation, gaining full support from People's ConsultativeAssembly Speaker Amien Rais. °°°°But on one occasion President Megawati said the preamble of theconstitution should remain unaltered.

From http://news.xinhuanet.com/ 07/31/2002


Indonesian House Speaker Mulls Forming Constitutional Commission

JAKARTA (Xinhuanet) -- Indonesian House Speaker Akbar Tandjung said here Thursday he will consider the Indonesian Military's (TNI) proposal to set up a special commission to carry out further amendment process of the 1945 state constitution. "I also agree with TNI's proposal to return to the original constitution if the session meets deadlock," Akbar said shortly after attending the opening ceremony of the People's Consultative Assembly's (MPR) annual session, pointing to the flagging public's confidence on the lawmakers who carry out the amendment process. "And if we delay constitutional amendment until after 2004, then let the next People's Consultative Assembly's (MPR) members do the job," he said. Indonesia will hold general elections in 2004 to elect parliament members. However, Akbar hoped that the parliament members could concludethe amendment during the ongoing MPR's annual session. Meanwhile, Indonesian Minister for Justice and Human Rights Yusril Ihza Mahendra said that if a special constitutional commission was to be established, it should become and independentbody with main task to provide recommendation for the parliament, not to make decisions. Another support for the special commission came from the Indonesian Police Chief, Da'i Bachtiar, who said since the commission consists of neutral people, the amendment process will not be distorted for the short-term interests of some groups. "If we rely on MPR members alone, it possibly brings more risks," he stressed. Although the commission has no right to make any decision, Bachtiar said that at least the members of the independent body could offer the best recommendation to the MPR, underlining some articles which are not relevant with the current situation need tobe changed.

From http://news.xinhuanet.com 08/01/2002

Indonesia's Foreign Policy Puts ASEAN in Top Priority

JAKARTA (Xinhuanet) -- Indonesian President Megawati Soekarnoputri affirmed Thursday that the Indonesian government will continue to consider the Association of Southeast Asian Nations (ASEAN) as its most important international partner in its foreign policy. "Given the importance of political and security stability in the region and the progress of geo-politics in Southeast Asia and nearby regions, I take ASEAN as the main priority of our foreign policy," she said while addressing the annual session of the People's Consultative Assembly (MPR). °°°°Megawati added that her first international trips during the beginning of her one-year administration have been made to all ASEAN member countries. She hoped that disputes between ASEAN members, including the Malaysia-Indonesia dispute on Sipadan and Ligitan islands, can be settled in a peaceful manner under ASEAN spirit. ASEAN consists of ten countries in Southeast Asia -- Indonesia, Malaysia, Brunei, Singapore, the Philippines, Thailand, Myanmar, Laos, Cambodia and Vietnam. It was established on Aug. 8, 1967 to forge regional cooperation, primarily on economy. Member countries of the association have agreed to implement the ASEAN Free Trade Area, effective from the beginning of 2002.

From http://news.xinhuanet.com/ 08/01/2002

Indonesia's Assembly Approves Direct Presidential Vote

Indonesia's top legislature has approved direct presidential elections, one of the biggest steps towards democracy in decades in the world's most populous Muslim country. The 700-member People's Consultative Assembly agreed to change the constitution late on Saturday. The direct presidential vote could come as early as 2004. Indonesia held its first, free general election in four decades in 1999, one year after Suharto was ousted from power after 32 years. Since then, the military lost a great deal of power in the Assembly, gradually shrinking from 100 seats to the current 38.

From http://dw-world.de/ 08/10/2002

Indonesia Makes Sweeping Changes to Constitution

JAKARTA, Indonesia - Indonesia's parliament on Sunday ended a two-week session after enacting sweeping constitutional changes to dilute the once-powerful military's political clout and give the president's office more muscle. But the world's most populous Muslim nation still faced an uphill task in deepening democracy. Some commentators warned that behind-the-scenes power remains with the generals and an entrenched political elite. "These changes are just cosmetic, and will not alter political life in any meaningful way," said Arbi Sanit, a prominent analyst and professor at the University of Indonesia. Lawmakers also rejected noisy calls for Islamic law to be introduced - bolstering Indonesia's role as a moderate Islamic bulwark against religious extremism targeted by the U.S.-backed war on terror. Although President Megawati Sukarnoputri has not commented on the reforms which could give her more political clout. On Saturday, the 700-member People's Consultative Assembly agreed to abolish by 2004 the 38 unelected seats reserved for the security forces. The seats were granted under the dictatorship of Gen. Suharto after he seized power from Megawati's father, Sukarno, in the 1960s. Suharto was ousted following pro-democracy protests in 1998. "The (military) is now out of practical politics," declared Amien Rais, the assembly's speaker who oversaw debate on the changes. Representatives of the military have themselves been anxious to withdraw from Parliament because their presence has been a lightning rod for domestic and foreign critics of the armed forces, which has long been accused of human rights abuses. Instead, senior generals are now likely to wield their power and influence mostly through private dialogues with Megawati, said Dede Oetomo, a professor at Airlangga University in Surabaya, Indonesia's second largest city. "It's probably easier to do it at the palace than at Parliament," he said. "There is no light yet for Indonesia at the end of the tunnel." Megawati needed the generals' support last year to oust her predecessor Abdurrahman Wahid, who had made enemies among the army brass by trying to assert civilian control over the military. Her administration has abandoned those reforms. The generals' political confidence has been further boosted by U.S. attempts to recruit Indonesia into its international anti-terrorism coalition. Washington wants to restore military-to-military ties and financial support severed after Indonesian troops laid waste to East Timor in 1999 and committed massive human rights violations when it voted to break free of Indonesian rule. Last week, Secretary of State Colin Powell visited Jakarta and announced a new $50 million program to assist Indonesia's security forces in the anti-terrorism struggle. The plan comes despite criticisms from Sen. Patrick Leahy, the Vermont Democrat who sponsored the law ending ties. Robert Gelbard, who served as U.S. ambassador here until last year, has also argued against new military links. Indria Samego, a political observer from Jakarta's Institute of Science, said the changes adopted Saturday, particularly direct presidential elections, were "an experiment" which could easily be undone. "We have to see how they are implemented," Samego said. Until now the assembly, not ordinary voters, have determined who is president. The nation's founding father, Sukarno, included that when he drew up the original constitution in 1945 and further strengthened the presidency in 1959. After toppling Sukarno in 1966 amid political turmoil, Suharto used the same constitutional provisions to cement his power. For 32 years, Suharto had a strangle hold over the assembly, which unquestionably and repeatedly re-elected him into the top job. (by Slobodan Lekic)

From http://www.nandotimes.com/ 08/11/2002

Jakarta Presses Reform

Despite Dithering by its highest officials, Indonesia may yet pull itself out of the morass if recent changes are allowed to continue their natural trajectories. We say this, of course, with caveats. Last Saturday, the People's Consultative Assembly, or MPR, declined the opportunity to tamper with the secular nature of Indonesia's domestic arrangement, and set an early sunset for the military's membership in the country's highest legislative body. It also approved the most significant change to Indonesia's system of politics in half a century--direct elections for the president and vice-president, beginning in 2004. To take the last first, what direct elections immediately means is that President Megawati Sukarnoputri and anyone who seeks to replace her must count on a different calculus at the next polls. Placing the choice for the president in the hands of ordinary folk may start the end of the patronage system that masquerades as representative politics in Indonesia. Just as significantly, it implies the demise of the patronizing belief that only the elite know what's best for Indonesians--such as when the MPR in 1999 picked Abdurrahman Wahid, whose party came in fourth in polls, over the leader of the winning party, Miss Megawati, to lead the country. Now, qualification and accountability will be the test on which success lies. Next, the MPR's decision to vote down the sharia proposal should be read along with developments in the secular legal system (see article on page 12). Last week, the government finally decided to suspend and investigate the three judges who declared bankrupt the local unit of the Canadian insurer Manulife. Indonesians' welfare rests on the impression foreign owners of capital have of their legal regime, so it is imperative this is perceived to be clean. If reform is diligently pursued, good will come of it. Significantly, it will also go far in addressing dissapointments with the courts that resulted in the call for sharia. By declining a radical alternative to the judicial arrangement, the MPR commits the secular establishment to get right reforms currently in their early stages. Indeed, if the sharia and election decisions are understood together, the message they send to senior politicians is that they must become more engaged with issues and results relevant to all Indonesians, rather than the sub-class of elite or influential. On to our reservations. As difficult as it was to amend the constitution, harder work lies ahead. The next task seems to us to be to draw up enabling regulations to set up new electoral safeguards. For if anyone thought corruption a serious problem before, opening up the country's highest offices to direct polling will introduce even more graft at the grassroots. Old habits die hard, and Jakarta has only two years to sort things out. Then, there is the military. Although the MPR abolishes the 38 seats the military now holds in the body by 2004, it doesn't guarantee the end of dwifungsi, the ideology under which the military plays a guardianship role over civilian politics. Remarks by senior officers last week hint that some still consider the armed forces a partner in government, rather than in service to civilians. A senior politician even defended the military's presence in the MPR, earlier saying he hoped it keeps its seats in the body until 2009. All would imply that it's too early to declare the military's involvement in politics over. In sum, though, there is no question that the news from Jakarta has been positive. Indonesia's leaders deserve praise for all they have done--something we don't get to say often. We'd only caution that these are early days, and Indonesia has more steps to take before its politics can be pronounced unquestionably fit and reformed. Still, it is moving in the right direction.

From http://www.feer.com/ 08/22/2002

Malaysia: New Unit to Handle Intellectual Property

KUALA LUMPUR: A new autonomous body to handle patenting, trademark and copyright matters in Intellectual Property development will be set up in January. Domestic Trade and Consumer Affairs Minister Tan Sri Muhyiddin Yassin said the move was the re- sult of the corporatisation of the ministry's Intellectual Property Division and with its scope extended to cover more research and development. "Many local companies still do not understand the importance of protecting their intellectual property (IP) and some are still ignorant on the term itself. "For example, the number of Malaysian companies involved in patent registration does not even come up to 200 compared with the 4,000 to 5,000 companies registered worldwide each year. "This low number reflects the lack of awareness on protecting a company's branding, trademark or design from being exploited by others," he said. The activities of the new body, to be called the Malaysian Intellectual Property Corporation, would involve companies that were into research and development, designing and product development, Muhyiddin told reporters after opening a forum entitled "Unlocking Your Company's Hidden 'Assets''' organised by Zaid Ibrahim and Co at the Sheraton Imperial Hotel yesterday. He said the corporatisation was vital to ensure that the statutory body would be efficient in carrying out its functions. "Like a private entity, the body will have a free hand to conduct its functions and this will also minimise red tape or bureaucratic procedures, which may slow down the patenting or registration processes for IPs," he added, saying grants would be given to help the body start up its task. Muhyiddin also said Malaysia's IP laws were on par with world standards, adding that the country was in the process of joi- ning a number of international treaties, including the much-awaited patent co-operation treaty. (by Susan Tam)

From http://thestar.com.my/ 08/13/2002

Objective to Be Self-Dependent

PETALING JAYA: The Government's policy on foreign worker applications is to help the labour-intensive manufacturing sector to gradually cut down its dependency on the foreigners and to continue being competitive in a high technology and knowledge-based economy. International Trade and Industry Ministry Parliamentary Secretary Datuk Fu Ah Kiow said the Government hoped all industries would understand this objective. "We hope they (businesses and industries) will take into consideration the Government's policy in their development plan to eventually cut down its dependency on foreign workers,'' he said.

From http://thestar.com.my/ 08/22/2002

Proposal for ISA Changes by Year End

KUALA LUMPUR: The Human Rights Commission of Malaysia (Suhakam) will submit its recommendations to the Government by year's end for the amendment of certain provisions of the Internal Security Act. Its chairman Tan Sri Abu Talib Othman said the commission's Law Reform Working Group was still reviewing several memorandums and complaints submitted by various parties on the use of ISA. However, he did not disclose the specific provisions that will be proposed for amendments. "The complaints are centred very much on the applications of the Act, whether there are abuses by the authorities is something which we have to look into,'' he said. To a question, Abu Talib said that the absence of any inquiry on the abuse of ISA by the authorities was never raised in the two hour meeting attended by Parti Keadilan Nasional president Datin Seri Dr Wan Azizah Wan Ismail, Parti Rakyat Malaysia president Dr Syed Husin Ali, PAS central working committee member Dr Hatta Ramli and family members of past and present detainees.

From http://thestar.com.my/ 08/24/2002

Malaysian Labor Laws Strain Regional Ties

JAKARTA, Indonesia (CNN) -- The lives of hundreds of thousands of Indonesia's villagers have been improved with money sent from relatives working in Malaysia. Malaysia's modern skyscrapers rose up on the labor of foreign workers, the majority of whom came from Indonesia. Both countries mutually benefited and it further sealed close relations -- until now. Following a slowdown in Malaysia's economy and two highly-publicized incidents of violence by Indonesian workers earlier this year, Malaysia introduced a new immigration law which came into effect on August 1. The law seeks harsher punishments -- caning, fines and imprisonment -- for migrants working illegally there. As a result, hundreds of thousands of illegal Indonesian workers started fleeing Malaysia earlier this month to avoid punishment. The government's handling of the issue drew criticism from many quarters. But in recent days, some of the harshest words have been slung at Malaysian Prime Minister Dr Mahathir Mohamad, straining ties further. Last week, Amien Rais, speaker of Indonesia's highest law-making body, the People's Consultative Assembly (MPR), warned Mahathir "he was playing with fire" by caning illegal Indonesian workers, calling the punishiment "inhumane and insulting." Rais' remarks drew a sharp rebuke from Malaysia's Foreign Minister Syed Hamid Albar. Malaysia recently called for its nationals to avoid traveling to Indonesia because of public anger over Kuala Lumpur's treatment of illegal workers. Warning"That warning is good. Let Malaysia be aware that for every action there is reaction," Rais said. These harsh words reveal another dimension -- one that goes beyond the plight of the poor Indonesian worker. A former official from the Indonesian Foreign Affairs Department told CNN the anti-Mahathir words had mostly come from public figures who are supporters of Malaysia's jailed former deputy prime minister Anwar Ibrahim. "People like Amien Rais and others, who had spoken against Dr Mahathir, if you look closely, have links to the Indonesian Association of Muslim Intellectuals (ICMI) which was once close to Anwar," said the former official. Rais was a member of ICMI. "The government itself has not really criticized Malaysia and human rights activists working to alleviate the sufferings of the returning migrants have not said that much either," the former official added. The ex-official also said the war of words was an attempt to create trouble for President Megawati as well as Dr Mahathir. Both Indonesian and Malaysian officials in Jakarta downplayed the diatribes, saying relations between the two countries were still good. "People are entitled to their views. That is a democratic system. All these recent incidents are just a distraction. The relationship between the two governments is good and there is very good cooperation to resolve the matter," Marty Natalegawa, Indonesian Foreign Affairs Department spokesman, told CNN. Spirit of friendshipMalaysian Ambassador to Jakarta, Rastam Mohd Isa, also dismissed suggestions that relations between the two countries were at a low point. "The relationship between the two governments are okay. This can be worked out in the spirit of friendship and cooperation," Rastam told CNN. Indonesians are not the only foreign workers in Malaysia but they are by far the largest -- there are currently 600,000 Indonesians working legally and another 480,000 illegally there, according to Natalegawa.. From March to July, more than 250,000 illegal workers have returned to Indonesia. The exodus also led to thousands of returning migrants to be stuck at squalid camps in Nunukan, East Kalimatan while awaiting transport back to their villages. Scores have died in those camps since the end of July.

From http://asia.cnn.com/ 08/27/2002

Philippines: DTI SEC Finalizing Jurisdiction Delineation

The Department of Trade and Industry and the Securities and Exchange Commission are finalizing a memorandum of agreement that would determine each agency's specific jurisdiction on cases involving the illegal pyramiding operations and other sales schemes mascarading as legitimate multi-level network marketing. Based on the draft MOA, an SEC referral and findings on a multi-level network marketing which may constitute pyramiding scheme shall be considered sufficient to initiate and investigation by the DTI. In the same vein, a DTI referral and findings on a multi-level network marketing which may be in violation of securities and investments regulations shall be considered sufficient to initiate an investigation by the SEC. The draft MOA further states that multi-level network marketing schemes that offer an ostensible product defined under RA 7394 or the Consumer Act of the Philippines falls within the jurisdication of the DTI. The government is calling for a re-bidding of the R250 milLion Electronic Procurement System (EPS) project after the first bidding held last month was declared a failure by the Inter-Agency Bids and Awards Committee (IABAC). The pre-eligibility conference for prospective proponents was held on August 5 with some 29 proponents attending. Submission of requirements for shortlisting purposes is due on August 15 and the evaluation of submissions to determine shortlisted proponents shall be held on August 15 to 28, 2002. Budget Secretary Emilia Boncodin said the government decided to declare the first round a failure after it was discovered that only one proponent qualified for the bidding duuring the evaluation for shortlisting purposes. A total of 17 companies responded to the government's invitation to apply for eligibility, shortlisting, and to bid. "When it was reported that only one prospective proponent could be qualified to submit a bid to the members of the Procurement Policy Board (PPB) and the NEDA Infrastructure Committee (Infracom) during a joint meeting unanimously agreed that this effectively removed any chance of competition and that the EPS project would have to be re-bid,'' said IABAC chairman Eduardo Opida. "Under this situation and given the fact that the approved budget for the project was previously published, there is nothing to stop a lone proponent from taking advantage of the announced budget by submitting the highest bid price possible,'' Opida added. Food and beverage firm RFM Corp. said yesterday its net income for the first half of the year came in at P6.115 billion, including an extraordinary gain of P6.55 billion. The company did not give comparative figures but it reported a net income of P248 million in the same period last year. In a disclosure to the stock exchange, the food firm said its net sales totalled P3.689 billion . It said it registered a gain of P6.55 billion from the sale of a discontinued business. The company sold its soft drink firm Cosmos Bottling Corp to food and beverage giant San Miguel Corp in a transaction finalized early this year.

From http://www.mb.com.ph/ 08/15/2002

DA Favors Agri-Agra Law Repeal

The Department of Agriculture (DA) is pressing for the removal of alternative compliance to the Agri-Agra Law or Presidential Decree 717 which has allowed banks to evade their obligation to allot a total 25 percent of their loanable fund to the agriculture and agrarian reform sectors.Under PD 717, all private banks including rural banks, government banks such as the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), should allocate 10 percent of their loanable fund to agrarian reform and 15 percent to agriculture. Jovita M. Corpuz, executive director of DA-attached Agricultural Credit Policy Council (ACPC), said during an orientation on the "Innovative Financing Schemes (IFS) in Iloilo City that a provision on "alternative compliance" to the law has caused banks to put their money on housing, educational institutions, hospitals, and other sectors than agriculture. This has deprived investments in the agriculture and agrarian reform sector for which the law has been originally created even investments in the rural sector have been coupled with tremendous multiplier effect on the economy. "There were three bills filed amending PD 717, and these are now being consolidated into one," she said. Amendments to the bill focused on removing provision for alternative compliance and on a mandate to compel banks to allocate one-tenth of the 10 percent loanable fund to purchase Quedan bonds for guarantee. Quedan bonds are investment instruments offered by the Quedan and Rural Credit Guarantee Corp. (QRCGC) which extends loans to small farmers. Guarantees are particularly allocated for agrarian reform lands that are offered as collateral in order to make the land titles more attractive to banks as negotiable instruments. Corpuz said that banks have particularly failed to put more investment in the 10 percent agrarian reform, although these banks have been substantially complying with the 15 percent for agriculture. Some banks have in fact exceeded the 25 percent quota even as they have made alternative investments in housing or other sectors while omitting their obligations to land reform. "The agrarian component of the quota, however, is precisely what caters to small farmers. Agrarian reform beneficiaries are made up mainly of small farmers," said House Bill 104 filed by Rep. August Syjuco. Another amendment to the law involves the treatment of the 25 percent quota as applicable to all beneficiary agrarian, agriculture and fisheries lending sectors rather than indicating 10 percent for land reform and 15 percent for agriculture which enables "flexibility" on the fund use and incentives to banks which can lend based on a project's viability." (by Melody M. Aguiba)

From http://www.mb.com.ph/ 08/17/2002

Thailand: WHO Backing for Health Care Policy

The World Health Organisation yesterday threw support behind the government's universal health coverage policy, saying Thailand has the capacity to achieve the goal. The United Nations health agency became the second world organisation, after the International Labour Organisation (ILO), to have shown support for the 30-baht health care scheme. Guy Carrin, the WHO's senior health economist, said the middle-income Thailand had the capacity to succeed. ``Actually, Thailand has already achieved quite a lot, with the existence of social security scheme, the civil service's insurance scheme, and even health cards for the poor,'' he said. ``The knowledge is already here for Thailand to move towards universal coverage. ''The WHO official made the point on the eve of a seminar on universal health care to be held today. The forum, jointly organised by WHO and ILO, will be for the first time a gathering of national and international experts to discuss the scheme. Mr Carrin showed support for the government's possible move for administrative merger of the National Health Insurance Fund, Social Security Fund, and the Civil Service Medical Benefits, under the National Health Insurance Bill. There could be different health care schemes working for universal coverage, he said, but they should have certain connections under one umbrella. ``The advantage of funds grouping was that it will allow fund holders to discuss future policy, future benefit packages, or even see how the richest fund can contribute in a small way to the low-income's fund,'' he said. But pooling funds should be done step-by-step because the system has just begun, Mr Carrin cautioned. He also praised the use of the capitation system to implement the 30-baht health care scheme as a ``wise decision'' by the government. The system, he said, had certain advantages to give more power to hospitals to decide on their own management. However, it also opened doors to budget mismanagement, and a monitoring mechanism by fund holders and complaint mechanism for patients to check on cost-effectiveness and quality of the services were needed. The capitation amount should be adjustable due to the needs in each area, he added. ``Universal coverage is a matter of balancing, to balance medical benefits and to balance the pros and cons of capitation,'' he said. Mr Carrin suggested communications between all stake-holders be taken into account from the beginning. He also urged the government to consider hiring self-employed people to make some contributions to enhance equity in the system.(by Anjira Assavanonda)

From http://scoop.bangkokpost.co.th/ 08/01/2002

Developing Nations Watch Thailand's Bold Healthcare Plan

Bangkok, Thailand -As Bangkok takes steps toward universal coverage, critics warn of debt and low standards. As a vote-grabbing election pledge, it had a familiar ring: affordable health- care for all. And what worked for former President Bill Clinton in 1992 also proved a winner last year for Thaksin Shinawatra, Thailand's telecom tycoon-turned-populist politician. For Thai voters fed up with rising healthcare costs, the promise that any hospital visit - including surgery - would cost only 30 baht (75 cents) hit the spot. Prime Minister Thaksin has kept his word, launching an ambitious plan to provide subsidized care and medicine to millions of underinsured Thais. His National Health Insurance Bill is expected to clear parliament shortly. Meanwhile, authorities have already issued 45 million saffron-colored cards that entitle the holder to a 30-baht treatment by a local healthcare provider. While this puts him ahead of Mr. Clinton, whose healthcare bill never cleared the Senate, Mr. Thaksin has yet to convince everyone that his plan is working, or that it will outlast its architect. Doctors warn of falling standards and cash shortfalls in state hospitals. Economists predict that Thaksin will need to raise taxes to pay for his generosity, and say that this and other pledges are forcing Thailand into debt. At stake is more than just Thaksin's chance of reelection. Thailand's bold experiment with universal health coverage, an expensive privilege enjoyed by a minority of countries, could prove a model for other developing nations, who are watching closely. Should Thailand succeed in introducing comprehensive healthcare without breaking the bank, other nations may follow, rather than accept the US model of private insurance. "Thailand is moving towards universal coverage much quicker than other similar countries in the region," says Bjorn Melgaard, country representative for the World Health Organization (WHO).( By Simon Montlake)

From http://www.csmonitor.com/ 08/14/2002

Viet Nam: Updated Trade Law Proposed

(SGT)- Vietnam's Trade Law should be updated so that it could govern more relevant areas and be more effective, a conference in HCMC was told yesterday. The Trade Ministry organized the meeting to collect suggestions on revising and revamping the law, which was issued in 1997 and governs organizational and individual traders operating in Vietnam. Lawyer Truong Trong Nghia, deputy head of the HCMC Investment and Trade Promotion Center, said no laws would be applied in dealing with illegal trading by street vendors and small shop owners as the people were not within the scope of the law nor were farm owners. Nguyen Minh Chi, head of the ministry's Legislative Bureau, said disputes relating to construction companies supplying building materials were beyond the law, which does not treat the companies in question as traders. Nghia said the laws definitions of trader and trading activity were limited. The law considers only buying and selling as trading; but ignores other trading activities and service supplies, he said. Deputy Trade Minister Mai Van Dau said he agreed with the idea, giving more activities not viewed so like bidding, auctioning, stock and intellectual property deals. Most participants said the concept of trade should be expanded so that an updated law could cover more areas. Dau told the meeting that foreign-invested enterprises would likely be permitted to make suggestions for the revamped law, saying this was a proper way to promote Vietnam's economy. Dau said there were two options for updating the law. Some articles would be likely revised to go before the National assembly early next year. The alternative is to rewrite the entire law, a very time consuming process. Participants also suggested revamping the rules on advertising, sales promotions, business contracts, bade inspections and other areas.

From http://www.vneconomy.com.vn/ 08/05/2002


 

Bangladesh: Judicial Service Commission Rules Okayed

The Cabinet Committee on separation of judiciary from the executive at a meeting yesterday approved the Judicial Service Commission Rules 2002 and the Judicial Service (Pay Commission) Rules 2002. The committee, formed to implement the High Court verdict on separation of judiciary, also discussed the draft of the Judicial Service (Formation, Appointment, Suspension and Expulsion) Rules. Chaired by committee Chairman Industries Minister M K Anwar, the meeting was attended, among others, by Law, Justice and Parliamentary Affairs Minister Barrister Moudud Ahmed, Land Minister M Shamsul Islam and Science and Information and Communications Technology Minister Dr Abdul Moyeen Khan. Secretaries concerned and officials were present, according to a PID handout.

From http://www.dailystarnews.com/ 08/02/2002


India: Govt Aims at Developing Goa: CM

PANAJI: Goa Chief Minister Manohar Parrikar on Thursday said the progress and development of the state were the goals of his government and sought the cooperation of all Goans towards that end. Addressing a gathering after unfurling the national flag and inspecting a guard of honour at the 56th Independence Day function Parrikar reiterated the government's commitment to transform Goa into a welfare state. Paying homage to the freedom fighters, he reminded the people about the sacrifices made by them for the independence of the country and said the nation was "indebted" to them. Parrikar, however, cautioned people against the "forces of destabilisation which were trying to divide the people on religious lines to disturb communal harmony and peace in the country". The recently implemented Dayanand Social Security Scheme, envisaging payment of pension of Rs 500 per month to the poor, destitute and disabled included the various steps taken by his government to provide a dignified living to the people and promote development of Goa, he said.

From http://timesofindia.indiatimes.com/ 08/15/2002

CBI Gets Four New Joint Directors

NEW DELHI: After some delay, the CBI has finally managed to get four new joint director-level officers to head crucial units in the investigating agency. The CBI is also likely to get a 1968-batch Orissa cadre IPS officer, U S Mishra, as special director soon. The four new appointees are: Paramvir Singh (1974, Tamil Nadu cadre), S C Sinha (1975, Haryana cadre), U S Dutta (1976, Bihar cadre) and S P Srivastava (1976, Uttar Pradesh cadre). These IPS officers will fill in the vacancies caused by the ``repatriation'' of some ``high-profile'' JDs ^ Neeraj Kumar, M S Balli, J K Dutt and S K Upadhayaya ^ to their parent cadres some months ago. Three of them had unusually long tenures in the CBI and the Prime Minister's Office had finally stepped in to deny them further extensions.

From http://timesofindia.indiatimes.com/ 08/20/2002

Reference to SC A Rare Decision

NEW DELHI: Reconciled to a delayed poll in Gujarat, the government, through a Presidential reference, approached the Supreme Court to clarify the scope and ambit of the Election Commission's powers in deciding the timing of holding an election. The government would also like the apex court to determine whether it is permissible for the Election Commission to decide or recommend what it should do if the polls are delayed. For instance, whether the state government concerned should be removed and Governor's Rule imposed. The SC' advisory opinion is a rarity in itself. While the Indian apex court has responded nine times in the past, the American Supreme Court had declined to give an advisory opinion on a Presidential reference . According to legal luminary Durga Das Basu's treatise, the Supreme Court is under no obligation to answer a Presidential reference. In January 1993, an ''answer'' was sought from the SC on whether a temple had existed in Ayodhya where the Babri Masjid stood before being demolished in December 1992.Constitutional expert and Congress leader Devendra Nath Dwivedi, who was closely associated with the move, recalls that the government could not satisfy the apex court because of ''a communication gap'' with then Prime Minister Narasimha Rao being away in the US. The apex court had asked the government whether it would abide by the ''answer''. Finally, the Bench ruled that the question sought was purely a political one, which had no relation with any of the Constitutional provisions. Among the past Presidential references is one on Kerala Education Bill, 1958, passed by the the first Communist-led government of E M S Namboodiripad. The Union government had then questioned a state's power to legislate. The procedure to appoint judges of the Supreme Court and high courts became the subject of another Presidential reference. Now that the Gujarat reference made by President APJ Abdul Kalam has been received by the SC, ''any uninformed public discourse must cease,'' says Dwivedi.

From http://timesofindia.indiatimes.com/ 08/21/2002

Ordinances Set to Give Centre a Headache

NEW DELHI: The government's controversial ordinance on electoral reforms might face rough weather as President A P J Abdul Kalam is believed to have raised certain queries about it. "The ordinance also came up for discussion when Prime Minister A B Vajpayee met Kalam early this week," a senior official told TNN. According to him, the issue will be taken up by the Cabinet on Saturday. Minister of state for law Ravi Shankar Prasad denied any knowledge of the queries from Rashtrapati Bhavan, but reiterated the government's resolve to promulgate the ordinance. The ordinance was drafted by the law ministry in order to replace an Election Commission order making it mandatory for candidates to disclose their criminal record, if any, as well as their assets and liabilities on their nomination forms. However, as it stands, the ordinance will provide voters with much less information about their candidates than the Supreme Court had demanded in its directive to the EC on May 2. Sources point out that one reason behind Kalam's apparent reticence in promulgating the ordinance emanates from the representations that he has received on electoral reforms from different civil society groups. Last Friday, a 24-member delegation of the National Campaign for Electoral Reforms (NCER) met Kalam and stressed that the proposed amendments to the Representation of the People Act, 1951, went against the letter and spirit of the SC order as well as the Constitution. The NCER, in fact, had urged the President to take the unusual - and dramatic - step of referring the ordinance to the Supreme Court since the SC had begun the entire process of poll reforms through its May 2 order. The NCER representation had specifically objected to the insertion of a new section, 33A, in the draft Bill. The section says that notwithstanding any judgements, decree or order of any court or the EC, no candidate shall be liable to disclose or furnish any further information in respect of his election. Despite the government's claim of unanimity, the Congress has raised objections to the amendment. The oil ministry is set to present to the Cabinet for approval on Saturday a draft of an ordinance cancelling 3,565 petrogoods retailing dealerships appointed since January 2000. The ordinance follows instructions from the Prime Minister's Office and advice by solicitor-general Harish P Salve to accord statutory sanction to the executive order cancelling the dealerships. Prime Minister A B Vajpayee had ordered cancellation of these dealerships following media reports of favouritism. Subsequently, the oil companies issued termination notices to the marked dealers citing "government orders". The move saw a rash of suits throughout the country, with the affected dealers rushing to court; and in several cases, obtaining a stay. The oil companies also filed caveats in many courts. This prompted an apprehension that the whole issue may get stuck in long-drawn legal tangle, with the government unable to defend its decision. A dealership is a legal contract between two business entities and could not be terminated unilaterally on the basis of an order from the government, which is not a party to the tie-up. The ordinance would give the cancellation statutory sanction and take it out of the courts' purview. Another court order also added to the government's headache. While hearing an aggrieved dealer's petition, the Allahabad high court on Tuesday had observed that the government could not cancel the dealerships merely on suspicion of favouritism without conducting an impartial probe. The ordinance would also take care of this by precluding the need for any probe.

From http://timesofindia.indiatimes.com/ 08/23/2002

Govt To Take Fresh Look at Anti-Quackery Ordinance

BANGALORE: The issue of the proposed anti-quackery ordinance is likely to be delayed with the state government deciding to have a relook following reservations expressed by Karnataka High Court former Chief Justice D.M. Chandrasekhar about it. On August 17, Health and Family Welfare Minister Kagodu Thimmappa announced an ordinance would be promulgated to check the menace of quacks. The ordinance is ready, but the government will have it vetted again. Chandrasekhar told this reporter that he has written to Thimmappa to keep the ordinance in abeyance as it requires in-depth study. ``Allopathy doctors are not prepared to work in rural areas, the poor are harassed in government hospitals. Such people depend on native practitioners,'' he said. Chandrasekhar said he also broached the issue with Medical Education Minister A.B. Maalaka Raddy, who reportedly endorses his views. ``Just because native medicine practitioners don't have academic qualifications, they cannot be dismissed as fake,'' he added. Sources said the government will have a relook at the ordinance now. Registration of doctors of all systems of medicine is mandatory with their respective statutory bodies such as Medical Council of India for those practising Allopathy. ``With whom will a native medicine practitioner register? The ordinance might inadvertently impinge on the practising rights of genuine persons,'' they stated. However, Indian Medical Association (Karnataka branch) anti-quackery cell chairman P. Janardhan Rao debunked the government's explanation. ``If the government wants to protect the native medicine practitioners, let it bring a legislation. Presently, no other system except allopathy, Ayurveda, homoeopathy, Siddha, Unani, naturopathy and yoga is legal,'' he maintained. Rao said the government would not have thought about the ordinance, if there had been no controversy over psychic healer Alex L. Orbito's two-day camp in Bangalore recently. According to him, the government was yet to implement two orders of the Karnataka High Court on taking action against fake practitioners, while an anti-quackery cell set up in 1983 by the health and family welfare department is defunct. IMA's former Chairman V.V. Rajagopal, who was member of the government cell, said two meetings were held by then health and family welfare secretary. ``I spoke about the quackery and probable solutions. Nothing happened,'' he maintained. IMA anti-quackery cell former president H.P. Rajkumar stated K.R. Nagar and Honnali were the only taluks in Karnataka where quacks have been kept under check. The first conviction of a quack was in Honnali. Maharashtra has enacted a legislation to check quacks, while the Delhi government constituted a cell. Action not taken Karnataka government's anti-quackery cell, started in 1983, is defunct. Government circular dated November 28, 2001 to the district administration to take action against doctors practising any recognised system of medicine other than the one in which they are registered, is not being implemented. HC order on March 1, 2002 that on any complaint filed against unqualified or fake practitioners, the government is competent to take action. ``It is hoped the government will take action in the letter and spirit of law,'' the court said to a PIL. HC order on March 7, 2001 directing the DGP to take action against unregistered medical practitioners. It rejected a petition of those practising electro-homoeopathy who had been dubbed by the IMA as fake.

From http://timesofindia.indiatimes.com/ 08/25/2002

Kalam Signs Controversial Poll Reforms Bill

NEW DELHI: President A P J Abdul Kalam has signed the electoral reforms ordinance after the Union Cabinet on Saturday refused to make any change and sent it back to him for his assent. According to official sources, Kalam put his signature after a meeting with Attorney-General Soli J Sorabjee on Saturday night. It is believed that Sorabjee argued on two lines: One, the Bill was formalised after evolving a political consensus and two, the government has no desire for a confrontation with the President. The Attorney-General also told the President that the government would consider his suggestions at the time of its legislation in Parliament. Kalam had returned the ordinance last week on the ground that it is not in tune with the Supreme Court's May 2 order and also infringes upon the citizen's fundamental right to know the antecedents of a candidate seeking election. Meanwhile, the National Campaign for Electoral Reforms (NCER), a group of NGOs, on Sunday reiterated that it would petition the Supreme Court to strike down the ordinance. Shocked at the manner in which the Union Cabinet returned the ordinance to the President for his assent, Jayaprakash Narayan of NCER told Times News Network from Hyderabad that it would specifically argue against the insertion of Section 33A in the Representation of the People Act, 1954. The new section proposes that notwithstanding any order, judgment or decree by any court or the Election Commission, no candidate shall be liable to disclose any information in respect of his election. ''This is blatant and unconstitutional,'' Narayan said. The crude response by the political class shows how it is against any idea to reform, he said. ''But our intention is to improve the level of politics, not malign it, and we will continue to do so.'' Lawyer Sanjay Parikh, who argued PUCL's earlier petition on electoral reforms in the Supreme Court, also confirmed that a petition would be moved very soon.

From http://timesofindia.indiatimes.com/ 08/25/2002

Govt Not to Pressure Constitutional Agencies Including CBI: PM

Prime Minister Atal Bihari Vajpayee on Monday said the Government will not bring any pressure in the working of CBI or any other constitutional agency, but asked the premier investigating body to evolve a system that can catch "the big and the small fish" by reforming the criminal justice system. "We shall not tolerate corruption, howsoever highly placed the offender may be. The Government shall not bring any kind of pressure in the working of the CBI or any other constitutional agency," Vajpayee said while inaugurating a two-day conference of CBI and state anti-corruption bureau. "This is not an assurance. It is a fact. It is our track record," the Prime Minister asserted. Stating that Government was committed to grant "greatest autonomy" to investigating agencies including CBI, he asked the state governments also to provide similar autonomy to their anti-corruption agencies. Asserting that autonomy entailed greater responsibility and higher accountability, he said "this leaves no scope for passing the buck or for putting the blame on others". The Prime Minister, who gave away President's Police medals to five CBI officers, pointed out that while CBI's conviction rate was 70 per cent, the rate for conviction in non-CBI cases "does not go beyond five to six per cent". Stating that while shoddy investigation leading to acquittal was "part of the answer", he said the major part of the blame lies on the criminal justice system. "Its long delays and arcane procedures inspire little confidence either among the people or even among investigating agencies. This calls for serious soul-searching and urgent self-corrective action by the judiciary," Vajpayee said. He pointed out that after liberalisation of the economy there had been a "spurt in financial frauds, bank and stock market scams, money-laundering and cyber crimes running into hundreds and thousands of crores of rupees. Some of these channels are also used to finance anti-national and terrorist organisations." He asked the anti-corruption agencies like CBI to continuously hone their skills to catch criminals indulging in large scale financial frauds. Vajpayee also asked the state-level agencies to improve their performance because they deal with cases of corruption "that directly affect the common man. In short, what we need is a system that can catch the big fish as well as the small fish". While, it was not expected that every irregularity could be uncovered, "you can certainly create... A deterrent impression that irregularities will indeed be uncovered - that no fish, big or small, can escape your net".

From http://www.hindustantimes.com/ 08/26/2002

SC Issues Notices to EC, State Govts

NEW DELHI: Hearing the Presidential reference on the controversial order of the Election Commission on Gujarat assembly poll, the Supreme Court on Monday issued notices to the Commission, all the state governments and the six recognised political parties.A five-judge constitution bench comprising Chief Justice B N Kirpal, Justice V N Khare, Justice K G Balakrishnan, Justice Ashok Bhan and Justice Arijit Basayat fixed on Thursday for working out a time-table for hearing of the reference. When Solicitor General Harish Salve, appearing for the Union government, said under Article 174 of the Constitution, the Gujarat Assembly has to be reconstituted by October two deadline, the bench said "you don't worry about that for the time being. We will work out a time schedule for hearing of the reference on Thursday."When certain regional political parties pleaded that they should also be given an opportunity to address the Court on the reference, the bench refused saying "then it will be difficult to control the proceedings."The six national political parties to whom notices were issued on Monday were Congress, BJP, CPI(M), CPI, Nationalist Congress Party and BSP. Except BSP, all other parties accepted the notices inside the court.The Supreme Court Registry has already issued notices to the Attorney General Soli J Sorabjee and Solicitor General Harish Salve. The law ministry had specifically mentioned to the Registrar General that Salve would represent the Union Government in the reference matter. The three questions on which President A P J Abdul Kalam sought the opinion of the Supreme Court were:o Is Article 174 subject to the decision of the Election Commission of India under Article 324 as to the schedule of elections of the Assembly?o Can the Election Commission of India frame a schedule for the elections to an Assembly on the premise that any infraction of the mandate of Article 174 would be remedied by a resort to Article 356 by the President?o Is the Election Commission of India under a duty to carry out the mandate of Article 174 of the Constitution, by drawing upon all the requisite resources of the Union and the State to ensure free and fair election?

From http://timesofindia.indiatimes.com/ 08/26/2002

Sri Lanka: Govt to Bring 36 New Laws to Accelerate Development

The Government will introduce 36 pieces of new legislation aimed at fortifying the economy to accelerate development through the empowerment of the financial sector, Finance Minister K.N. Choksy told the Daily News yesterday. There are similar measures made in other developing countries in the region which have activated financial markets in those countries but the Government has framed the laws to suit the conditions suitable for Sri Lanka, the Minister said. This new law will impose fiscal management on the state sector that handles public revenue and will be binding on all Governments. The proposed piece of legislation, when implemented will ensure that the budget deficit is brought below 5 percent by 2006 and limit the Government borrowings from the Central Bank to less than 10 percent of the national revenue. The new law mandates the Finance Minister to present to Parliament a Financial Position Report annually which will set out the estimates of the Gross Domestic Product (GDP), prices of consumer goods, unemployment figures and the economic priorities of the current year. Thereafter the Minister will be required to place before Parliament a Mid Year Fiscal Position Report so that the Government's fiscal and economic progress could be reviewed. Thereafter, a Final Budget Outcome Report will be presented so that the Government's success or failure in the financial/ economic fields would become known. Minister Choksy explained that the requirement for the new law has been mandatory following gross financial indiscipline in the state sector for the past seven years which was attributable for the negative economic growth for the first time in independent Sri Lanka last year and that the budget deficit has risen to over 10 percent of GDP due to the absence of financial discipline. He said that the decline in the state revenue has to be arrested and that unlawful public expenditure should be curbed at all levels. The lack of financial management and adherence has been to prudent budgetary principles have also resulted in the lack of investor confidence locally and internationally. The Minister also said that the financial allocations to all state departments would be based entirely on their financial and operational performance of the previous year's exception in instances of welfare items of expenditure such as health and education. The amendments to the Monetary Act is geared for the expansion of the number of members of the Monetary Board from the current four to six. The Monetary Board comprises the Treasury Secretary, Governor of the Central Bank and a nominee of the Finance Minister. The amendment will ensure the inclusion of two private sector nominees as it is believed that there should be a private sector inputs in the determination of interest rates, value of currency and the exchange rates etc. This law has been brought for the amalgamation of the Department of Inland Revenue and the Customs and Excise Departments. The idea is to bring all departments under one umbrella in order to avoid duplication of operations and also reduce expenditure. It is also expected to ease the operations of import exports This law which revolves round the Value Added Tax has been approved in Parliament. This law will provide the legal framework to have transparency in the selection process for the recipients of the state sector aid such as Samurdhi and the proposed national Youth Corps which is expected to be set up soon. There will be a Central Board which will manage the Samurdhi and other welfare schemes which will be granted for the training of educated youth and will be geared to suit rural conditions. They will also be trained to be employed in technical agriculture. The eligibility criteria for these schemes and the point at which the candidates should depart from the schemes will be determined by the Central Board. This is a modern concept which will safeguard the financial institutions which service the private sector such as banks finance companies and which have anticipate financial problems.The assistance will not be in the form of subsidies but other schemes of assistance in the manner in which they operate in developing countries This piece of law has been for the benefit of allottees of state lands where they could use the lands to procure loans, keeping the title deeds as security. This is subject to their limitations in the fragmentation of the lands or to their disposal. This has been framed where labour disputes and arbitration will be settled on a 3:2:1 formula. There are 28 other laws which also have been aimed at economic development but the details and the modalities have not been finalised yet. They are: Public Utilities Commission Law, Economic Management Law, BOI Law, Tourism Law, Human Settlement Planning Law, Rain Forest Law, Exploration of Oil and Natural Gas Law, Gramodaya Mandalaya Law, National Sports Authority Law, Cinema Exhibition Law, Development Projects, Land Acquisition Law, Electricity Law, Financial Sector Revamping Laws (Banking Act, Finance Companies Act, Leasing Act, Insurance Act, Securities and Exchange Commission Act) School Board Law, Water Supply and Distribution Law, Parliamentary Scholarship Board Law, Petroleum Products Law, Repeal of Press Council Law, Repeal of Special Presidential Commission Law, Freedom of Information Law, Local Authorities Election Candidates (Special Provisions) Law, The prevention of Dengue Law and the New Monetary Law (which includes Exchange Management). (by Ravi Ladduwahetty)

From http://www.dailynews.lk/ 08/21/2002

Laws Being Amended to Curb Terrorism

A multi-pronged trans-national anti-terrorism strategy consisting of legal measures, army monitoring of investigation and prosecution of terrorists, and tracking of aliens is being worked out to counter this emerging threat, sources told PNS. The sources said amendments to the Anti-Terrorism Act were on the anvil for making it an effective piece of legislation to curb terrorism by keeping track of finances of the activists of various militant and extremist parties. The existing laws have been found wanting in many respects due to which illegal transactions of money continue to flow unchecked. That money was being used to carry out terrorist activities in Pakistan, they added. Another amendment over which the Ministry of Law is burning the midnight oil comprises measures to control the movement of militants who participated in Kashmir and Afghanistan jehad, members of various local sectarian parties who are no more active as well as those who are active and suspected of carrying out terrorism. Under the proposed law, it would become mandatory for the suspected terrorists to report to the police stations periodically besides filing bonds and sureties of good behaviour. To achieve this end, a list of 'A' category terrorists has been compiled. It includes those activists of the proscribed parties who are the motivating forces at the district level. It also includes those who fund such parties or groups besides those who physically carry out terrorism. A profile of each 'A' category activist is being compiled which would list his history of activities, record of arrests, previous convictions, besides a picture or sketch. The profile would also contain reasons for including the activist in category 'A'. The consensus list of 'A' category activists has been finalised in consultation with the home departments, police, Inter-Services Intelligence, Intelligence Bureau and Special Branch, and activists are being picked up. In order to ensure that the police and other law-enforcement agencies carry out the investigation of terrorists without fear or favour, army officers of lieutenant colonel rank have been attached with each anti-terrorism court in the Punjab and Sindh to supervise investigations and monitor prosecution. In this regard, out of 89 terrorism cases notified for priority hearing, 51 have been disposed of since monitoring started on March 24. Another important facet of the new strategy is monitoring of the movement of aliens, particularly those of Arab and African origin. As many aliens of these nationalities are involved in conducting, sponsoring and organising extremist and terrorist actions, a procedure has been devised under which relevant legal recourse to deport or prosecute is initiated the moment an alien is identified. Under the policy guidelines, a range DPO (DIG) would be responsible for ensuring and certifying that no illegal Arabs or Africans are residing in his area of jurisdiction. The government of Sindh has been particularly asked to assist National Alien Registration Authority in this connection. All the aforementioned goals could only be achieved if the provincial CIDs or anti-terrorism units are modernised, strengthened and trained to meet the challenges of the changing environment. The federal government has directed the provinces to give priority to these units in terms of finance and manpower. Regarding the federal government funds, which require concurrence of the provincial government, the provinces have asked that these be approved as soon as possible to avoid lapse.

From http://www.paknews.com/ 08/12/2002

Joint Economic Council Formed

The Federation of Nepalese Chambers of Commerce( FNCCI) and Industry and the Confederation of Indian Industry (CII) have formed a joint economic council, an announcement said. FNCCI president Rabi Bhakta Shrestha is chairman. The council is meeting in New Delhi on August 14 to recommend joint suggestions to the governments of India and Nepal at an inter-governmental meeting. The meeting will discuss export and investment prospects in Indian states, special Nepal session at the World Economic Forum, CII partnership summit in India, holding joint trade fairs and exhibitions in both countries, child labour in Nepal and corporate governance.

From http://www.nepalnews.com/ 08/10/2002

Nepal: Girija Congress Calls For Constitution Amendment

After an emergency four day meet of Nepali Congress (Koirala), the party central committee Saturday called for economic, social and political reforms by an amendment in the constitution, party insiders said. A party document prepared by central committee member Mahanta Thakur 10 months ago will be the framework of the amendment proposal as the party prepares to fight snap polls on November 13, party sources said. The Girija Congress will now make an amendment to the constitution an election issue. The meeting said this week's unanimous Supreme Court verdict to endorse Prime Minister Sher Bahadur Deuba's decision to dissolve parliament and order snap polls on November 13 was "acceptable though inexplicable," an announcement said. The central committee took exception to a Court ruling that national elections can be held during an emergency. The Girija Congress charged the government for violating the election code of conduct through misuse of official media and asked the Election Commission to enforce the code effectively. The central committee meeting also pushed for earliest local elections; government has proposed April 4 ,2003 as a possible date to the Election Commission after dissolving all local bodies from the village to districts in mid July after the expiry of their elected five-year term. The party also asked Maoists to eschew violence and join the political mainstream. The central committee of the RPP, the third largest party in the dissolved parliament, also pushed for early local elections at the end of its meeting that Saturday, a party announcement said.

From http://www.nepalnews.com/ 08/10/2002

Pakistan: Govt Revises Proposed Constitutional Amendments

The government has revised the proposed constitutional amendments in the light of the public debate by dropping some proposals but retaining fundamental discretionary powers to be vested in the president. There is no question of scrapping the planned presidential discretionary power to dismiss the national assembly and prime minister or both, an official, privy to the revised draft of the proposed amendments, told PNS. Similarly, the president's power to appoint services' chiefs, chairman joint chiefs of staff committee, and constitutional office-holders, proposed in the package, will also stay, he said. However, the proposed power of the president to relieve the prime minister, who has advised dissolution of the national assembly, may be dropped in the face of large-scale political opposition to it. The president's proposed authority to nominate someone as prime minister was being dispensed with, the official said. Instead, the majority parliamentary party would have that right to exercise, he added. The official said that the proposal relating to establishment of National Security Council would remain unchanged. "Not only the 58(2)(b) will be certainly revived but it will also be strengthened to serve as a major check on the prime minister," he said. Some "innocuous" proposals like the change in the mode of election to the senate and the tenures of the national assembly and upper house, were being dropped, the official said. As a consequence, the senators would be indirectly elected like before on the basis of proportional representation system from the votes of the provincial assemblies and not through direct elections. Political parties' open lists system containing the names of their candidates would not be adopted. Similarly, the term of the national assembly will be retained as five years and not four years as proposed in the package and the tenure of the senators would be six years and not four years as suggested. As before, the senate will be made non-dissolvable. This change will have no impact on the increased number of senate seats, 100. The National Reconstruction Bureau (NRB) will brief President General Pervez Musharraf on the revised constitutional package next week. Simultaneously, all the constitutional amendments would be finalised for promulgation through a Provisional Constitutional Order on August 14 by the president. The government fully knows about the public opinion on the proposed amendments. Leaders of a number of political parties have personally aired their views to the president during their meetings with him during his consultative process. Representatives of the main multi-party opposition grouping, Alliance for the Restoration of Democracy, and its major component parties, Pakistan Muslim League-Nawaz and Pakistan People's Party, so far have not met the president to speak to him directly on the constitutional package. However, their anti-amendments views are well known. The NRB will also brief the president on the mode of election of women and technocrats to central parliament and provincial assemblies. The definition of the term 'technocrat' will be firmed up. Senior presidential adviser and constitutional expert, Syed Sharifuddin Pirzada, is expected to be entrusted the task of finalising the proposed amendments because "he is the one who is going to defend them in superior courts when these will be challenged", another official told PNS. The NRB has a strongly anathema to Pirzada's involvement, but senior presidential aides want the constitutional guru to take care of the final product. "Only Pirzada has deep knowledge of all the Supreme Court judgments on the constitutional amendments as well as the October 12, 1999 military take-over, therefore, he is in a much better position than anybody else to do this job," the official said.

From http://www.paknews.com/ 08/02/2002

New Ordinance Separates Prosecution, Investigation

The provincial governments are likely to soon promulgate the prosecution service ordinance separating the prosecution function from investigation. Under the draft ordinance, the prosecutor could withhold prosecution in compoundable cases, seek discharge of cases instituted on mala fide intent and progress reports in probes for submission to courts. Under the prevailing system, police officers (legal inspectors) prosecute offences being tried before the magisterial courts and the district attorneys prosecute them before the sessions courts. The legal inspectors are direct subordinates of district superintendents of police while the DAs report to the provincial law departments. This has generated many complaints vis-a-vis the prosecutors who do not guide the investigators of the legal lacunae in their cases which turns out to be helpful to the defence counsel. The separation of prosecution is an important component of police reforms where 'investigation' has already been separated from general 'watch and ward' duties of police. The Interior Division prepared different drafts of the ordinance under instructions of the federal government. These drafts were rejected one after another by the provinces and National Reconstruction Bureau (NRB) till the third and final draft was finalised on July 18. Whereas the provinces wanted a strong, proactive prosecutor, the NRB and the Interior Division differed from the provinces on the plank of interference in police work. The final draft has now been sent to the Ministry of Law for vetting following which it would be sent in a short while either to the federal cabinet or directly to the provinces for promulgation. Under this draft ordinance, the prosecution service would be headed by a prosecutor general who would be responsible for the general administration of the service. The district public prosecutor and public prosecutors would constitute the district arms of the service. The provincial government shall exercise general control over the service. The members of the service would be recruited through a competitive examination to be held by the Public Service Commission. According to the draft ordinance, a public prosecutor shall safeguard the interest of the state in prosecution of before the competent courts. The public prosecutor, on receipt of a challan (police report under Section 173 of the Code of Criminal Procedure 1898), would lodge it for trial. But the prosecutor could return the challan to investigation officer on account of insufficient evidence and investigation. In view of the fact that certain cases are ultimately settled among the conflicting parties, the draft ordinance enables the district prosecutor to withhold prosecution for a limited period of time if circumstances and investigation shows that parties would make a compromise. Normally a lot of the court's valuable time and client's money gets wasted due to a number of adjournments to effect a settlement. In this scenario, the prosecutor general, and the district public prosecutor (within their jurisdictional brackets) may withhold prosecution if he reasonably feels that the same shall be compounded (settlement is reached). But in case the offence is not compounded within a period of one month, he shall lodge the report in the competent court for prosecution. Another positive and significant element of the ordinance is that the prosecutors could seek discharge of cases with weak evidence and those instituted on mala fide grounds. The draft ordinance also enables the Prosecutors to seek progress reports in investigation of cases for onward submission to courts in cases where challans do not come up within 14 days. Further, a public prosecutor within his jurisdiction may issue general guidelines to police officers regarding the state of their investigation and other matters necessary for effective prosecution. The district public prosecutor may also ask the district head of investigation to take disciplinary action against an investigation officer, for colluding, misrepresenting facts, not conducting investigation with diligence, or preparing the challan inefficiently.

From http://www.paknews.com/ 08/03/2002

No More Private Jobs for Bureaucrats

The military regime has disallowed the government servants from taking extraordinary leave (EOL) for joining private and corporate sector jobs, it is learnt. Sources told The News here on Friday that the chief executive had immediately stopped the grant of extraordinary leave to government servants, who were interested to join the private sector, non-governmental organisations (NGOs) or the corporate sector. This permission was granted a few years back to the government servants to take private sectors jobs for the purpose of both getting the private/corporate sectors experience and earning money through legal means. Now the option of extraordinary leave will be available to the government servants but they would not be allowed to do any job in the private sector or corporate sector. Those who have already been allowed the EOL to join the private sector, the sources said, could complete their contract of their present private/ corporate sector job. However, they would not be given any further extension in their already-sanctioned EOL. Chief Executive Secretariat sources indicated that the ban on EOL for taking jobs outside the government had been placed following reports that some of the government servants, who were allowed EOL to join the private sector, were serving against the interest of the government. The policy of allowing EOL for private jobs is said to be in conflict with the government's interest. The policy it is believed may encourage the government servants to favour any particular private sector concern where they would be interested to take job in the future. However, the other viewpoint is that any chance for the government servants to serve in the private or corporate sector helps him to learn about the working as well as problems of the private and corporate sectors. This experience, it is said, can be helpful for the government in evolving friendly policies for the encouragement of private/ corporate sectors. There are many government servants, who are trying their luck in the private and corporate sector to increase their legal means of earning. A number of government servants have joined the private sector, the non-governmental organisations and corporate sector recently on salaries that are many times higher than what they were getting in the government. Taking the advantage of the government's previous policy of allowing EOL for private sector jobs, a number of government servants joined the private sector organisations like the National Rural Sector Programme (NRSP) and Khushhali Bank.

From http://www.paknews.com/ 08/03/2002

Power Rate Up by 19 Paisa Per Unit

The government has announced 19 paisa per unit average price increase for domestic consumers of electricity here on Friday. According to an announcement of the Ministry of Finance, this decision was taken in response to the president's instruction to review the 39 paisa per unit tariff hike announced by the National Electric Power Regulatory Authority (Nepra) for domestic consumers.

From http://www.paknews.com/ 08/03/2002

PPP, PML-N Criticise New Law

The PPP and PML (N) have strongly opposed abolition of seats for technocrats in the National Assembly and right of double vote for minorities in the forthcoming general elections. Condemning the law enforced on Thursday to further amend the Conduct of General Elections Order 2002 as a black law designed specifically to keep Benazir Bhutto out of electoral contest. The PPP spokesman said the party is studying the new law and is determined to face the challenge both politically and legally.

From http://www.paknews.com/ 08/03/2002

TOP°Ł

 


Armenian President Signs Law Reversing Earlier Electoral Reforms

Armenian President Robert Kocharian on 1 August formally signed into law a recently adopted bill overturning the electoral reforms enacted in December 2000, according to RFE/RL's Yerevan Bureau. The new law increases the number of parliamentary seats based on single-mandate constituencies from 37 to 56, and decreases from 94 to 75 the number of seats elected on a proportional party-list basis (see "RFE/RL Newsline," 5 and 8 July 2002). The law was harshly criticized by the opposition and even the usually pro-government Armenian Revolutionary Federation (ARF) condemned it as a violation of a standing multiparty agreement establishing a ratio of seats in the parliament. The law also altered the composition of the Central Election Commission, reducing its members from 13 to nine, with three members to be appointed by the president and the remainder by the six political parties represented in parliament.

From http://www.rferl.org/ 08/02/2002

Armenian Election Dates Set

At its first session on 7 August, Armenia's newly constituted Central Election Commission scheduled presidential elections for 19 February 2003 and parliamentary elections for 25 May 2003, RFE/RL's Yerevan bureau reported. The nine members of the reconstituted commission were named earlier that day. Three of them, including previous Chairman Artak Sahradian, were nominated by President Robert Kocharian, and six by political parties represented in parliament.

From: http://www.rferl.org/ 08/08/2002

Azerbaijan: Constitutional Referendum Declared Valid

Baku, (RFE/RL) -- Azerbaijan's election officials have declared today's referendum on constitutional change valid. Officials reported a 67 percent turnout eight hours after polls opened. Polls close at 7:00 p.m. Prague time, and preliminary results are likely to be issued shortly afterwards. Opposition groups issued a statement saying there had been widespread election violations, including falsification of turnout figures. President Heidar Aliev, who is 79 and physically frail after heart bypass surgery, also cast his vote today. Aliev brushed off opposition charges that the referendum was aimed at paving the way for his son Ilham to take over. Aliev, a former KGB officer and Soviet communist politburo member, came to power in the oil-rich Caspian Sea state almost 10 years ago.

From http://www.rferl.org/ 08/24/2002

Government Claims Victory in Controversial Referendum

The government of Azerbaijan has claimed an overwhelming victory in a controversial referendum on 24 August that the opposition and independent observers say was marked by fraud and intimidation. The government defended the referendum, which made 39 changes to the country's constitution, as being necessary for Azerbaijan to meet its international human rights commitments. But critics argued that that explanation was merely a smokescreen for changes intended to cement the ruling party's grip on power, possibly for another generation. Baku, 26 August 2002 (RFE/RL) -- According to preliminary results from the Central Election Commission, nearly 90 percent of Azerbaijan's 4.4 million voters turned out to cast ballots in the 24 August referendum on amendments to the constitution. The commission also reported that nearly 100 percent supported all 39 changes. But the opposition, which had called for a boycott of the vote, says such results are absurd. They claim turnout was closer to 15 percent, and that the government shuttled voters from polling station to polling station so they could cast multiple ballots. They also charge that people were forced to vote, that ballots were stuffed, and that monitors and election officials were threatened and intimidated. Eldar Ismayilov, head of the nongovernmental organization For the Sake of Civil Society, summarized the opposition's position. "These violations represent a continued effort by the government of Azerbaijan to falsify elections. The four political parties that observed these elections declare that a quorum did not take place and that the will of the people was distorted and that state-organized crime took place across the country. Therefore, the results of this referendum are illegal," Ismayilov said. But the Central Election Commission rejects those charges. Rovzat Gasimov, the head of international relations for the commission, said: "The [Central Election Commission] officially stated that no complaints have been filed to the commission on violations of law in the course of [the] referendum." The raft of changes to the constitution, which were officially proposed only two months ago, include a wide variety of issues. Human rights advocates welcomed some of them in the abstract, such as a guaranteed alternative to military service and granting citizens the right to take grievances to the Constitutional Court, the country's highest court. But two changes drew intense criticism. One eliminates the proportional-representation system under which 20 percent of legislators are elected to parliament, and the other changes the order of succession in case the president is incapacitated. The opposition charges that President Heidar Aliev pushed through the latter amendment in order to name his son, a state oil-company executive, as his successor. Aliev, who is 79 and has had serious health problems, denies that charge. He has said he plans to run for a third term as president when his term expires in October 2003. Gasimov of the Central Election Commission said voters supported the amendments because of a massive nationwide education campaign in the run-up to the vote. He said citizens realized that the changes will affect everyone. "The constitution is a thing that concerns everyone in the country. That's why the people were very active. We had a very high participation as you have seen," Gasimov said. But Andreas Gross, a Council of Europe Parliamentary Assembly member who observed voting on Saturday, said he has serious concerns about the referendum. He said he doubts an entire country could be educated about so many changes to the country's constitution in only two months. His native Switzerland would consider such changes for two years before going to the polls, he said, and American states such as California or Oregon would wait a year. He added that voting patterns indicate citizens did not really understand the 39 changes, which were broken into eight categories on the ballot. "In one polling station, out of the [840] ballot sheets, 755 [were] only 'Yes' -- only 'Yes' votes to all eight questions. And only 63 out of 840 differentiated. That means only 63 people out of 840 went to the polling station with an educated, differentiated position, and they in fact said 'no' to the four really most controversial issues," Gross said. Even before the election, critics had warned that many people would not be able to understand the ballot, which was written in Latin characters. Azerbaijan switched from the Cyrillic alphabet only a year ago, and even many educated people have difficulty reading the language in the new alphabet. Gross said the voting patterns give him reason to suspect that claims of vote fraud -- of which Azerbaijan is often accused -- could be correct. "This indicates that some of the opposition people and some of the observers I also heard are right when they say some people voted under pressure. Some people under pressure had to vote several times, and some people also voted two or three times in the same ballot [station]. And that means too many things [were not] correct," Gross said. Gross, who specializes in referendum democracy, said there were serious problems with Azerbaijan's referendum even before polling day. He argued that the national requirement of a 50 percent turnout to validate the vote was problematic to begin with. Such thresholds, he said, invited the opposition's boycott strategy and the government's alleged coercion of voters. "[The] 50 percent requirement -- you can learn this from German history, you can learn this from Italian history -- is always a seduction, an incentive to boycott and to misuse the power. So they are in fact trapped by their own mistakes. Why do you have a 50 percent requirement? You don't need this," Gross said. Saturday's vote may well not mark the end of the referendum issue. International observers are still compiling reports, and the Central Election Commission is expected to announce official results by the end of the week. The opposition, meanwhile, says it will take the government to court. A referendum that was promoted as being an advance in human rights may yet end up before the European Court of Human Rights. (by Richard Allen Greene)

From: http://www.rferl.org/ 08/26/2002

Kazaks tan: The Draft Law on JSC Can Ruin 92 % of the JSC

The draft law "On joint stock companies" threatens the existence of 92 % of the JSC of the republic, Confederation of employers of RK believes. According to the current legislation the OJSCs must own 823000 KZT of authorised capital stock and CJSCs - 4 million 110 thousand KZT. THe draft law provides an increase of authorised capital stock of various JSC at least 40 times - to 165 million KZT, which means an issue and sales of an additional number of shares. However, the confederation is sure that Kazakhstani stock exchanges can't sell such amount of additional shares, which will lead to a closure of the majority of JSC.

From http://www.gazeta.kz/ 08/05/2002

New Mechanisms of Cooperation between WB and Govt. of RK

The World Bank and the Government of Kazakhstan are going to agree on the new mechanisms of cooperation. The WB office in RK informed about that following the annual review of the country portfolio of bank projects. According to Dennis de Trey, director of the regional WB office for Central Asia, it is related with the stable economic growth in Kazakhstan, considering which the Government "received an opportunity to reduce the volumes of foreign loans". As it is known, in the last financial year Kazakhstani Government abstained from attraction of program loans and financing of technical aid from the loaned funds. According to WB, in Kazakhstan the priorities were determined for 2003, such as the development of a new three-year aid strategy, beginning of the Joint Economic Resarch (JER) program realisation and strengthening the bank projects portfolio management. The initiative of JER organisation belongs to Kazakhstani Government. Within this program the Government and the World Bank will finance the research in the key economic areas of the country on the parity basis.

From http://www.gazeta.kz/ 08/14/2002

Tajikistan Adopts Policy on Intensive Economic Development in 2003

DUSHANBE, August 22, Asia-Plus - In 2003, rates of growth of Gross Domestic Product (GDP) are expected to be no less than 10-11 percent (110-111 as percentage of the current year). As the Head of the Economy Ministry Department for Combined Prognosis and Social Development Rahmon Bahronov told Asia-Plus industrial production and gross agricultural output are supposed to increase by 10% and 8.2% respectively. A volume of external trade turnover of Tajikistan is expected to increase by 3.3 percent and a volume of retail commodity circulation will increase by 12 percent. A volume of paid services to population is expected to increase by 10 percent. Bahronov said that in 2001, the rate of growth of GDP was accounted for 9.3 percent, rate of growth of industrial production - 12.4 percent and rate of growth of the gross agricultural output - 11.9 percent. He noted that although those indices were quite high as compared to some other CIS countries but as percentage of the year of 1991 in 2001, the GPD production was accounted for only 43 percent, industrial production - 46 percent, gross agricultural output - 55 percent, a volume of retail commodity circulation - 10 percent, paid services to population - 51.3 percent. According to Bahronov, proceeding from tendencies of Tajikistan's economy development for the last 3-4 years they suppose "to adopt the policy on intensive economic development". He notes that Tajikistan has all opportunities and conditions for increasing production of industrial and agricultural output in order to increase GDP in 2003 up to 4 billion Somonis. He noted that under such conditions it was possible to increase the revenue part of the national budget by 19-20 percent. Bahronov also said that in January-July of the current year, the plan of tax receipts was over-fulfilled by 11-12 percent. The over-fulfilled volumes of taxes may be used in social sector. At the same time, he noted that in January-July of 2002, only 81 percent of the expenditure part of the budget were fulfilled. Rahmon Bahronov also said that recently, they had worked out prognosis indices of socio-economic situation in Tajikistan. The indices have been submitted for consideration to the Government of Tajikistan and Finance Ministry. These indices will underlie formation of the national budget of Tajikistan for 2003.

From: http://www.ap.infotaj.com/ 08/22/2002

Uzbekistan: Merchants, Consumers Paying High Price for Presidential Decrees

Merchants in Tashkent's biggest bazaar, Carsu, in the heart of the old city, were the first to strike in July. They were followed shortly after by merchants in another of the Uzbek capital's famous markets, Aviasozlik. And on July 25, shopkeepers in the largest bazaar in the country, Otchopar, joined the strike, too. The merchants went on strike to protest recent decrees by the Uzbek government that they believe will drastically affect their ability to earn a living. A decree passed in May governing the importation of goods into Uzbekistan imposes a single 50 percent customs duty on imported foodstuffs and a 90 percent duty on nonfood items, based on the value of the goods. After paying these fees to the customs office, importers receive a special certificate that permits the sale of these goods in Uzbekistan. Retailers must provide this certificate to tax inspectors upon request or risk having their goods confiscated. The government says the reasons for the decree include controlling the outflow of hard currency prior to the introduction of free currency convertibility, which is promised by the end of the year, and to regulate and simplify the country's customs duties and taxes. But in a recent speech, Uzbek President Islam Karimov said the main goal of the new decree is to protect Uzbekistan's domestic production. "If we continue to fill our domestic market with low-quality imported goods, we put ourselves onto the list of undeveloped countries that, despite being rich with raw materials and more importantly, with a qualified labor force, can't build an appropriate economy, can't produce [its] own quality consumer goods." The first attempts by the government to enforce the new decree resulted in shopkeepers in the Carsu bazaar and on Navoiy Street, the capital's central shopping boulevard, closing their stores. The merchants feared their goods would be confiscated because they didn't have the proper paperwork. In an attempt to end this practice and to avoid any misinterpretation of the decree, Uzbek officials are spending time in the bazaars, explaining how the new law works. The director of Otchopar, Muhiddin Atashikov, explains that they "organized a bunch of meetings with merchants. Besides, we invited customs officers, and there were seven to eight seminars in nine pavilions of our market. I don't believe that [the new decree] is difficult to understand. One who is interested in understanding should know that the decree doesn't affect him much." Despite this explanatory campaign and official warnings, most of the merchants in Otchopar joined the protest action July 25 and 26. Some did not open their stalls at all, while others displayed their goods but did not sell them. Otchopar features some 9,000 stalls and 7,800 merchants selling consumer goods. Atashikov says that up to 40,000 people come to the market each day, paying 50 soms to enter. He estimates the cost to the local budget of a strike by merchants is around $5,000 a day. The introduction of the customs duty for imported goods is not the only new law that merchants have had to deal with. Another decree signed last month by President Karimov aims to regulate taxes in the retail and food service system. Interpreting the president's decree, local authorities started to increase taxes. Tashkent's mayor raised income taxes by almost 107 percent. If a retailer who owns a stall at the bazaar had to pay a monthly income tax equivalent to five monthly minimum wages before, the same merchant -- starting 1 July -- is now obliged pay the equivalent of 10.5 monthly minimum wages. After realizing the economic consequences of this second decree, more and more merchants in Tashkent didn't open their shops and stalls in protest. A shopkeeper in Tashkent's Aviasozlik market expressed her frustration to RFE/RL. "Trade has already been dead. Before, if I sold daily items worth 4,000 soms ($3.33), 3,000 sums went to the state in the form of different taxes and only 1,000 soms were left for me. It was, of course, not enough even for food. Now, if taxes are increased about 105 percent, I should sell the smallest item for 20 soms that cost 10 soms before. People have no money. First, [the government] should give people money to make them able to afford to buy expensive goods. The entire burden of these decrees goes directly onto the shoulders of ordinary people." Independent observers who asked not to be identified say they believe the real aim of the new decrees may be to eliminate individual importers and merchants and to place the country's import and retail trade in the hands of a small monopoly. But these analysts question the logic behind such motives. They say such moves could dramatically increase unemployment in Uzbekistan, considering the large number of people who depend directly or indirectly on the economy of the bazaars. The new decrees have made individual traders across the country uncertain of their futures. Ma'rufdjan Abdurakhmanov, the director of Mavlono, a small private company in Ferghana, describes the situation in the regions. "Already a lot of shops are closed down. Almost all merchants are closing their businesses. Due to increased taxes, all shopkeepers, including big and small, have to stop their work." Atashikov, the director of Otchopar, says it is time that Uzbek bazaars are turned into civilized markets, with a proper cash register system, guaranteed quality, and consumer rights protection. (by Zamira Eshanova)

From http://www.eurasianet.org/ 08/01/2002

New Law to Ban Tobacco Advertisement in Mass Media

The ninth session of the Uzbek Parliament, which will open on 29 August, will consider the bill on introducing changes and additions to the Law on Advertising, which was adopted in December 1998.According to chairman of parliamentary Press and Information Committee, Otkir Khoshimov, the bill will for the first time introduce the concept of a "trade mark". In case the bill is adopted, interdictions on product advertising will also cover advertising of trademarks, Khoshimov told Narodnoye Slovo daily.The bill stipulates that advertising on TV and radio should not be louder than the programmes. It is proposed to put into order placement of external advertising, including prohibiting placement of advertisement boards near traffic lights, crossroads and traffic signs.The deputies are also to consider the issue of tightening of alcohol advertising. Thus, external advertisement of alcoholic drinks with proof of up to 28 degrees should be placed not closer than 500 metres not only from children's establishments, but also universities, lyceums and colleges.The bill proposes banning of advertising of tobacco and tobacco products in all mass media, as well as public transport, Khoshimov said.

From http://www.uzreport.com/ 08/22/2002

Australia: States Pay to Win New Crimefighter

JOHN Howard has brokered a deal for a new national law enforcement body, with two controversial Carr government advisers helping him clinch an agreement with the states. A secret meeting in the Prime Minister's Sydney office on Wednesday sealed the fate of the troubled National Crime Authority, and in its place will rise the Australian Crime Commission. The NCA will cease to exist in December, when the ACC will take over its coercive hearing and telephone interception powers. Since a falling-out last year, Mr Howard has been keen to sideline the NCA. The ACC will broadly take the form proposed unanimously by the states but rejected two weeks ago by the federal Government, with a charter to fight organised crime and the emerging threat of terrorism. The deal was finalised yesterday, following Wednesday's meeting attended by three Howard advisers and two proxies for NSW Police Minister Michael Costa - academic Richard Basham and former detective Tim Priest. Another Costa adviser, former NSW Police Internal Affairs commander Geoff Schuberg, is expected to become the ACC's director of operations. The ACC will be chaired by Australian Federal Police Commissioner Mick Keelty. Its hearings will be conducted by an official chosen from the ranks of senior criminal lawyers. Former Queensland crime commissioner Tim Carmody is considered a front-runner for the job. Crucial to this week's deal was the federal Government's concession that the ACC will have its own in-house investigative capacity. It will not be just an intelligence assessment agency as originally proposed. In return, the states have agreed to fund the secondment of police from their forces to the national body. For the past eight years, the commonwealth has footed the NCA's bill. The states will formally approve the new commission at a meeting of police ministers in Sydney on Friday. Neither federal Justice Minister Chris Ellison nor Mr Costa, who acted as negotiator on behalf of the states, would comment yesterday. Spokespeople for both ministers would only say discussions this week had been "productive". Both levels of government have agreed to include ASIO director-general Dennis Richardson on the ACC's new board - involving the spy agency in domestic crime fighting for the first time. The commonwealth also has agreed to give up a board spot that was to be taken by one of its agencies, meaning voting numbers are split evenly between the states and Canberra. Final details about the ACC's budget and personnel were being finalised yesterday, but a plan suggested earlier this week to retain only half the NCA's investigators has been dropped. Mr Basham's and Mr Priest's involvement in the deal comes eight months after they joined Mr Costa's inner circle - Mr Basham as an adviser in his office and Mr Priest initially as an adviser but now as an informal confidant who works out of the University of Sydney's criminology department. Both had objected vigorously to some senior police management in the NSW force, particularly crime management in the western Sydney suburb of Cabramatta. In April the contract of a key target, then police commissioner Peter Ryan, was terminated. The ACC will be chartered to attack organised crime in a more vigorous manner than its predecessor. Figures provided to the federal Government this week showed that the NCA last year achieved lesser results than the NSW and Queensland crime commissions. (by Martin Chulov)

From http://www.theaustralian.news.com.au/ 08/03/2002

250,000 Welfare Recipients Penalised for Breaking Rules by Tim Colebatch

The Federal Government penalised more than 250,000 students and welfare beneficiaries in the year to June for offences such as failing to reply to letters, the Australian Council of Social Service has revealed. In a submission today to a Senate committee considering legislation to extend penalties to parents and the mature-age unemployed, ACOSS says the penalties average $800 each, or more than four weeks' welfare benefits. ACOSS president Andrew McCallum said yesterday that 33,000 people dependent on welfare had their benefits completely withdrawn for eight weeks for having breached administrative rules for a third time." Charities and community organisations around Australia tell us that the most disadvantaged and vulnerable in our community are coming to them for crisis help when their payments are reduced or stopped," Mr McCallum said. "This includes people with low literacy skills, indigenous Australians, young people, people with mental illness or brain injuries, and those with alcohol or drug problems. "He said the system was pushing students and unemployed people deeper into poverty. The ACOSS submission calls for reforms to reduce the penalties to a maximum of two weeks without benefits, to be imposed as a last rather than a first resort. It asks the Senate to adopt the recommendations of the independent review of penalties chaired by former Commonwealth ombudsman Professor Dennis Pearce. The review suggested that the penalty regime be recast to give beneficiaries a chance to make good any rule breaches and fine them if they failed to do so. ACOSS cites an opinion poll commissioned by the Brotherhood of St Laurence that found the median penalty proposed ranged from $20 for a first offence to $75 for a third offence. Mr McCallum said penalties ranged up to $1600 a time on people already disadvantaged. "An equivalent penalty for the Prime Minister, if he were to miss an interview, would be a fine of $40,000 from his salary," he said. Under the government's proposals, sole parents would be fined $987 for missing a Centrelink interview or failing to reply to a letter, ACOSS said. Extending activity testing to parents was unlikely to produce better employment outcomes. Welfare lobby groups will tell the Senate inquiry the penalties system should not be extended to new groups until the present penalty system is changed. Michael Raper, head of the Welfare Rights Centre, said parents should be offered more help to enter the labour force.

From http://www.theage.com.au/ 08/05/2002

Overhaul Divorce Laws, MP Urgesby Annabel Crabb

Federal Government frontbencher Ross Cameron yesterday called for an overhaul of Australia's divorce laws, proposing financial inducements for couples who stay together, as a contentious response to Australia's growing fertility crisis. Adding his voice to that of Workplace Relations Minister Tony Abbott, who expressed alarm yesterday at the trebling of Australia's divorce rate since 1975, Mr Cameron said the Family Law Act could be amended to offer tax incentives to couples who signed away their rights to no-fault divorce. The Catholic NSW MP, who was appointed parliamentary secretary to the family services portfolio by Prime Minister John Howard after last year's election, told The Age he would be interested in pursuing a "two-tiered system" of Australian marriages. "At the moment we've produced a one-size-fits-all arrangement where it's one way in and one way out of marriage," he said. "I would be open to the idea of couples really electing whether they were intending to enter into a more civil-style contractual arrangement that was breakable by either party at will, or alternatively entering into a marriage for life, an indissoluble arrangement that would attract certain benefits." Mr Abbott told the ABC's Insiders program he was worried about the trebling of the divorce rate since the Whitlam Labor government passed the Family Law Act in 1975, but he stopped short of advocating legislative reform in the short term. The comments from both conservative Liberals come as the Howard Government searches for a third-term agenda confronting the problems of Australia's ageing population and slowing birthrate, which stands at 1.7 per cent far below the 2.1 per cent needed to support a static population. While Mr Howard is unlikely to adopt a solution as radical as that outlined by Mr Cameron, he is looking at a range of incentives for Australians to have more babies. Mr Cameron said there was no doubt permissive divorce laws were contributing to Australia's poor birth rate. "The connection arises from the fact that women in particular - but not exclusively - say that they would like to be married before they have children," Mr Cameron said. "If we then either never marry, or marry much later, or stay married for a shorter period of time, then it will, I think, have an inevitable effect on the birth rate. It's also the case that the most significant pockets of poverty in Australia are those connected with single-parent families following separation and divorce." He said that Australia's 45,900 divorces last year had cost the community an estimated $3 billion in court and personal costs. He described the Family Law Act, which introduced no-fault divorce, as "one of the most divisive and hated pieces of legislation on the Commonwealth statute books", and said it could be amended to establish the two-tiered system. "I would be a bit reluctant to be giving (Attorney-General) Daryl Williams advice on his portfolio, but I would say that I don't think any piece of legislation should be a kind of museum piece, or some kind of artefact that must never be subject to review," he said. "There's no doubt that there are massive public policy benefits that flow to the community from durable relationships and I'd be open to potentially looking at some way of acknowledging those benefits that flow to the community." Since his appointment to the portfolio, Mr Cameron has spoken passionately of the need to lift Australia's fertility rate, at one point urging his Coalition colleagues to go home and "do something for Australia".

From http://www.theage.com.au/ 08/05/2002

Anti-Spam System Launched

Bluebottle Systems has launched a system that protects a user's email accounts including Hotmail and Yahoo! from spam, a media release says. A patent is pending. The system works by only accepting email from known senders. When Bluebottle receives an email from a sender not on a users whitelist, a verification request is sent asking the sender to verify themselves in one of two ways - by simply replying to the verification request, (which automatically places them on the whitelist) or by replying with the user's full name to ensure the sender knows with whom he or she is communicating with and that the message is not unsolicited. Spammers are unlikely to respond to these requests as in most cases the reply address has been forged. In the event that the spammer actually receives the request, it is almost impossible for them to know the recipient's full name. It is the users choice which verification method they use. Bluebottle's CEO, Robert Pickup, said the problem was addressed by not accepting any email into a network before it had been verified, therefore eliminating the bandwidth and disk storage costs. Bluebottle is developing a number of services that leverage its core verification technology, including an offering for small businesses, ISPs and enterprise customers. It is also looking to engage, and work with the Open Source community to ensure its widespread adoption and interoperability with other open systems.

From http://www.theage.com.au/ 08/16/2002

PM Raises Bar on Pacific Aid

JOHN Howard yesterday signalled Australia would be pressing for a greater commitment to "good governance" from Pacific Islands Forum states meeting in Fiji this week. Playing down renewed pressure from island states over Australia's refusal to sign the Kyoto treaty on greenhouse gas emissions, the Prime Minister said good governance and the maintenance of law and order were the fundamental challenges facing many of the island states. "It is the key issue," he said when asked whether a greater commitment to good governance was the single most important matter before the meeting. He also confirmed that more Australian aid was likely to become conditional upon islands' commitment to good governance. "Increasingly donor countries are wanting recipient countries to address governance issues as a condition of receiving aid," he said. Australia has already put conditions on some of its aid to Papua New Guinea and Solomon Islands in an effort to encourage economic reforms and better governance. Mr Howard also defended Australia's decision to field former Australian diplomat Greg Urwin for the post of forum secretary-general. The post has previously been held by Pacific islanders and Australia's candidacy has created a frisson of controversy among some island personalities. The Prime Minister said Australia would defend Mr Urwin's bid on the basis of merit. Mr Howard later defended Australia's decision not to sign the Kyoto protocol, which aims to significantly reduce greenhouse gas emissions by 2012. Tuvalu Prime Minister Ma'atia Toafa had urged Australia to sign. Mr Toafa, as spokesman for the smallest of the forum's island states, said it was disappointing that as one of the region's largest aid donors, Australia did not "play its part" in averting "a disaster" facing the region. "It is very sad. I would have expected Australia to play its part in ensuring industrialised countries respect and implement the Kyoto protocols," he said. Mr Howard said Australia would not sign the protocol so long as the US and some developing states would not participate. "But we are committed to keeping our obligations under Kyoto - we're within striking distance (of that)," he said. (by Mary-Louise O'Callaghan)

From http://www.theaustralian.news.com.au/ 08/16/2002

Regulation Turns Investors Off

The Australian Competition and Consumer Commission should be split to remove the consumer bias from regulation, a leading infrastructure investor, Mike Fitzpatrick, said yesterday. At the same time, a senior Deutsche Bank executive said the threat of regulation meant her group was no longer investing in Australian regulated infrastructure and instead would invest overseas. Mr Fitzpatrick, the managing director of Hastings Fund Management, said the ACCC should be restructured so that consumer regulation was separate from economic regulation. "In this way, other parts of the community, including business, will get representation," he said. "Having heard that Allan Fels (ACCC chairman) says he thinks executives should be jailed for collusive behaviour because they are stealing from the community, we believe regulators should be jailed for stealing from utilities where we can establish that is the case. "Mr Fitzpatrick, addressing the national infrastructure conference in Melbourne, said investors had believed regulation would be light-handed; it had ended up being "light-fingered". The managing director of DB Capital Partners, Felicity Gates, told the conference that because of the investment uncertainty created by regulation, her group had not invested in regulated assets for four years. Ms Gates said her company had had a typical infrastructure portfolio, with 90 per cent of investment in Australia. However, 70 per cent of this investment would now go offshore - about the same percentage as the equity markets. She said her group aimed not at a 5 per cent profit for themselves, as ACTU president Sharan Burrow had indicated, but at a 5 per cent return for their clients. Mr Fitzpatrick quipped that his returns made him a member of the "1 per cent" club. He said a major disincentive for private infrastructure investment was the vagaries of political commitment and lack of long-term political planning. He commended the pledge by Assistant Treasurer Helen Coonan to reform sections 51AD and 16D of the Tax Act that hinder private infrastructure investment. "That needs to be sorted out," he said. Mr Fitzpatrick said the Federal Government needed to facilitate infrastructure investment in some way, perhaps along the lines of municipal bonds in the United States. Private-public partnerships provided opportunities in Australia. They were effective in the United Kingdom and Europe, and not tax-driven. "They do not need to be off the balance sheet," he said. "The major benefit is that they provide a disciplined approach to provide the delivery of social services. "Mr Fitzpatrick said there was not the overrun that affected government projects like Federation Square or Geelong Road.AMP's Asia-Pacific head of infrastructure, Danny Latham, said most balanced funds allocated 5 per cent to infrastructure. Super funds available for infrastructure would be $150 billion by 2011: the Australian Council for Infrastructure Investment's cost estimate to upgrade infrastructure. He said AMP was also not investing in regulated assets. Professor Fels had told the conference the previous day that regulation had not deterred new investment. Electricity transmission companies planned $3 billion in new investment over five years, Telstra investment had remained at $4 billion annually, and more than $800 million in new gas transmission was being built or had been committed. (by Philip Hopkins)

From http://www.theage.com.au/ 08/16/2002

ACT Laws First to Legalise Abortion

August 22, 2002 THE ACT yesterday became the first Australian state or territory to make abortion 100 per cent legal. In a close conscience vote, the Legislative Assembly voted to make abortion a legal medical procedure by striking it from the Crimes Act. In doing so, it abolished the 10-year jail penalty for women and doctors. The states either rely on a common law precedent, which allows abortion if a woman's health or mental state is at risk, or have amended their criminal laws to include a legal definition of abortion. To prevent the slim risk of backyard abortions, the Assembly also inserted protections in the Medical Practices Act so abortion can only be performed by certified doctors on licensed premises. Opponents said abortion was already possible in the Territory under the common law precedent, making the changes cosmetic but risky. Opposition Leader Gary Humphries said the Bill stripped away criminal sanctions, leaving no offence relating to abortion. He attacked the Bill as badly thought through. "To remove all penalties of this kind is dangerous,'' he said. Labor MLA Wayne Berry, who introduced the legislation last year, said abortion was a medical procedure and did not belong in the criminal code. His colleague Katy Gallagher said although no ACT women had been prosecuted under the former laws, their existence sent the message abortion was unacceptable. Premier Peter Beattie last night ruled out changes to abortion laws in Queensland. "We will be sticking to the existing position,'' Mr Beattie said. Under common law, Queensland women can have an abortion in consultation with their doctors if there are health risks. More than 15,000 women in the state had abortions last year, including 300 in the state's public hospitals. However, Mr Beattie has been under increasing pressure from within his own party to introduce abortion laws into Parliament. But he has resisted the demands, saying the issue will remain a matter of conscience in the party and he made an election promise not to change his position. Right to Life Association spokeswoman Liz Preston said the split of votes indicated division on the move, which she described as a tragedy. "Although abortion is freely available in Australia, to have a parliament take it off the Crimes Act, is very sad,'' Ms Preston said. "To be turning our backs on unborn children, and doing it through our laws, is very disappointing.'' The Bill was passed nine votes to eight, with Liberal MLA Helen Cross holding the deciding vote. She said she agonised over her decision, but felt because the laws were "not worth the paper they're written on'', the stain of criminality should be removed. Abortion has been a hot topic in the ACT since 1998 when former MLA and prominent footballer Paul Osborne sparked the introduction of more stringent abortion practices. (by Maria Moscaritolo, Rosemary Odgers)

From http://www.theaustralian.news.com.au/ 08/22/2002

Minister Makes Smuggler Hit List

August 28, 2002 AUSTRALIAN authorities have set their sights on extraditing a number of key people-smuggling operators from the Asian region, buoyed by this week's Thai court order that alleged kingpin Hasan Ayoub be tried in an Australian court. Mr Ayoub will be the first alleged major operator to be extradited, pending an appeal. Justice Minister Chris Ellison said yesterday "a number of people of interest" were being pursued. Among them is Ali Jenabi who will also face a Bangkok court. A date has yet to be set. He is wanted by Australian authorities on 18 people-smuggling charges that carry prison terms of up to 20 years under toughened laws passed by the Howard Government. "Again we have had great co-operation from the Thai authorities on that matter," Senator Ellison said. The man alleged to be behind the disastrous Siev X vessel, which foundered off the Java coastline drowning 353 asylum-seekers, Abu Quassey, is also being sought by Australian police. Senator Ellison said three warrants were out for his arrest in relation to people-smuggling offences. Mr Quassey is in the custody of Indonesian police and is being tried in Indonesia for immigration offences. "We are liaising with Indonesian authorities in relation to Mr Abu Quassey and we have received great co-operation from Indonesian authorities," Senator Ellison said. "We are very keen to have Mr Quassey front an Australian court to answer those three charges." Australia has never successfully extradited a smuggler from Indonesia, which has no laws against people-smuggling. But Howard government officials hope progress will be made on the issue at a regional conference in Malaysia next month, following the Bali people-smuggling conference last February. Indonesia is drafting legislation that will make people-smuggling an offence. Once dual criminality can be established with Australia, the extradition laws can operate. Mr Ayoub said he would appeal against Monday's decision in Bangkok Criminal Court that he be extradited to face a potential 20-year jail term on 13 charges under the Migration Act. It is alleged he organised two boatloads of 200 people each from Jakarta between December 2000 and April 2001 and was caught after a boat carrying 248 people was intercepted leaving Cambodia last year. Welcoming the outcome, Opposition justice spokesman Daryl Melham said the Ayoub decision highlighted the importance of co-operation with the region. "It's practical law enforcement co-operation, not political grandstanding that is going to get results," Mr Melham said. (by Megan Saunders)

From http://www.theaustralian.news.com.au/ 08/28/2002

New Zealand: Illegal Housie Games Raided

Five Whangarei people face prosecution after gaming officers swooped on two private houses operating housie games without a licence. Officers from the Internal Affairs Department's gaming and censorship regulation unit visited homes in Otangarei after complaints about housie games being run several nights a week. "Full houses" of 30 to 40 people were found at both homes when search warrants were executed in May, said Geoff Lawry from Internal Affairs. Under the Gaming and Lotteries Act, courts can impose fines of up to $4000 for individuals convicted of running illegal games of chance. The general manager of the gaming and censorship regulation unit, Keith Manch, said non-casino gambling was allowed only as a means of community fundraising but the Government required housie and other forms of gambling to be licensed. A decision on prosecution is expected to take several weeks. (by Tony Gee)

From http://www.nzherald.co.nz/ 08/02/2002

Environmental Watchdog Wants More Tax, Less Growth

Parliament's environmental watchdog has questioned the Government's drive for faster economic growth, and wants new taxes on packaging and tourists. Dr Morgan Williams, a former Agriculture Ministry ecologist who has been Parliamentary Commissioner for the Environment since 1997, says economic goals need to shift from growth to "sustainable development". In a 182-page report issued today as a prelude to this month's World Summit on Sustainable Development in South Africa, he says successive New Zealand governments have "largely ignored" the promises made at the last Earth Summit in Brazil 10 years ago. The report will embarrass Environment Minister Marian Hobbs, who is due in Johannesburg for the conference opening on August 26, and Prime Minister Helen Clark, who plans to attend the summit sessions from September 2 to 4. In a written response last night, Ms Hobbs welcomed the report, but her spokesman said she would not be interviewed about it. The Government would study the report and assess its implications before responding formally to the commissioner, Ms Hobbs' statement said. The Green Party, which is negotiating with Labour over a possible coalition government, welcomed the report. Greens co-leader Jeanette Fitzsimons said the party was yet to receive a copy of the report, but it seemed to be promoting ideas which the green movement had been pushing for 30 years. The report says the Government's February innovation statement gave priority to economic growth over environmental and social values. The statement set a goal of lifting New Zealand's average incomes into the top half of the Western world. Finance Minister Michael Cullen said 4 per cent a year growth in gross domestic product would be needed to achieve that objective. Dr Williams told a briefing in Auckland that economic growth should be only a means to an end, and the real goal should be "quality of life". "We have used quality of life because that is the outcome that society is trying to achieve - not necessarily 4 per cent growth in GDP, which is simply a measure of some of the activity in society," he said. "It's about qualitative advancement, rather than quantitative advancement." His report says that quantitative growth can become "uneconomic" if its benefits to people living today are outweighed by damage to ecosystems needed to sustain future generations. The report recommends taxing activities that damage the environment and subsidising activities that protect it. "We are very, very light on environmental taxes," Dr Williams said. "They are about half the OECD level, and well behind the leading countries like Denmark." Energy taxes and taxes on carbon dioxide and other pollutants raised about 10 per cent of tax revenue in Denmark in 1998, compared with 5 per cent raised in New Zealand from petrol tax, car licence fees and road user charges. Dr Williams said New Zealand was third-worst in the Western world in energy efficiency, and one of the biggest users of packaging, because of the lack of such measures here. He said British supermarkets had estimated that they could save °Í2 billion ($6.7 billion) by charging customers for plastic bags instead of giving them away free with their groceries. "In New Zealand there has been a lot of discussion over five or six or seven years on voluntary packaging accords," he said. But little had happened, so "maybe it needs a prod along, and a prod along would be to put some charges on packaging". Dr Williams said tourists should bear some of the costs of protecting New Zealand from foreign bugs that threatened farming and the environment. This could be done through higher airport taxes, as well as the fees already charged if officials need to fumigate anything entering the country. (by Simon Collins)

From http://www.nzherald.co.nz/ 08/05/2002

Job Laws 'Inhibit Growth'

A survey of Auckland businesses has found that over half say they have held off expanding because of concern at the country's labour laws. The Business Herald Survey, conducted in conjunction with the Auckland Chamber of Commerce, found that 54 per cent of companies reported they had been inhibited from taking on extra staff because of the employment rules. In addition, 84 per cent said they would be more likely to expand staff numbers if there was a trial period during which new staff could be laid off without the risk of a personal grievance if things did not work out. That finding dovetails neatly with a recent OECD report which concludes that labour market rigidity is a key factor in why start-up companies seem to flourish in some countries and not in others. The issue is of considerable importance in New Zealand because last year's Global Entrepreneurship Monitor report showed us to be top of the world in starting new businesses and bottom of the world in developing them to significant size. The OECD has just issued a working paper - "The role of policy and institutions for productivity and firm dynamics" - which among other things looks at why new companies seem to flourish better in some countries than others. It found that in relatively highly regulated European countries, new companies tended to start fairly large and to grow little. By contrast, in the more loosely regulated United States, new entrants started smaller, had a fairly similar survival rate, but expanded much more rapidly. The OECD economists said their data suggested that "low administrative costs of start-ups and not unduly strict regulations on labour adjustments in the United States are likely to stimulate potential entrepreneurs to start on a small scale, test the market and, if successful with their business plan, expand rapidly to reach the minimum efficient scale". New Zealand was not one of the countries studied, but the conclusions have relevance here. For instance, the Gem report found barriers to start-ups in this country to be extremely low - in fact we had the fourth-lowest barriers of the 29 countries listed - which goes some way to explaining both why there are so many new ventures and why they are so small. The Gem report did not look at labour-market flexibility, but anecdotal evidence would suggest New Zealand's rules on hiring and firing are more restrictive than in the US and looser than in most of Europe. Nevertheless, a University of Auckland Business School study of small to medium-sized enterprises (SMEs) indicated that worry over falling foul of the regulations was a major reason for the lack of growth in our start-ups. Senior lecturer Barbara Simpson said there was a genuine reluctance to employ strangers because it might lead to complications. A not uncommon message from business was, "We'd like to grow, but we don't want to employ anybody else, because we don't understand ACC, we don't understand the ERA, we don't really understand what we'd be taking on if we employed someone." The chamber of commerce survey, and another by the National Bank, confirms that view. Chief executive Michael Barnett said the fact that over half the 700 businesses surveyed said Government regulations had inhibited them from taking on extra staff pointed to quite a problem. "It is," he said, "a sad day when a Government claiming to support full employment shoots itself in the foot with policies that inhibit businesses from hiring more staff." A survey by the Australian Chamber of Commerce and Industry has identified a similar situation across the Tasman. The ACCI has been arguing strongly for Australia to follow the example of countries like Britain, Austria, Canada and Germany, which give small businesses more flexibility in hiring and firing staff. That proposal formed a key plank in Prime Minister John Howard's successful campaign for a third term in office, although it has since been blocked in the Senate. It is an idea taken up by National's election policy promise to make provision for a 90-day trial period during which no personal grievance claim could be brought. The Auckland Chamber's finding that 84 per cent of businesses would be more likely to take on extra staff on that basis would certainly seem to endorse that sort of approach. Barnett said he would like to see consideration given to something similar in this country. A 90-day trial period was one option. Another would be to review the present legislation to take out the provisions which were scaring businesses away from employing staff. "If it's going to give greater security to employers and mean more people are employed, then any government should do it." * In Dialogue tomorrow, Peter Tritt, advisory service manager of the Employers and Manufacturers Association (Northern), and Ross Wilson, president of the Council of Trade Unions, give their views on easing labour rules to encourage employment. (by Jim Eagles)

From http://www.nzherald.co.nz/ 08/05/2002

Big Splash in Fuel Exploration

The Government has awarded new exploration permits to 19 companies in the largest licensing programme in a decade. Twenty-one five-year permits were issued after a competitive bidding round for the 20 onshore and six near-shore blocks, in up to 1000m of water in the country's main oil and gas region of Taranaki. Five of the 26 blocks were not allocated because of lack of bidders, or bids being too low. Two of the three offshore permits issued went to a partnership between the New Zealand exploration arm of Shell, OMV Australia, and local privately owned Todd Petroleum - a grouping which also owns the Maari prospect. "With more companies exploring over generally smaller permit areas than issued in the past, it is hoped that this will lead to more oil and gas being found," said Associate Energy Minister Paul Swain. Successful bidders must drill at least one exploration well within four years, and will pay the state 5 per cent of any net sales or a 20 per cent royalty, whichever is greater. The value of all work programmes submitted by the original 41 bidders was more than $540 million, but Crown Minerals has not calculated the value of the successful bids. The Taranaki Basin covers 85,000 sq km and produced 220 billion cubic feet of gas and 13 million barrels of oil equivalent in the year to July 2001. Two Australian-based companies, Tap Oil and Magellan Petroleum Australia, have joined Indo-Pacific Energy in three new onshore exploration permits. Four local companies won permits, including Wellington-based explorer Indo-Pacific Energy (NZ), which has been allocated its first offshore permit in New Zealand to the north-east of the Pohokura gas-condensate field. Indo-Pacific now holds an interest in eight Taranaki Basin exploration permits plus an interest in the Ngatoro oil field. Crown Minerals says two other companies new to the New Zealand exploration scene, Denver-based Aspect Energy and NZ-based Bridge Petroleum, have also won permits. Bridge has three onshore permits, while Aspect is joining local firm GeoSphere Exploration in two south Taranaki permits. The Taranaki region contains the Maui gas field, New Zealand's biggest, which is now expected to end its life in 2007, two years ahead of early estimates. The large Pohokura field, with estimated reserves of 964 billion cubic feet of gas and 53 million barrels of oil equivalent, is about a quarter the size of the Maui field. (by Catherine Walbridge)

From http://www.nzherald.co.nz/ 08/12/2002

Government Grants Lift R&D Spending

The Government says a new grant scheme has helped to boost business spending on research and development by about 15 per cent. The Grants for Private Sector Research and Development (GPSRD) scheme, introduced in the Labour Government's Budget in 2000, has approved 500 grants totalling $30 million in its first 21 months. Scheme manager John Gibson said an initial analysis of the first 147 companies to have used up their year's funding by July 21 this year showed that the companies increased research and development spending by $48.1 million. That was 15 per cent of the total $324 million spent on R&D by all businesses in the year to June 2000. The scheme finances up to 33 per cent of a company's increase in R&D spending, with a cap of $100,000. It is targeted at small and medium businesses with turnover of less than $50 million a year. The first 147 grants totalled $9 million, indicating that in practice the grants paid only 18.7 per cent of the companies' actual increase in R&D spending. The companies budgeted to spend $39.9 million on R&D when they applied for the grants and ended up spending more than they expected. Asked how many new technical jobs had been created as a result of the scheme, 44 companies said none, 97 said between one and five and six said between six and 10 jobs. As for non-technical jobs, 83 said no new jobs were created, 57 said between one and five, six said between six and 10 and one said more than 20. This produced a total of at least 246 new jobs. The scheme was questioned in a report last December by the Foundation for Research, Science and Technology, which said it lacked "rigorous investment processes" and had lost its original rationale because of recent tax law changes. But Gibson said the scheme was never intended to be as rigorous as the older Technology for Business Growth scheme, which provides much bigger grants of up to $800,000 for specific research projects. The average GPSRD grant so far was $60,000. He said the scheme was intended as an alternative to a tax break for R&D. But when the Government allowed a 100 per cent write-off for R&D spending in 2000, it decided to keep the new scheme as well. Of the grants so far, 29 per cent went to manufacturing and automation, 24 per cent to information, electronics and communications, 19 per cent each to engineering and primary industries, and 9 per cent to food, medicine and health. Although each grant is only for a year, the first 147 companies said they intended to spend a total of $54.6 million on R&D in the next year, indicating that the scheme was boosting ongoing research. (by Simon Collins)

From http://www.nzherald.co.nz/ 08/14/2002

Papua New Guinea: Minister Says Yes to New French Polynesia Autonomy Statute

France's minister for overseas territories, Brigitte Girardin, promised a new autonomy statute for French Polynesia and new tax exemptions for companies investing in Tahiti. Ms Girardin, who has previously been President Jacques Chirac's special adviser for overseas territories, is on a four-day visit to French Polynesia. She underlined the special links uniting Tahiti and France and recalled the French nuclear testing in Moruroa (Tuamotu archipelago) from 1966 to 1996."Without French Polynesia, France would not be a great power and France never failed to help Tahiti when needed," she said in Papeete. She said French financial support to Tahiti amounted to US$790 million in 2000 and US$920 million last year. "As President Chirac said it before, the economic restructuring fund created in 1996 after the end of nuclear tests in Moruroa will continue," Ms Girardin added. "The economic restructuring fund rules will be modified and this will really simplify the way the fund works." The French minister agreed that a new evolution was necessary for French Polynesia's 1996 autonomy statute. With this new statute, no new French law could infringe on the powers granted to the government of French Polynesia, Ms Girardin said. Protection of local employment and upgrading the legislative value of the bills voted by the Assembly of French Polynesia will also be part of the new statute. However, these new measures will have respect the French Constitution and the rules of European courts, she said. Ms Girardin also announced that a new tax exemptions device will soon be implemented for French Polynesia. She said: "Any project could benefit from this tax exemptions scheme and some fields of the economy, like the construction of touristic equipments will have even better conditions." Ms Girardin stressed the importance of environmental protection and training for young students. A new "freedom passport" will be implemented September 1st in all the French overseas territories, she said. Under this program, each Tahitian university student willing to study in France will get a free airline ticket to Paris each year. French Polynesia's President Gaston Flosse also stressed the links between France and Tahiti, claiming that "independence would lead to dictatorship and misery". He said: "Our autonomy statute was meant to evolve. Our 1996 autonomy statute is today limited by the French Constitution, out of date on some points, and ineffective on some others because some new French laws did not respect our statute." If we want our autonomy to be fully effective, a new evolution is required. "We also need guarantees about the way the economic restructuring fund will now function." President Flosse complained about "French administrative controls before or during previous economic restructuring fund operations which denied Tahiti the powers it had gained through the autonomy statute." He claimed the former Socialist government in France used this as a way to "destabilise" French Polynesia's government. Flosse also asked for France's financial support to help Tahitian airline Air Tahiti Nui buy two more Airbus A340-300 aircraft. These will be needed to take over services previously operated between Paris and Papeete by the French airline Corsair. Corsair carries approximately 25,000 tourists per year to French Polynesia. The French low-fare airline will stop its Paris-Papeete flights in March or April and Air Tahiti wants to add to its own Papeete-Paris flights to compensate. Air Tahiti Nui was launched with support from the French Polynesian Government in an effort to ensure the territory's important tourism industry is not vulnerable to changes by overseas airlines. It operates to France, Japan, New Zealand and North America using Airbus aircraft.

From http://www.pacificislands.cc/ 08/25/2002

 

Commonwealth Pacific Leaders Meet to Debate Democracy

Commonwealth Secretary-General Don McKinnon has called for Commonwealth Pacific leaders to continue to strive for promotion and consolidation of democracy in the region. Speaking at the opening of the heads of government part of a Roundtable on the Challenges of Democracy in the Pacific, being held in Nadi, in western Fiji, he said: "Democratic practice and culture are not only fundamental to an open and just society, but are essential ingredients for political, social and economic development." Organised by the Commonwealth Secretariat, the Roundtable is hosted by the Fiji Government. Fiji Prime Minister Laisenia Qarase, chairperson of the Roundtable, said democracy was a complex topic "in a part of the world where traditional authority and cultures are still strong and the democratic way is still new". "I'm sure I speak for all the regional participants when I say we welcome this initiative by the Commonwealth," Mr Qarase said. He added that the roundtable was "consistent also with the Commonwealth commitment to the deepening of democracy and the advancement of governance". Mr McKinnon said: "Here in the Pacific, democracy has faced several challenges in recent years, and strains have emerged between the inherited model most states adopted on independence, and more traditional forms of governance and democratic practice. "It was in this context that I felt the time was right to look carefully at how democracy in the Pacific could better blend the particular circumstances of the Pacific culture and social values with the universal democratic principles." Mr McKinnon said he hoped the roundtable would provide an opportunity for the Commonwealth Pacific leaders to "step back and reflect on what democracy is all about, what people's expectations in the 21st century are all about." A Commonwealth Secretariat news release said Commonwealth Pacific Islands countries participating in the Roundtable are: Fiji Islands, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Cook Islands and Niue, self-governing countries in free association with New Zealand, are also attending by special invitation, it said. President Rene Harris, of Nauru, was unable to attend the Roundtable but Nauru was represented at a two-day preparatory meeting. This was attended by parliamentarians from both the governing and opposition sides of parliaments of participating countries. The preparatory meeting produced a report for the consideration of the leaders during the roundtable. The report identified aspects of democracy in the Pacific which warrant closer examination, the news release said. This includes constitutional and electoral issues, the role of parliament, and the place occupied by culture and tradition, it said.

From http://www.pacificislands.cc/ 08/19/2002

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Hong Kong Leader Highest Paid in Asia

A report in Monday's South China Morning Post revealed Tung earned an annual salary of US$625,641. Singapore, so often seen as Hong Kong's major economic competitor, paid Prime Minister Goh Chok Tong the second highest salary in Asian politics of $600,000. Tung's hefty remuneration more than doubles that of the man at the helm of Asia's most powerful economy, with Japanese Prime Minister Junichiro Koizumi pocketing a relatively paltry $307,000. New Zealand Prime Minister Helen Clark was a surprise performer in the salary stakes, claiming fourth place with a $110,300 annual salary. At the lower end of the Asian leaders' pay league are Malaysian Prime Minister Mahathir Mohamed ($65,000), Thai Prime Minister Thaksin Shinawatra ($32,188), Philippine President Gloria Macapagal Arroyo ($24,000 U.S. dollars) and Vietnam's President Tran Duc Luong ($1,650). Around the world, Bush earns $400,000 U.S. dollars a year and Blair, the highest paid leader in the European Union, earns $262,000 U.S. dollars. Tung Chee Hwa has led Hong Kong since the handover from British to Chinese sovereignty in 1997 and has this year begun a second five-year term after being returned unopposed by a largely pro-Beijing election committee. Tung has presided over a serious downturn in Hong Kong's economic fortunes, however, and opinion polls indicate he is widely unpopular among the general public, who have no vote in choosing their leader.

From http://asia.cnn.com/ 08/19/2002

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Pacific Leaders Say Civil Society Must Be Accountable Too

Civil society and the non-government sector must also be accountable, Commonwealth Pacific leaders meeting at Nadi said as they reaffirmed support for democracy. The comment came in the statement from the Commonwealth Roundtable on the Challenges of Democracy in the Pacific, which ended today at the Sheraton Fiji Resort, Denarau Island. It reflected concern in some countries over the proliferation and growing influence of civil society and non-government organisations and questions about who supports them. The Pacific leaders also said that linking economic or other external support to "good governance" will always raise questions. And they said a free and responsible news media contribute to the democratic process. The roundtable of heads of government was chaired by Fiji Prime Minister Laisenia Qarase and facilitated by Commonwealth Secretary-General Don McKinnon. It followed a two-day preparatory meeting of parliamentarians from Commonwealth Pacific Islands countries. Leaders from Cook Islands, Kiribati, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu took part in the roundtable, as well as a senior minister from Papua New Guinea. The leaders reaffirmed their commitment to the Commonwealth and the fundamental political values contained in the Harare Commonwealth Declaration. These included democracy, democratic processes and institutions which reflect national circumstances, rule of law, independent judiciary, and just and honest government. They agreed challenges facing democracy in the Pacific in many instances came from inherited processes and institutions based on models from elsewhere. These did not take account of Pacific social, cultural and traditional values, they said. To improve democratic governance in the Pacific, the heads of government agreed: Existing constitutions often contain aspects foreign to the Pacific experience and do not take account of the circumstances and values of Pacific societies. Pacific constitutions should reflect the aspirations of and be owned by the people. The accountability of and transparency of executive and parliamentary processes should be strengthened, including in some cases through effective parliamentary committees. Electoral systems and political parties should encourage representation of women in parliament. Increased voter education is needed and there should be limits on campaign funding and expenditure and full disclosure of these. Communal values as well as individual rights are important. Land ownership and usage in Pacific societies must be respected. Civil society, including the churches, have a valuable role in promoting peace and stability. The rule of law and internal security are prerequisites for stable democracy and good governance. Corruption undermines democratic practice and Pacific values and needs to be combated in all its forms. Codes of conduct for parliamentarians and public office holders would be beneficial. Accountability must also apply to the non-government sector, including civil society. National, political party and community leaders should promote national identity where it has not fully evolved, in part due to the colonial legacy. The roundtable agreed both the Commonwealth and the Pacific Islands Forum should undertake an active programme to promote democracy in the region. The leaders said this could include supporting: closer cooperation amongst Pacific parliamentarians; leadership and best parliamentary practice training and education; training in public administration, especially in areas of finance, law enforcement and public accountability; the drafting of a model law on campaign financing; and media training, information programmes, and civic education. Attending the roundtable were: - Prime Minister Laisenia Qarase (Fiji), - Prime Minister Robert Woonton (Cook Islands), - President Teburoro Tiito (Kiribati), - Premier Mititaiagimene Young Vivian (Niue),- Prime Minister Tuilaepa Sailele Malielegaoi (Samoa),- Prime Minister Sir Allan Kemakeza (Solomon Islands), - Prime Minister Prince OUlukalala Lavaka-Ata (Tonga),- Prime Minister Saufatu Sopoaga (Tuvalu) - Prime Minister Edward Natapei (Vanuatu). - Moi Avei, a senior minister in the new Papua New Guinea government. Nauru was the only Commonwealth Pacific Islands country not represented.

From http://www.pacificislands.cc/ 08/22/2002

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Bankruptcy Procedure Gets Judicial Update

The Supreme People's Court issued a second judicial interpretation yesterday on the 16-year-old corporate bankruptcy law designed to regulate bankruptcy procedures and prevent debt evasion. The new interpretation, approved by the Judicial Committee of the supreme court on July 18, will come into force on September 1, said Li Guoguang, vice-president of the court, at a press conference yesterday. The court issued the first judicial interpretation on the law in 1991. A judicial interpretation is considered a quasi-law in China. Although it does not have the effect of a law, it is observed by courts at all levels at trial. Adopted in 1988, China's corporate bankruptcy law could not meet the changing situation and did not reflect judicial developments in the field with the introduction of the market economy, Li said. The new interpretation embodies fairness and efficiency, Li said, adding that minimizing the creditors' losses and improving the payment rate form an important goal of the courts when dealing with bankruptcy cases. When drafting the interpretation, the court drew lessons from foreign legislation and judicial experience, such as the United Nations' cross-national bankruptcy sample law and its guidelines on unified bankruptcy law. The interpretation also drew from the policies and experience accumulated by domestic courts, Li said.

From http://www1.chinadaily.com.cn/ 08/02/2002

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Acquisition Rules Assist SOEs to Restructure

Poorly managed listed companies will find it easier to restructure themselves under newly released draft rules on the acquisition of listed companies. The draft rules were published by the China Securities Regulatory Commission on its website recently and they are expected to pave the way for foreign investors to acquire State-owned enterprises. The commission has asked for suggestions on the draft rules, which define detailed procedures for the acquisition of listed companies through equity transfers by both sides of the transaction. Li Shuguang, vice-dean of the graduate school of the China University of Politics and Law, told Business Weekly: "The new rules will give strong incentives to acquisition activity as the detailed rules will make mergers and acquisitions much more efficient. "Consequently, the rules will help improve the corporate governance of domestic listed companies." Li, who helped draft the new rules, said most acquisitions in China are negotiated transactions. The regulators will encourage other forms, such as hostile takeovers, to improve the quality of listed companies, he said. Liu Jipeng, a researcher with the Finance and Securities Research Centre at Peking University and a professor of Capital Normal University, said mergers and acquisitions would be the main channel for listed firms to restructure themselves and improve their performance. "Although some disqualified firms have been or will be delisted, most poorly managed firms still need to restructure themselves through mergers and acquisitions to improve their quality, which is key to boosting the broad market," said Liu. The new rules are also expected to help attract foreign investors to buy a stake in large State-owned enterprises once overseas investors are given market access. The State Economic and Trade Commission will soon work out an aggressive plan to allow foreign multinationals to acquire State-owned enterprises, according to Jiang Qiangui, vice-minister at the commission. The new regulations could signal government approval of the sale of State-held shares in more than 1,000 publicly listed companies. As China's financial sector grows more open, analysts said more foreign investors will prefer stake transfers to direct investment. They said the new regulations are just the beginning of a major reform and that further clarifications and guidelines must accompany the new regulations for them to be effective. The draft rules on the acquisition of listed firms are seen as part of that clarification. Zhu Jianhua, an analyst with China Securities, said that the draft is a key step that the securities commission has taken to speed up industrial restructuring and the acquisition of State-held stakes in listed firms. Li said the draft has helped clear up some policy ambiguities for foreign investors who are keen to acquire State-owned enterprises through stake transfers. Liu said: "The rules will help diversify the domestic stock markets, which are presently dominated by State-held shares. "Encouraged by the acquisition rules, foreign and domestic private investors are expected to make substantial movement to acquire some State firms once they are given the green light." Hu Ruyin, director-general of the Research Centre of Shanghai Stock Exchange, said earlier: "More successful cross-border merger and acquisition deals may improve the quality of domestic listed companies and speed up the restructuring of State-owned enterprises." The value of cross-border merger and acquisition deals has only accounted for a small proportion of total foreign direct investment into China. Legal experts said China's laws on foreign-funded enterprise are largely geared towards direct-investment projects.

From http://www1.chinadaily.com.cn/ 08/06//2002

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Accountability System Makes for Effective Govt

The new accountability system will bring about a more open, accountable and effective government as well as preserving the strengths and core values of the civil service system. A spokesman of the Hong Kong Speical Administrative Region government made the remarks in a statement yesterday in response to the European Commission's (EU) fourth annual report on Hong Kong. The EU's annual report, released on Wednesday, indicated that Hong Kong has remained a free and open society and retained a lively press underpinned by the rule of law over the past five years. It said the implementation of the "One Country, Two Systems" policy in 2001 showed that Hong Kong has maintained its unique and separate identity within China, and it lauded both the central government and the SAR government for being committed to maintaining and safeguarding the principle. "Hong Kong will weather today's troubles, just as it has overcome past challenges, thanks to the rule of law, efficient administration, freedom of public debate, unique geographic position and its natural entrepreneurial spirit," it said. However, the report raised concerns about the new accountability system and said it had given rise to uncertainty in the community, which might undermine the neutrality of the civil service. "Under the accountability system, the civil service will remain professional, permanent, meritocratic and politically neutral," the government spokesman said, adding they were the qualities the government and the community would like to preserve. As far as the constitutional development is concerned, he said the Basic Law has laid down a 10-year blueprint on constitutional development for the SAR. The Basic Law leaves the right of Hong Kong people to decide on the election of the chief executive and members of the Legislative Council after 2007. "We will continue to listen to the views of different sectors of the community," said the spokesman. "Decisions will be made only after extensive consultations," the spokesman stressed. Referring the issue of the right of abode which the report also concerned, the spokesman said the SAR government acted strictly in accordance with the law in handling all cases. Hong Kong's laws, policies and practices relating to right of abode are fully consistent with international human rights obligations applicable to Hong Kong, he added. The EU is Hong Kong's third largest trading partner after the mainland and the US, with a total trade value of HK$365 billion (US$46.8 billion) in 2001, which is about 12 per cent of Hong Kong's total merchandise trade value. Meanwhile, Hong Kong is also the most important regional base for European companies in Asia. Some 1,000 European companies have regional operations in the city.

From http://www1.chinadaily.com.cn/ 08/09/2002

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China Urged to Heed Enlarging Income Disparity

China must figure out effective ways to counteract the inequity of income distribution, according to a research report by the Economics Institute under the Chinese Academy of Social Sciences, a government think tank. Although low-income families find their living conditions better-off continuously, the pace is by far slower if compared with the richer. The core problem is to create more jobs for low-income family members and make them be able to share the benefit coming with China's rapid economic growth, the report said. To date, the Gini coefficient - a key gauge of income disparities - in China has reached 0.39, closely next to the recognized danger level of 0.40. Two reasons have mainly brought about the ever-enlarging income gap in present China, according to the report. The first one is the income disparities between different areas and industries. Urbanites and those working in government monopolistic sectors, for example telecommunication and banking, generally earn much more than farmers and city dwellers in non-monopolistic industries. The other is the employment discrimination against different social identities. In China today, seldom can farmers gain an equal footing while competing with their urban counterparts in job-seeking. Such discrimination also further pushes farmers to a disadvantageous corner while they try to elevate themselves through other means, for instance education and vocational training. Correspondingly, the report offers two remedies. First, the central government must speed up the process of industrialization and urbanization, which will fundamentally erase the inequalities due to different economic development levels between rural and urban areas. Second, demolish the monopolistic hedges of some industries and lift the discriminative measures attached to different social identities. The first specific step should be to gradually cancel the existing household registration system, which has in fact differentiated two completely different social identities between farmers and urbanites and has served as the basis of discriminations against the former. Another key step is to ensure that farmers can share the same rights in education and vocational training as their city counterparts. What farmers actually lack sometimes are not opportunities but the capacity to grasp them. The report suggests building up a more sensitive taxation network to oversee the tax evasion by corporations and upstart individuals. As a matter of fact, tax authorities has already moved to tighten the net for tax dodgers. Late last month, Chinese film actress Liu Xiaoqing - popularly referred as the richest woman in China - was arrested for the alleged tax evasion. Analysts consider this a signal of the Chinese Government's efforts to soften the social dissatisfaction of the worsening inequity of income distribution. The report also advises the central government to employ a tougher fist against corruption. Quick money funneled through corruption is the most salient factor eroding the basis of a fair market mechanism, according to the report. (by Forest Lee)

From http://english.peopledaily.com.cn/ 08/15/2002

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China Prosecutes A Banker as Loan Scandals Continue

The Chinese government announced today that it would bring corruption charges against a former top banker, Zhu Xiaohua. He becomes the most prominent corporate leader to face charges of criminal malfeasance in China since the country began its move toward a market-based economy two decades ago. Mr. Zhu, who was president of China's sixth-largest bank, the China Everbright Bank, until his abrupt dismissal in July 1999, was criticized in unusually strong terms tonight on the national nightly news program of China's state-run television and in a statement from the official New China News Agency. Mr. Zhu "was a senior official who accepted enormous bribes and showed grave dereliction in his job, thus creating massive economic losses for the state and his enterprise," the news agency said, adding, "The circumstances of his offense are grave, and its nature is despicable." By making such a public display of the case involving Mr. Zhu, Chinese officials appeared to be sending a message to the country's increasingly independent business executives, especially in the stumbling banking industry, that corruption would not be tolerated. The Communist Party also seemed intent on demonstrating that it will not accept corruption even as it is perceived as being deeply corrupted. The agency did not provide details of the alleged bribes or dereliction. But Everbright announced on Tuesday in Hong Kong, where its shares are now traded, that Chinese banking regulators and an internal audit had found accounting irregularities associated with a 1999 merger that Mr. Zhu championed and oversaw. The bank then admitted on Wednesday that it had evaded $58 million in taxes in merging with a smaller Chinese bank in 1999. Everbright is also struggling with loans that were issued in violation of prudent lending standards and have not been repaid. Like Wang Xuebing, who was dismissed on Jan. 11 from his post as president of the China Construction Bank, Mr. Zhu is a prot®¶g®¶ of Prime Minister Zhu Rongji. China's Communist Party leaders are wrapping up their annual summer retreat at the coastal resort of Beidahe, where they are believed to have been discussing when the current generation of leaders should retire and who should replace them. Zhu Rongji has been expected to step down as prime minister early next year, although it is not clear who would succeed him. He is part of an older generation of leaders, led by President Jiang Zemin, that is being encouraged to retire by younger Communist officials in their 40's and 50's but that still retains considerable support from provincial leaders and the military. Zhu Rongji's most prominent role has been as China's leading advocate of eliminating government bureaucracy and increasing the autonomy of state-owned and private enterprises from government control. There is no suggestion for the moment that he is being discredited as China moves toward a heavily orchestrated political transition. But concern has risen among Chinese officials about corruption in independent enterprises and about the stability of the country's financial system. Everbright's problems are the latest in a series of scandals over bank loans that were allegedly issued with little hope of their eventual repayment. Wang Xuebing lost his job as president of the China Construction Bank after Chinese and American regulators found evidence of abuses at the Bank of China while he was president there from 1993 to 1999 and when he ran the bank's New York office in the early 1990's. Chinese banks have a chronic problem with issuing improper loans. Standard & Poor's, the credit-rating agency, estimated in May that borrowers had either defaulted or were seriously in arrears on half of all loans. But banking experts here say that many bad loans are not the result of corruption so much as pressure on banks by provincial and sometimes even national officials to continue lending money to money-losing, state-owned enterprises that provide millions of jobs. Zhu Xiaohua is a former vice governor of China's central bank and a former director of the agency that administers China's $243 billion in foreign exchange reserves. When he was removed from the Everbright Bank in 1999, the Hong Kong news media initially reported that he was under investigation for his handling of the reserves, including whether some reserves had been improperly lent to Everbright after he changed jobs. One of Mr. Zhu's successors as director mysteriously fell to his death from the seventh floor of a Beijing hospital in 2000. But the New China News Agency only cited Mr. Zhu's tenure at Everbright in today's statement. Mr. Zhu had increased Everbright's activity in Hong Kong after becoming its president in 1996, and he was accused today of having done illegal deals in Hong Kong dollars. Mr. Zhu "exploited his post for his own personal gain and accepted massive bribes worth several million Hong Kong dollars," the news agency said, adding that, "he also violated regulations by personally deciding on and approving loans of hundreds of millions of Hong Kong dollars to others, thus creating huge economic losses." One American dollar equals 7.8 Hong Kong dollars. The ministry of finance said here today that Everbright itself remained financially stable despite the losses. The news agency said today that Mr. Zhu had been expelled from the Communist Party and that his case had been handed over to prosecutors for criminal charges after an investigation by the anticorruption units of the Communist Party and the central government. He is believed to be in Beijing's special prison for senior officials, and neither he nor Mr. Wang could be reached for comment. China routinely imposes the death penalty on low-level officials convicted of corruption. More senior officials tend to be treated less severely, however. In a possible sign of embarrassment about the latest financial scandal, the news agency posted its report on the Chinese-language version of its service but not on the English-language service. China's Ministry of Finance has been pushing banks to clean up their balance sheets and reputations so that they can raise money by selling shares on international stock markets. The Bank of China raised $2.5 billion on July 25 in Hong Kong with an initial public offering of shares in its Hong Kong subsidiary. The scandal at Everbright is especially embarrassing because it used to be a showcase bank for this country. The Asian Development Bank, a multilateral lending institution like the World Bank but independent of it, bought a large stake in Everbright five years ago and provided money for the latest computers, financial software and training. (by Keith Bradsher)

From http://www.nytimes.com/ 08/16/2002

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Senior Bank Official Jailed for 16 Years

Wu Fuwu, former president of the Bank of China (BOC) Anhui Branch, has been sentenced to 16 years in prison for misuse of public funds and for improperly providing foreign exchange (Forex) guarantees. The Intermediate People's Court of Hefei city, the capital of Anhui province in east China, delivered the verdict last Monday. The court investigation revealed that Wu obtained a loan of 20 million yuan (1.2 million US dollars) in 1997 from the Luzhou Credit Cooperative in the name of the Yintong Corporation, a firm affiliated with the BOC Anhui branch. In accordance with Wu's directives, the loan was subsequently transferred to a businessman identified as Li by Liu Xiaogong, chairman of the Yintong Corporation. Two million yuan (240,000 US dollars) of that money was retained by Liu. The court said in its verdict that the loan was part of the 150 million yuan (some 18 million US dollars) that Wu had promised to raise for the opening of a bank in Macao by Li and himself. The two had agreed to open the bank, when Wu told Li in 1995 that he would like to stay in the banking sector after his retirement. They agreed then that Li would be responsible for obtaining the essential authorizations for the establishment of the bank, while Wu pledged that he would raise 150 million yuan for the planned bank. The court also found Wu guilty of illegally offering Forex guarantees to overseas companies owned by the branch between 1992 and 1997, resulting in a financial loss of more than 5.3 million US dollars to the bank. Liu Xiaogong was sentenced to life imprisonment for embezzling public funds. Both Wu and Liu have said that they would appeal the court's verdict.

From http://www1.chinadaily.com.cn/ 08/19/2002

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Slow Political Reform A Threat to China's Economy: Analysts

PUT aside worries about broken banks, rising public debt and the fall-out of faltering US growth: a much greater risk to China's economy, analysts in Beijing say, lies in the slow pace of political reform.The gravity of the bad loan problem is not in dispute. And a double-dip recession in the United States would stall the rapid export growth that has made China, yet again, Asia's star economic performer this year.But in the long term, analysts and diplomats say China's prospects hinge on whether a new generation of leaders due to take the reins in coming months is willing to cement the transition to a market economy by enacting reforms that are first and foremost political in nature.Not only will China's economic efficiency suffer in the absence of such reforms, these people say, but the social strains that have sparked periodic labour unrest can only intensify.'We have problems of economic structural adjustment, but every country has those problems and, relatively speaking, China's are not the worst. I think political reform is more important and that's where we're very much lagging behind,' said Mao Yushi, director of Beijing's Unirule Institute of Economics.'What I mean is that we have a broadening income gap, we have abuse of power, violation of human rights; these kinds of things become the source of social unrest,' Mr Mao said. 'The real threat to China is social instability, which is a political problem.'In advocating political reform, Mr Mao and others are not questioning the Communist Party's absolute power. Moreover, there is a solid consensus in China behind the need to continue along the path of market-orientated reforms.'Right now, from a historical development point of view, China needs a strong central government,' said Li Yushi, vice-president of the foreign trade ministry's think-tank.But advocates of change say the power should be wielded differently. Taxes should be levied under the rule of law and not at the whim of corrupt, unaccountable officials; workers and investors in state-owned enterprises (SOEs) should be protected from asset-stripping by well-connected managers.'China needs a transparency revolution, a sunshine revolution,' said Tsinghua University professor Hu Angang.Prof Hu estimated the economic losses from corruption and abuse of power at a staggering 14.5 per cent of GDP a year. China's inequality gap was widening as a result, and below the economy's prosperous surface was a 'striking instability' that China's new leaders must tackle with broad institutional changes, Prof Hu said.The Communist Party is well aware of the danger that popular disgust at corruption poses to its legitimacy. Last week it said it had kicked a prominent banker out of the party for taking bribes when he was head of Everbright Bank, China's sixth-largest commercial bank.Cracking down on crooks and tax dodgers is one thing, but dismantling the levers of party control is another.What concerns many analysts is that China's economy will underperform because its Communist leaders, despite their avid embrace of the market disciplines ushered in by accession to the World Trade Organization, will tilt too much towards protecting their vested interests.Take the central issue of overhauling China's thousands of state-owned enterprises. Most of them are drowning in red ink, but they are a valuable source of power and patronage.'People realise more and more that SOE reform is not only about enterprises. It's about the government, it's about power, it's about the control of financial resources and assets,' said Fan Gang, director of the National Economic Research Institute.China's leaders are in fact debating a plan to modernise the party by opening its doors to private entrepreneurs. That could be incorporated into the party constitution at a five-yearly congress later this year at which Jiang Zemin is expected to step down as party chief along with other senior leaders.

From http://business-times.asia1.com.sg/ 08/19/2002

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Rural Elections Strengthen Grassroots Governance

China's 15-year-old direct election of village committees have served as a growth point in the country's political democracy process despite its imperfections, mainland legal experts have said. "The direct elections have consolidated the management of grassroots democracy and thus strengthened the legitimacy of grassroots governance," said Huang Weiping, a researcher with the Beijing Unirule Institute of Economics. The researcher said the development of local democracy will finally lead to calls for high-level political democracy. "In that sense, the grassroots direct elections may lay a solid foundation for gradual introduction of a general election from the bottom up," Huang said. China started direct elections of village committees in 1998, one year after enacting the Organic Law of Village Committees. So far, elections have been held in about 732,000 villages. Huang said the significance of the direct elections, is that it has, for the first time, introduced the concept of democratic election in grassroots politics. The researcher believes that the elections will open up room for continuously perfecting China's democratic election system. However, Yang Haikun, a law professor with Suzhou University, said the rural direct election system still faces severe challenges. ?In a number of villages, especially remote ones, the existence and influence of clans sometimes has interfered with the normal operation of the direct election system. ?Supervision over newly-elected village committees has yet to be strengthened to enhance efficiency of rural autonomy. ?The tenure of a village committee term should be expanded to five years from the current three so that the grassroots committees can be more stable. Despite these shortcomings, the system has been widely hailed by more than 800 million farmers in tens of thousands of villages, which constitute a major part of Chinese society and the base of stability. Since the founding of the People's Republic of China in 1949, the country has gone through a difficult period in working out a system of grass-roots democracy. In 1978, China replaced the people's commune system with the village committee system which lets villagers run their own affairs. The village committees, the most widespread grass-roots organization in Chinese rural areas, govern the most important elements in daily life and production, including agriculture, housing and land. The land-focused reform in rural areas, which started in the late 1970s, has lifted impoverished villages. The interests of farmers remain one of the principal concerns of the Chinese Government. China initiated a direct election trial for village heads in 1988 to replace the former practice of official appointments to better reflect the will of the rural population. Three quarters of China's 730,000 village committees have been through their first elections since the Organic Law of Village Committees was enforced in 1998. The last six provinces and municipalities, including Beijing, held their first elections by the end of 2001. The first round of direct elections is still in its pilot stage, said Wang Jinhua, an official in charge of village elections with the Ministry of Civil Affairs. "We need to gain more experience." he said. "As farmers are relatively less educated in China, it is understandable that some people might not know what to do." Wang also noted that some of the problems encountered in the initial stages have been solved as more farmers become familiar with the process of democracy. The head of a village is also a manager of the collective property of the village. He or she has an important say in what to plant and whether a business should be opened, which directly influences the income of villagers. Farmers nickname the direct election as "hai xuan" - literally meaning "sea election" - to suggest a wide choice among candidates while some scholars have jokingly compare the rural election with the presidential election held in the United States. Grassroots elections adopt widely-recognized standards such as secret ballot and vote counting under public supervision. Chinese farmers, who have become richer since the country started opening up to the outside world in 1978, have shown great enthusiasm for the political rights they have been given. In many areas, more than 95 per cent of farmers participate in the village election.

From http://www1.chinadaily.com.cn/ 08/20/2002

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National Certification Board Set Up

A national body for the approval of organizations offering certification services was set up in Beijing on August 20. Officials described the establishment of the China National Accreditation Board for Conformity Assessment as a milestone, indicating the nation had finished its unified certification system. "It is another achievement in providing product certifications following China's entry to the World Trade Organization (WTO)," said Wang Fengqing, director of the China National Regulatory Commission for Certification and Accreditation. He was speaking at a ceremony to mark the birth of the Beijing-based board. The commission was the watchdog authorized by the central government to supervise certification in the market. The newly established board is authorized to issue licences to those organizations qualified to conduct certification, training and national accreditation for laboratories. The board is also in charge of daily activities of China National Accreditation Board for Laboratories, China National Accreditation Board for Certification Agents and China National Auditor and Training Accreditation Board. In recent years, China has worked hard to unify its separate quality authentication systems and improve efficiency for domestic and foreign enterprises in this regard. "This shows that China is acting in accordance with international practices and we will keep our promise that China would observe WTO rules after it became a member," Wang said. There were previously two sets of quality authentication systems in China - one was established by the former State Administration for Quality and Technology Supervision, while the former State Administration for Exit-Entry Inspection and Quarantine ran the other. The two systems overlapped with each other in many aspects, and each did not admit those enterprises that have been passed by the other. This caused a great inconvenience to enterprises, especially those dealing in both the domestic market and foreign trade. The two systems carried different national quality standards, which has led to complaints of discrimination from overseas businesses. In August 2000, the State Council pushed for these two independent quality supervision authorities and the quarantine authority to become the ministerial-level State General Administration for Quality Supervision and Inspection and Quarantine. This paved the way for the merger of the two systems. The China National Regulatory Commission for Certification and Accreditation established last year is also an important step for China's certification reform. Wang required the newly established board to keep in line with international practices and make contributions to product quality control and the promotion of international trade.

From http://ce.cei.gov.cn/ 08/22/2002

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Struggling HK Turns to Its Civil Servants for Answers

A four-day civil service brain fest has been urged to find ways in which the territory's government can become world-class FOURTEEN thousand Hong kong senior civil servants are combining their brainpower at a forum to find solutions to the territory's many pressing problems, including large budget deficits and the government's battered image. The Hong kong government had told its 180,000-strong civil service to do some soul-searching at the event and offer ideas on the changes the territory must undertake to meet its challenges. The HK$5-million (S$1.1-million) forum, with the upbeat title of 'A World-class Government for Asia's World City', is also being seen as a way to lift civil servants' morale, which has been hit by pay cuts and job-loss fears. To cater for the numbers, the forum comprises eight half-day sessions over four days. Each civil servant attends one session. Participants, divided into groups of 10, are examining issues including Hong kong's competitiveness and how the civil service should be reorganised. Cities being used as benchmarks for Hong kong include Singapore, Tokyo, London, New York and Shanghai. The civil servants have also heard criticism of themselves over their lack of efficiency compared to the private sector and the lack of coordination among departments. The forum asks participants to examine the qualities needed for a world-class government, including ethics, finances and value for money. Chief Secretary Donald Tsang told the forum: ' The days of mass production in policy-making are over. Quality is the key to durable success. 'The event is being held at a time of growing dissatisfaction with the government's performance. A survey by the Home Affairs Bureau showed that only 30 per cent of people were satisfied with the government. A front-line civil servant who attended the morning session yesterday told The Straits Times: 'The forum is good for civil servants to update themselves about the world and how they are seen. 'But it does not benefit everyone. Those of us who deal with the public are aware of what is happening, and there is not much more that we can do. What we can do, we have already done.' He said his group had asked what the government had done in the five years since the 1997 handover that had won public appreciation. While some participants branded the forum as a show, others complained that the three-hour sessions did not allow enough time for debate. Mr Colin San key, head of the government's efficiency unit, said department heads would be asked later to forward ideas for improvement. His deputy, Ms Grace Pun, said the forum would foster understanding. 'So that when we decide on changes, the changes will be accepted more readily,' she said.

From http://straitstimes.asia1.com.sg/ 08/27/2002

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Japan: Suzuki Rearrested in Growing Bribery Case

Lower House member Muneo Suzuki was rearrested Thursday on suspicion of accepting bribes from a Hokkaido construction company while serving as director-general of the Hokkaido Development Agency. Suzuki has already been indicted on another bribery charge in connection with a Hokkaido logging company. Prosecutors suspect Suzuki received a total of 6 million yen from Shimada Kensetsu of Abashiri, Hokkaido, between September 1997 and July 1998. Company President Mitsuo Shimada visited Suzuki at his agency office and informed him about the projects in Hokkaido that his company wanted to win contracts for, sources said. Prosecutors believe Shimada asked Suzuki to intervene with the Hokkaido Development Bureau to allow his company to win contracts in Kushiro, Rumoi and Obihiro. The company had done little work in those districts before Shimada approached Suzuki. Prosecutors also arrested Suzuki's aide, Jun Tada, on suspicion of serving as a co-conspirator. Sources said that Shimada Kensetsu officials actually gave the bribes to Tada, who accepted the money on behalf of Suzuki. Sources close to Shimada Kensetsu admitted that the company's ties to Suzuki helped the firm rapidly increase the number of contracts from the Hokkaido Development Bureau. According to records filed with the bureau, Shimada Kensetsu won a total of six projects worth 2.28 billion yen in fiscal 1996. However, the following fiscal year, when Suzuki was appointed director-general of the Hokkaido Development Agency, Shimada Kensetsu was awarded 12 projects worth a total of 3.665 billion yen.

From http://www.asahi.com/ 08/02/2002

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Japan: PM Koizumi Pushes Tax Reform Bill

Prime Minister Junichiro Koizumi on Tuesday ordered his key policy-setting panel to draw up a draft bill featuring tax cuts worth more than 1 trillion yen and future tax hikes aimed at offsetting revenue shortfalls. Koizumi issued the order at a meeting of the Council on Economic and Fiscal Policy, according to Heizo Takenaka, state minister in charge of economic and fiscal policy. The 11-member panel, which Koizumi chairs, includes economics ministers and members of the private sector. "I want to promote specific reforms of the tax system, including implementing tax cuts worth more than 1 trillion yen, while maintaining fiscal discipline by achieving tax revenue neutrality not on a single-year basis but a multiyear basis," Takenaka quoted Koizumi as saying. Legislation for the tax cuts is expected to be submitted to the Diet during the next ordinary session, which is scheduled to start in January, government officials said. Koizumi first floated the idea of slashing tax burdens by that amount in late July, but at the time did not mention specific steps to make that possible. With Tuesday's directive, the focus shifts to the actual size of the tax reduction, which taxes will be cut, and the time span for the cuts and future tax hikes to fund them. Asked by reporters how much over the 1 trillion yen mark he has in mind for the tax reduction, the premier only said, "That is up to later discussions." Asked if he has any plan for the time span for achieving tax neutrality, Koizumi said, "That will also be discussed by people in the context of tax reforms." Ways to fund the tax cuts in particular could be a point of contention between members of the council, the government's top economic policy-setting panel, and the Finance Ministry. Members of the key economic panel say that a natural revenue increase resulting from a future economic recovery should be taken into account. That idea is opposed the Finance Ministry, which says such a rise in revenue is far from secure. Japan will have to compile a supplementary budget for fiscal 2002 to shore up its weak economy if the U.S. economic situation worsens, the ruling Liberal Democratic Party's top policy expert said Tuesday. "We will not be able to counter (the anemic state of the economy) unless we compile a supplementary budget . . . in the event the U.S. economy deteriorates further," said Taro Aso, chairman of the LDP Policy Research Council. Aso was apparently referring to the possibility that Washington may pressure Japan into boosting domestic demand, given Japanese exporters' heavy reliance on American consumers. The U.S. is the largest market for Japanese exports such as automobiles and electronics. "I expect (Japanese) small and midsize companies and very small businesses will face more pressure down the road," Aso said. Asked about the recent changes in Prime Minister Junichiro Koizumi's stance on the economy, Aso said, "He appears to have realized that things are not as simple as just implementing structural reforms to revive the economy, and that structural reforms alone would be ineffective. "I have the impression he is changing his ideas on various aspects."

From http://www.japantimes.co.jp/ 08/07/2002

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Shiokawa Pushes Tax-Cut Plan

Finance Minister Masajuro Shiokawa said Wednesday he wants to introduce tax cuts over three years and offset expected revenue shortfalls with tax hikes over five years. Shiokawa suggested the size of the tax cuts would be somewhere between 1 trillion yen and 2 trillion yen. He said the tax cuts and tax hikes should begin at the same time, but emphasis should be on implementing the tax breaks first. "A balance should be achieved over five years," he said. Chief Cabinet Secretary Yasuo Fukuda said the same day that proposed tax cuts could include permanent reductions as well as limited-period cuts. "There may be cuts based on a policy to stimulate the economy, but we would like to consider some permanent cuts (through revisions of tax rates) as well," he told a separate news conference. Fukuda did not elaborate, simply saying, "Tax cuts are possible in many forms. We will discuss them from now on." Earlier this week, Prime Minister Junichiro Koizumi instructed the Council on Economic and Fiscal Policy to draw up a plan for tax cuts and tax hikes, keeping the level of tax revenues on a multiple-year basis. Details of the proposed tax measures, including tax items and terms for tax measures, remain to be worked out. Shiokawa also said the issue should be examined by the Tax Commission, which advises the prime minister. The tax issue came to the fore in the wake of a series of accounting failures in the United States that affected stock prices and threaten to damage Japan's fragile economic recovery. Prime Minister Junichiro Koizumi's Cabinet on Wednesday approved the guidelines of a belt-tightening budget for fiscal 2003 that caps budget requests at 48.1 trillion yen. The budget features a 3 percent cut in public works spending and a 2 percent reduction in discretionary outlays, such as foreign aid. The guidelines for fiscal 2003 represent a continuation of the fiscal reforms that started in fiscal 2001 and will serve as the basis for compiling the budget later this year. Ministries and agencies must submit their budgetary requests by the end of August. Public understanding of reforms has deepened, Finance Minister Masajuro Shiokawa said. "The guidelines continue to be strict" on spending," he said. "We could form the budget framework without much resistance. So I think the public understanding of the reforms has deepened." Although the guidelines set a 48.1 trillion yen ceiling on general expenditures, which covers key government operations, the government will try to slash that to the fiscal 2002 level of 47.5 trillion yen or "effectively lower" during the compilation process to maintain fiscal discipline. The guidelines set a 9 trillion yen ceiling on requests for public investment, which is mostly public works. Although this is roughly a 3 percent drop from the 9.3 trillion yen set in fiscal 2002, it is only a modest reduction compared with the 10 percent cut implemented in fiscal 2002. Shiokawa said that the modest cut is a consequence of the current economic climate, because spending on public work projects helps buoy the economy when private-sector demand is stagnant. "I wanted to cut (public investment spending) by more (than 3 percent). However, we made a decision to revitalize the economy," Shiokawa said. The budgetary guidelines set a ceiling of 5.4 trillion yen on discretionary spending, which covers policy-related expenditures, or 2 percent down from the amount earmarked in fiscal 2002. Mandatory expenditures, which include pension benefits and personnel costs, will be limited to 33.7 trillion yen, up about 920 billion yen from the initial fiscal 2002 budget. Although spending in that category grew along with the rapidly aging population, the ministry will attempt to limit any further rise by shaving future payments for pensions and other social service spending in line with Japan's chronic deflation. In recent years, the ministry has refused to reflect rising or falling prices in such spending.

From http://www.japantimes.co.jp/ 08/08/2002

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National Servants Looking at 2.03% Reduction in Wages

The National Personnel Authority recommended Thursday that the Diet and Cabinet introduce a 2.03 percent cut in monthly wages for national government employees for the current fiscal year. It is the first time for the authority to recommend a wage cut since the current pay recommendation system started in 1948. The move is aimed at keeping salaries in line with the shrinking wages in the private sector, but critics fear this could fuel a vicious cycle. The panel has recommended that national civil servants receive annual wages lower than they did in the past fiscal year, as the rate cut was above the 1.66 percent regular wage hike. The government is expected to follow through on the recommendation as many government officials and members of the ruling coalition have been calling for bureaucrat salary cuts in a bid to reduce fiscal spending. The personnel authority wants core salaries, bonuses and performance-based pay subject to cuts. Bonuses and performance pay have been subject to cuts since 1999. The bonuses and performance-based pay of national government employees would be reduced to 4.65 months from the current 4.7 months. The cut in total annual salary would average about 150,000 yen. The core salary would decrease by 2 percent for administrative positions and by 2.1 percent for senior positions, while spousal allowances would be reduced by 2,000 yen to 14,000 yen. The Finance Ministry said the reduction would cut government costs by 241 billion yen. It is considered a certainty that any cut in national bureaucrats' pay will also lead to salary reductions for local government employees. If local civil servant pay is reduced in line with the recommendation, local governments would save a combined 452 billion yen. The authority said it will set up a study group to review the wages of national government employees assigned to local governments and local bureaus, because their wages appear much too high compared with those of private-sector employees.

From http://www.japantimes.co.jp/ 08/09/2002

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Public Projects Use Money Like Water

A multibillion-yen irrigation complex in one of the wettest regions in Japan? Why? wonders Yomiuri Weekly. Certainly there's no water shortage on Yakushima, a tiny island south of Kyushu.Rain clouds with nowhere to go, hemmed in by the two tallest peaks in southern Japan, dump anywhere from 3,500 to 10,000 ml of rain on soil whose fecundity is symbolized by its famous Jomon cedars, thousands of years old and tens of meters high. Regardless, the six-year farm ministry project got underway in 1999 and is now in full swing, construction workers outnumbering the farmers who supposedly stand to benefit, Yomiuri Weekly says. Yakushima -- 25 km in diameter, population 14,000 -- is a little "public- works heaven." No cars pollute its mountain roads and no fishing boats disturb the tranquility of its fishing port. Anglers use the port instead, and with happy results, they say. By the time the irrigation project is completed in 2005, it will have laid 90 km of pipe at an estimated cost of 3.2 billion yen. And then what? It is true, Yomiuri Weekly concedes, that despite the abundant rainfall there are places on the island that at times require water to be trucked in from nearby rivers, so an irrigation network may not be quite as frivolous as it sounds. On the other hand, agriculture is less and less a thriving concern. Paddies and fields lie abandoned, untended by aging residents whose progeny has migrated in search of brighter prospects. Typical in that regard is Hisa Hidaka (a pseudonym). "I haven't farmed my paddies in years," says the 81-year-old pensioner. Her husband died a decade ago and five of her six children live elsewhere. "That's why I'm against the project," she says. "They can lay the pipes, but who's going to work the land?" That's exactly why something must be done, counters the farm ministry. Abandoned family farms, it says, must be reconditioned and made ready for large-scale agriculture. There's a certain logic there too, Yomiuri Weekly admits -- though it seems a shame that Hidaka, whose property will be "improved" by the project whether she likes it or not, is subject to a 1 million yen levy as a supposed beneficiary. What, demands the magazine, is in it for her? Japan's public works have long been under fire for having nothing in them for anyone except the construction industry and its political sponsors. The wasteful spending they entail bloats the public debt, and the psychological dependence they breed on government-backed construction stifles more competitive and useful economic activity. The Yakushima irrigation plan is based on the 1949 Land Improvement Act, a law worded so judiciously, Yomiuri Weekly remarks, that it almost seems to anticipate the present economic crisis. The act requires that each project yield demonstrable value for the money spent on it, and sets its standards so strictly and specifically -- or seems to -- that an observer not driven to weary cynicism by one revelation after another of malfeasance in high places might well conclude that this piece of legislation has no nonsense about it. And yet an irrigation network for a sparsely populated island where giant cedars grow apparently met its standards. How? Simple. The figures are cooked, Yomiuri Weekly hears from two sources. One is Tatsuji Senda, a local farmer and citizens' group director who claims the farm ministry, in its calculations, substantially exaggerated the present and future yield of the island's agriculture. The other is professor Goei Satoue of the Osaka University of Economics. Satoue worked at the ministry for about 10 years. He speaks from experience. "There is hardly a single project," he says, "that is as cost-efficient as it is made out to be." (by Michael Hoffman)

From http://www.japantimes.co.jp/ 08/11/2002

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Tax Commission Head Skeptical of Koizumi Tax Cuts

While Prime Minister Junichiro Koizumi is gearing up for tax cuts he hopes will boost the fragile economy, the head of his advisory panel is not shy about expressing skepticism about their effectiveness.Because of the modest size of the proposed tax cuts, along with the knowledge that hikes to other taxes will follow, taxpayers will probably repay debts or pad their savings with money from the cuts instead of spending and investing more, according to Hiromitsu Ishi, head of the Tax Commission. "I don't believe tax cuts are a very effective way to (stimulate) the country's economy," said Ishi, president of Hitotsubashi University. "The method of relying on tax cuts has almost reached its limits." Earlier this month, Koizumi announced that the government will introduce more than 1 trillion yen in tax breaks that would be targeted at businesses beginning in fiscal 2003. At the same time, Koizumi made clear that the tax cuts should be followed by tax hikes to offset subsequent revenue shortfalls on a multiple-year basis. Although no formal decision has been made on the tax reduction, it is likely to be smaller than the tax cuts of the late 1990s because the government cannot afford big revenue reductions anymore, Ishi said. Finance Minister Masajuro Shiokawa recently floated the idea that the tax cuts should be somewhere between 1 trillion yen and 2 trillion yen. That is less than the tax cuts implemented in fiscal 1998 and 1999, which amounted to 4.5 trillion yen for companies and 4.1 trillion yen for individuals. Despite this 8.6 trillion yen cash injection, the economy continued to falter. Ishi said one of a few tax options that might stimulate the economy would be to lighten the tax burden for firms that invest in research and development or purchase facilities and equipment. This method could help promote corporate spending, and could also benefit a wide range of companies, regardless of whether they are profitable, Ishi said. In contrast, reducing the corporate tax -- an idea advocated by some members of the Council on Economic and Fiscal Policy, another government panel -- would benefit only profitable firms since the tax is levied only on profitable companies, Ishi said. "I wouldn't recommend lowering the corporate tax rate," Ishi said, noting that only about 30 percent of the country's companies currently pay corporate taxes. But any tax cut will only be the first chapter in a major overhaul of the tax code that Koizumi envisions as part of his structural reform agenda. In this regard, Ishi points out, there is little room to maneuver, as the graying population and public sector debt of more than 670 trillion yen weigh on budget writers. The principal role of the Tax Commission, therefore, is to draw the blueprint for a future tax system that is sustainable and can support the country's fiscal system. The commission tends to fall in line with the austerity-minded Finance Ministry since its secretariat job is handled by ministry officials. In June, the commission came up with an interim report on the future tax system that calls for simplification and tax hikes. Ishi views the tax revision for fiscal 2003 as the "forerunner" of the long-term reform. For fiscal 2003, Koizumi has instructed the commission to examine five major issues. They include the review of the existing income tax deductions for spouses, which have considerably lowered the income tax threshold, and the introduction of a pro forma standard tax, a local corporate tax that would be imposed even on deficit-running firms. Ishi said the existing tax system does not suit present social and economic realities, such as the aging population and the increasing role of women in society. For instance, the individual income tax is based on the idea that the typical family has one income earner -- the husband -- despite an increasing number of working women. Another problem arises from the "hollowing out" of the tax system, he said. "The existing tax system has many holes because of too many tax-cut measures in the past." He warns that unless these holes are plugged, the country will be left with few options. Ishi claimed that the public appears to be gradually accepting the need for an increased tax burden in exchange for spending cuts by the government and further administrative reforms. "Few people demand tax cuts alone," he said of a recent public hearing on the tax system. "I think the public is aware that the country cannot afford tax cuts any longer." So he writes off short-term tax measures, including the proposed 1 trillion yen in tax cuts. But he's not confident his reasoning will prevail. "Politicians turn a deaf ear to opinions (in favor of tax hikes) and believe that it is their duty to offer tax cuts." (by Sachiko Hirao)

From http://www.japantimes.co.jp/ 08/15/2002

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Koizumi's Sputtering Reforms Seen Ensuring More Strife for Japan

TOKYO -- Japanese Prime Minister Junichiro Koizumi's promises of far-reaching structural reforms have come to little, leaving the recession-weary economy vulnerable to further shocks, analysts said. "The Koizumi reforms are a bit of a sham," said Credit Suisse First Boston (CSFB) senior economist Christopher Walker. "It is a serious disappointment." The shaggy-haired premier charged into power 16 months ago promising painful structural reforms to lift the nation out of a decade in the doldrums. But each step of the way, his plans have hit a wall of resistance from the old guard of his ruling Liberal Democratic Party (LDP) whose vested interests benefit from the current system. Koizumi has promised to bulldoze a mountain of non performing loans held by Japanese banks within two to three years, cap new government bond issues to rein in ballooning government debt and slash pork-barrel public works projects. Several public corporations were also earmarked for privatization. One, the postal service, had been at the top of Koizumi's personal political agenda for years before he took over the leadership. Despite the rhetoric, little has been delivered and it is only thanks to a recovery in exports that the economy is tentatively starting to stir. "Consensus expects a recovery later this year, but a rise in the yen and weaker stock prices as well as slow growth in the United States have put a downside risk on the economy and that is effecting government policy," cautioned Shuji Shirota, an economist at Dresdner Kleinwort Wasserstein. Koizumi appears inclined to give way on his original reform agenda by reverting to the wasteful spending policies and muddle-along approach of past administrations, AFP quoted economists as saying. The premier has already watered down promises to rid Japanese banks of bad loans, commonly cited as a central cause of the country's decade long malaise. The embattled premier has also said he may break a 30 trillion yen ($250 billion) limit on new government bond issues in the next budget year. More bonds are likely to be needed to plug a yawning gap between falling government revenue -- aggravated by promised tax cuts -- and plans for higher spending. Even a pledge to reduce wasteful public works projects -- Japan is strewn with bridges to nowhere and near empty rural highways -- has been watered down under a budget framework approved by the cabinet last week. "The first plan was to cut public works spending by 10 percent but now the cut is only three percent that is a big shift in fiscal policy," said Shirota. Koizumi has convinced the government to devise legislation to open up Japan's lucrative mail business to the private sector after 130 years of state control. But critics say the victory is virtually meaningless. The stringent conditions laid down for private-sector entrants -- such as setting up vast networks of letter boxes -- mean there is likely to be little change to the status quo. Such compromises mean "it is hard now to distinguish his administration from other LDP administrations," said CSFB's Walker. Without fundamental structural reforms this recovery -- like three others seen since Japan's economic bubble burst in 1990 -- is likely to be short-lived. The most vital step is to help restore the banking sector to health by injecting another round of public funds to help them write off bad loans, said Paul Sheard, Lehman Brothers' chief economist for Asia. Non-performing loans (NPLS) at Japanese banks have snowballed to a record 43.2 trillion yen, according to the latest official figures, despite increased write-offs. "The NPLS can only be purged from the system by an injection of money into the banking system in a substantial scale," said Sheard. "The frameworks exist to do this but unfortunately the political will and policy coordination has been lacking." Koizumi has maintained the banks will only get more money if there is a financial crisis but economists argue this would condemn japan to more years of economic drift. "We can expect the same sort of Kabuki (traditional Japanese) theatre coming up next year," said Walker.

From http://www.tehrantimes.com/ 08/19/2002

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Govt Faces Calls to Cut Subsidy System

While Prime Minister Junichiro Koizumi intends to reduce national expenditures by making significant cuts in central government subsidies currently being paid to local governments, central government ministries and agencies oppose abolishing the subsidy system itself, agreeing only to minor cuts in subsidies to local governments. According to the government, subsidies given to local governments by the central government through its ministries and agencies now total approximately 13 trillion yen annually. As the government expects to cut this sum by at least several trillion yen by fiscal 2006, Prime Minister Koizumi in July directed seven Cabinet ministers, including Construction and Transport Minister Chikage Ogi and Education, Science and Technology Minister Atsuko Toyama, to review their government-subsidized public works projects and education and welfare programs. Koizumi further intends to hammer out specific policies to discontinue the national government's subsidy program in a report to be issued in October by the Council for Decentralization Reform. "The prime minister is considering abolishing a majority of the current subsidy programs. By turning them into funds for general purposes, he intends to reconstruct the national economy and promote local autonomy at the same time," said an aide close to the prime minister. However, his determination has aroused tension and opposition from the government ministries and agencies in charge of specific subsidized programs and projects. Cuts in government subsidies would mean their power over local entities and their public programs would decline, and bureaucrats are loath to relinquish their interests. For example, half of the salaries of public primary and middle school teachers are paid by the national government, at a cost of 3 trillion yen a year. The Education, Science and Technology Ministry opposes decreasing this particular budget, insisting it would be impossible for financial reasons. Some ministry officials are not entirely opposed to the prime minister, saying they are willing to cooperate with his political crusade for structural reforms. These officials propose asking the Finance Ministry to reduce their annual subsidies by 10 to 20 percent for next fiscal year's budget by reducing the number of public school teachers and having local governments finance teachers' pension funds. The Health, Labor and Welfare Ministry, which is in charge of handing out national and local social welfare subsidies, says it does not support changing the current system as it recently completed reforms of the national pension and medical programs. Officials of the ministry say they are unlikely to touch home nursing care for the aged and disabled, welfare for the economically underprivileged and the child allowance because of humanitarian considerations. But they are willing to cooperate with the national government by reducing subsidies for the national employment insurance system, planning to request an increase of only 65 billion yen for the next fiscal budget, instead of the initially planned request for an increase of 115 billion yen from the national government. The Transport Ministry and the Agriculture, Forestry and Fisheries Ministry also agree that as it has already been agreed that there will be 3 percent cuts in expenses for public works projects in next fiscal year's budget request, they see no need to go as far as reviewing the entire subsidy system.

From http://www.yomiuri.co.jp/ 08/20/2002

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Kan Announces Candidacy in DPJ Election

Naoto Kan, secretary general of the Democratic Party of Japan, on Monday announced his candidacy for the largest opposition party's election next month. "After exchanging views with different people, I have ultimately taken a firm resolve to run in the leadership election," Kan told a news conference in the Diet building. "If I become party head, I will work to present the advantages of the DPJ to the people and what reforms we can achieve, unlike the (ruling) Liberal Democratic Party." He also said the DPJ's incumbent chief, Yukio Hatoyama, is not the kind of politician who fights relentlessly to persuade people but rather exerts himself on the basis of ideals, and is not particularly strong in debates between party leaders. Kan, 55, has just returned from a visit to the United States at the invitation of the Center for Strategic and International Studies, a think tank in Washington. He headed the DPJ from April 1998 until losing to Hatoyama, 55, in the September 1999 leadership election. At the time, Hatoyama was the DPJ's deputy secretary general. Speaking to reporters, Kan appraised the party's style of management as having gone a long way to build itself into a political party capable of taking the reins of government. He said he envisions the party's leadership election leading to the toppling of the present administration of Prime Minister Junichiro Koizumi, and to reform of the present political scene. The election, in which Kan will be up against other party heavyweights including Hatoyama and possibly younger members, is set for Sept. 23.

From http://www.japantimes.co.jp/ 08/20/2002

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Governors Split on National Education Role

Nearly half of the nation's governors see the need to rethink the current role of the national government in financing and controlling the compulsory education system, according to a recent Kyodo News survey. But at the same time, many of the governors in favor of reform have expressed concern over a possible decrease in financing of compulsory education in the future. The national government shoulders half of the salaries paid to teachers and clerical staff at public elementary schools and junior high schools to avoid regional income disparities, and earmarked about 3 trillion yen -- the largest such government subsidy -- for the system in the current fiscal year, which started in April. The survey was conducted on 46 governors, as the Nagano governorship has been vacant since the prefectural assembly passed a no-confidence motion in July against Yasuo Tanaka. Twenty-three governors said it is necessary to rethink the current burden of the national government in financing the nine-year compulsory education system or abolish it. Of these 23, 17 governors, including Hiroyuki Kodera of Gunma, agreed to rethink the system on condition that a source of revenue be ensured and the roles of the national and local governments are clarified. However, many of the 23, including Miyagi Gov. Shiro Asano, Saitama Gov. Yoshihiko Tsuchiya and Gifu Gov. Taku Kajiwara, criticized the national government's priority of slashing expenditures. Fourteen governors meanwhile said they hope the current system is maintained. Most of the governors evaluated the system in a positive light, but some asked for a drastic transfer of authority from the national to local governments in terms of organizing classes and compiling curriculum. Hiroshima Gov. Yuzan Fujita said the national government should shoulder all costs if it deems compulsory education one of its responsibilities. Earlier, Prime Minister Junichiro Koizumi instructed Atsuko Toyama, the minister of education, culture, sports, science and technology, to map out a review of the system in a bid to reduce national government involvement in the education burden. Although the government plans to have the Economic and Fiscal Policy Council carry out the review at the end of this month, it is unclear if local governments will support its recommendations.

From http://www.japantimes.co.jp/ 08/21/2002

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Reform of the Highway Corporations

A government panel discussing privatization plans for highway corporations has been meeting stiff resistance from a predictable source: the corporations themselves. They have held back some of the financial data requested by panel members, thus effectively blocking progress toward highway reform, a priority commitment of Prime Minister Junichiro Koizumi. The corporations have a duty to cooperate with the commission, a third-party body established by law to promote privatization of the Japan Highway Public Corp. and three other corporations that build and manage motorways across the country. Without the necessary reference data, the commission cannot begin to make an objective analysis, an essential precondition for making recommendations. The level of frustration among commission members increased recently when they openly demanded the resignation of JHPC President Haruho Fujii. The corporation has been criticized for refusing to produce, among other things, profit-and-loss figures for national expressways and other major toll roads -- data indispensable for an accurate review of the deficit-ridden highway system. The four highway corporations, including those in charge of expressways in the Tokyo metropolitan and Hanshin (Osaka and Kobe) areas as well as the Honshu-Shikoku bridge motorways, have a combined debt of 40 trillion yen. The debt is expected to be reduced gradually through privatization, a process that is likely to take years. Relevant data is also considered vital to the discussion of what to do with the existing 9,342-km highway construction program. Specifically, the question is whether to complete construction of the unfinished roads (2,400 km), freeze work for the time being or cancel it for good. These are critical questions. No wonder panel members, from the chairman on down, have been frustrated over the scarcity of cooperation. The crushing debt is essentially the result of poor management -- a problem common to government-funded corporations that have paid little attention to cost efficiency. The same problem, it should be remembered, forced the privatization of the Japanese National Railways, imposing a heavy burden on the taxpayer. If the tollway corporations keep piling up debts as JNR did, taxpayers may again end up picking the tab. The implications are far-reaching because government debt is already reaching crisis proportions. The trouble with public corporations in general, not just the highway corporations, is that their financial condition is not always transparent. This is because they do not use the same accounting rules that apply to private companies. That helps explain why their management tends to be loose. For starters, the highway corporations should begin disclosing as much financial data as possible in ways that approximate corporate accounting standards. There is also a case to be made for appointing private managers as heads of the highway corporations, just as a former shipbuilding magnate, Mr. Hisashi Shinto, was picked to head Nippon Telegraph and Telephone Public Corp. He later became president of the privatized NTT. By the same token, private appointments will help to smooth the transition of the road entities. The success of privatization depends largely on cost and debt reduction. These are hard times for public corporations as well. With public finance in a shambles, they can no longer take government largess for granted. Their public nature notwithstanding, profitability is now a key consideration. It will become an article of faith once they are put in private hands. To generate profits, of course, costs must be reduced and the quality of services improved. Meeting these basic requirements of private enterprise requires the insight and skill of private managers. This is hardly a task for retired bureaucrats who used to work in a world that had little or nothing to do with cost and efficiency. It makes sense, therefore, to reform public corporations under the aegis of highly experienced corporate executives -- those who have survived the rough and tumble competition in the world of business and who are staunchly committed to the principles of corporate management. In this sense, NTT privatization offers a useful example. Prime Minister Koizumi should continue to take the lead in highway reform. If a corporation's manager is not sufficiently willing to cooperate, he should appoint private managers if necessary, even before privatization begins. He can, and should, learn from the successful experience of JNR, where proreform managers were put in charge to push privatization.

From http://www.japantimes.co.jp/ 08/22/2002

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Govt to Launch Asian Patent Network

The Patent Office is to establish a computer network in spring that will enable patent authorities in Thailand, the Philippines and Vietnam to access information in English on the results of patent examinations made by the office, sources said Saturday. The Asia intellectual-property network will help developing Asian countries streamline their patent examination processes and promote the acquisition of international patents that will help strengthen the competitiveness of Japanese companies. After the initial network is established, it will be increased to encompass other member countries of the Association of Southeast Asian Nations. According to the sources, patent offices of networked countries will be able to browse data on the findings of patent examinations carried out by the Japan Patent Office. The results will be translated into English. Recently, the importance of intellectual property rights has been heightened internationally, as has the advisability of companies and researchers obtaining patents in Japan as well as other countries. This is particularly true in high-technology areas such as information technology and biotechnology. However, each country has a different patent system leading to a duplication of work in conducting patent searches. When the network is established, a Japanese company applying for a patent in networked countries for a product for which it already holds a patent in Japan, the patent authorities of the countries will be able to view the examination results by the Patent Office. This will streamline the work of other Asian patent offices. (by Yomiuri Shimbun)

From http://www.yomiuri.co.jp/ 08/26/2002

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Korea: Seoul City Hall Launches Mayor's Advisory Panel

Seoul City set a mayoral advisory panel in motion yesterday to help Mayor Lee Myung-bak run municipal affairs, city officials said. The 75-member 21st Century Commission, comprising professors, journalists, businessmen and civil activists, will provide the mayor advice on the administration of the municipality. "The panel will draw up a four-year basic plan that will serve as a beacon for the mayor's management of municipal affairs," the official said. Lee, who was sworn in as the top administrator of the nation's capital July 1, will be at the helm until his term expires in June 2006. The commission has nine subcommittees on such areas as reform of city administration, balanced development, environment, transportation, welfare, housing, and culture and tourism. After collecting opinions from the public and deliberating on Seoul's budget situation, the commission plans to come up with a blueprint for running municipal affairs, the official said.

From http://www.koreaherald.co.kr/ 08/01/2002

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Beijing's Jury Is Still Out on North Korean Reforms

SEOUL - Visiting Chinese Foreign Minister Tang Jiaxuan said here on Saturday that it has yet to be confirmed whether the limited economic-reform measures taken by North Korea of late are part of its efforts to accept a Chinese-style open economy system. Meeting Lee Hoi-chang, the presidential candidate of South Korea's opposition Grand National Party, Tang said Pyongyang has its own way of dealing with economic difficulties and that China's experience in economic reform cannot be applied 100 percent to North Korea's economic situation. "Although the reports are true that North Korean leader Kim Jong-il was deeply impressed during his recent visit to Shanghai, it is unclear how much this can affect the North," Tang noted. Though various reports have indicated North Korea has taken steps to reform its economy, including increasing prices and wages, the communist country has not officially confirmed such reports. Meanwhile, Lee criticized Seoul's policy toward North Korea, saying that when the North's economy deteriorated, it would have been better to seek long-term measures to change its economic structure. "Simply providing North Korea with materials is undesirable," he said. Lee stressed that positive South Korea-China relations are a prerequisite for stability on the Korean Peninsula as well as in Northeast Asia.

From http://www.atimes.com/ 08/06/2002

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Seoul Urged to Cut Agricultural Tariffs

The Cairns Group of 18 agricultural exporting countries and the U.S. have demanded that Korea reduce agricultural tariffs to below 25 percent. The proposal has shocked Korean farmers who are protected with tariffs of as high as 800 percent. Products currently subject to more than 100 percent tariffs include garlic, sweet potato, sesame, soybean, cayenne and others. The Ministry of Agriculture and Forestry (MAF) yesterday announced that the request was made during the recent bilateral and multilateral negotiations to liberalize the world's agricultural markets. The talks are part of the steps to liberalize both industrial, agricultural and service industries in line with the agreement at the meeting of the World Trade Organization in Doha, Qatar last November. During the negotiations, the food exporters suggested that the WTO adopt ``the Swiss Formula,'' in which every tariff is pulled down to below the 25 percent level. The formula was adopted during the Tokyo Round in 1973 for industrial products, but it is the first time the formula has been proposed for the agricultural sector. ``South Korea, Japan and the EU have opposed the suggestion, insisting that any sudden shift in trade policy could impact hard on farmers,'' said Lee Myung-soo, a MAF director general. Lee declined to predict how the negotiations would now unfold, but conceded that the majority of WTO members are currently backing the tariff reduction. It is hoped that an agreement on the issue is reached by next March. The countries opposing a steep cutback are holding fast to the stance that the tariff limit should be set at around 36 percent, the official said. The Cairns Group has also called for the imposition of tariffs based only on the price of imports, not their quantity. Under the current WTO regulations, importing countries can opt for either of the two systems, depending on the trade environment. ``Depending on the price of the produce, we can at present choose which system to adopt for our convenience. For example, if there flows a sizable amount of cheap produce from any particular country, we could impose a quantity-based tariff to levy a higher tariff, and at the same time defend our farming sector,'' said Vice MAF Minister Ahn Jong-wun. It is probable that the Cairns Group's request will prevail as most of the participants in negotiations support the price-grounded tariff. Battling the Cairns Group is South Korea, joined by the EU, Japan and Switzerland which are also concerned about any potential damage to their farming industries. The U.S. made the position that the WTO needs to choose one of the imposition systems. Washington is not particularly fussed over which one. But the U.S. stance is akin to that of the Cairns Group in that the country opposes the dual tariff system. Agricultural exporters are also demanding a wider opening of low-tariff quotas in each member country. Under the current WTO rules, importers can impose tariffs equivalent to the price gaps between the domestic and imported produce, with some exceptional amount for low tariff. While the Cairns Group has called for the immediate widening of the low-tariff quota, South Korea, Japan and the U.S. are for a more gradual opening. But the latter are in the minority at the negotiation tables, said another MAF official. The WTO is also discussing whether to lift the special safeguard that has been often used by the nation to stop the inflow of cheap foreign crops. ``As the negotiations are not going very favorably for us, we will increase cooperation with the Non-Trade Concern (NTC) Group, which consists of produce importers,'' said Lee. The negotiations for the liberalization of the world's agriculture markets will continue until next March, and then each member country should submit its implementation plan based on the outcomes before the fifth WTO ministerial meeting slated for late 2003. (by Kim Ki-tae)

From http://search.hankooki.com/ 08/06/2002

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S. Korean Opposition Wins Legislative Majority

SEOUL -- One day after the opposition took control of parliament in a by-election landslide, President Kim Dae Jung named the head of South Korea's largest business newspaper as prime minister, Kim's secretary said today. The appointment of Chang Dae Whan, president of the Maeil Business Newspaper, followed parliament's rejection last week of Kim's previous nominee, a university president who would have been the country's first female premier. The post of prime minister is largely ceremonial, but the premier would take over if the president died or was unable to carry out his or her duties. The nomination comes after the main opposition party gained a majority in the National Assembly, a rebuke for Kim's corruption-tinged government of during his final months in office. Candidates from the Grand National Party won 11 of the 13 contested parliamentary seats in Seoul and provincial districts, according to final results from the national election committee. The results were widely seen as a barometer for the presidential elections in December. Kim's five-year term ends in February, and the constitution bars him from running again. The opposition swept all seven seats contested in the capital and the surrounding province of Kyonggi.

From http://www.washingtonpost.com/ 08/08/2002

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GNP Wins Majority in Assembly Ahead of Presidential Polla

With its overwhelming victory in the parliamentary by-elections yesterday, the Grand National Party (GNP) seems ready to take the initiative on the parliamentary floor in the lead-up to the Dec. 19 presidential election. Taking 10 of the 13 parliamentary seats in the by-elections, the conservative GNP now has 138 seats, a clear majority in the now 272-member National Assembly. The Millennium Democratic Party (MDP), which now has 114 seats, adding just three seats in the polls. The number of seats held by the splinter United Liberal Democrats (ULD) remained at 14 since it fielded no candidates, while the Democratic Labor Party (DLP), which emerged as the third most popular political force in the June 13 local elections, failed to get onto the parliamentary floor. President Kim Dae-jung, whose term in office will end next February, is expected to suffer more difficulties in managing state affairs as the GNP, which is set to oppose the government, will dominate the legislature. The MDP, founded and formerly led by President Kim, as well as the government, face a tough course ahead in future parliamentary proceedings since the GNP can now independently push its own policy on the floor. The GNP has repeatedly called for the introduction of a special prosecution system and a parliamentary investigation of corruption scandals involving two of President Kim's three sons. Though it might exercise restraint in consideration of a possible public backlash, the GNP, which is aiming at retaking power in five years, is expected to take hard-line policy in parliament in the run-up to the upcoming presidential poll. First of all, the major political rivals _ the GNP and the MDP _ are expected to have a rough course ahead in the confirmation hearings and endorsement of the soon-to-be-designated Prime Minister. On July 31 the assembly rejected the government-submitted motion for confirmation of Chang Sang to be appointed as the nation's first female premier in a floor vote after a harsh confirmation hearing. (by Ryu Jin)

From http://search.hankooki.com/ 08/09/2002

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President Promises Fair Election

Stressing Korea's unprecedented chance to build a prosperous country in the 21st century, President Kim Dae-jung said yesterday that he will push for continued reforms as well as better ties with North Korea, and promised the Dec. 19 presidential election would be managed in a fair way. In an address to mark the 57th anniversary of Liberation Day, Kim paid homage to the patriots who dedicated their lives to resisting Japanese colonial rule, and emphasized that Korea was at a threshold for the next leap forward. In the message read by Prime Minister-designate Chang Dae-whan at Independence Hall near Chonan, the president said that all economic entities should not be content with what they have done so far, but continue with the process of restructuring. ``Reforms are the best and only way to attain a competitive edge in the global market" he said, stressing that recent events have made it imperative to implement and adhere to better transparency guidelines in corporate governance and trade. The chief executive then called for stabilization of labor-management relations, and said that he will work to find a way to make the transition to a five-day workweek more acceptable to all parties. He then called for an unflinching effort by companies and workers to further develop cutting-edge industries, like the information-communication sector, to elevate the industrial structure of the country. Kim added that the government would make an effort to support exports and bring in more foreign investment. The president also said that the Seoul government will make a concerted effort to retrieve public funds that were used to bolster weak financial institutions and companies following the 1997 IMF financial crisis. He conceded that globalization was exerting a negative influence on the agricultural sector, but said that the government was working on various measures to stabilize the income of farmers and fishermen. On matters related to ongoing inter-Korean talks, Kim said that his government would endeavor to improve inter-Korean relations so that peace and stability can reign on the peninsula. He pointed out that frequent talks have helped to maintain peninsula stability despite the world being rocked by the September 11 terrorist attacks against the United States. Kim mentioned that family reunions have taken place, and that an expansion of civilian exchanges between the two Koreas was positive news. ``Because there was peace and stability on the Korean Peninsula, foreign investment in Korea grew,'' he said. In addition, Kim said that the policy of reconciliation and cooperation between the South and the North should be maintained to ensure lasting peace on the Korean Peninsula, and that the June 15 Joint Declaration must be honored without fail. ``It is not simply a pact between the two Koreas, but a promise before the international community,'' he declared. Kim Dae-jung then said that his government would manage the upcoming presidential election in a fair and just manner, as it has done with recent local autonomous elections and parliamentary by-elections. He added that the government has designated 2002 as the year to allow advanced election practices to take root in Korea so that the foundations for the further development of democracy can be built. The president moreover vowed to keep his distance from internal politics, while concentrating all his energy in the remaining months of his presidency on building a national base so that Korea can become one of the top four economic powers in the world. ``I will fulfill my duties that the people have bestowed upon me until the last day, and I ask everyone to help me carry out these obligations,'' he said.

From http://search.hankooki.com/ 08/15/2002

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Ex-Conscription Chief Faces Summons This Weekend in Draft-Dodging Scandal

Prosecutors plan to issue a summons for a former top conscription official around this weekend for questioning about his alleged involvement in a high-profile draft scandal, prosecution sources said yesterday. The Seoul District Public Prosecutors' Office said it is also considering summoning an Army colonel and a former warrant officer in an effort to uncover the truth about the case revolving around the 1991 military service exemption of Grand National Party (GNP) presidential candidate Lee Hoi-chang's son. The move comes as Kim Dae-up, the former noncommissioned officer who recently exposed the scandal, is expected to submit the original copy of an audiotape presented as evidence to the prosecution as early as today. "The date for the summoning of the ex-conscription chief has yet to be set," a prosecutor said. "However, prosecutors are poised to issue him a summons around this weekend." Kim Gil-bu, former head of the Military Manpower Administra-tion (MMA), is suspected of attending a secret 1997 meeting called to minimize the impact of the purported illegal draft exemption of Lee's son. The controversy first erupted in 1997 when Lee ran for the presidency on the then ruling party ticket. Lee lost to President Kim Dae-jung, which analysts attributed mainly to the scandal. Rekindling the scandal earlier this month, Kim Dae-up claimed Lee's wife bribed military officials to have her son, Jung-yeon, exempted from military service. The prosecutor said that the prosecution office will soon summon Col. Koh Seok, who led a 1998-1999 joint military-prosecution investigation of suspected draft dodgers. "Koh will be questioned about whether the military conducted a secret probe into Lee's draft exemption," he said. Koh will be summoned as prosecution investigators secured testimony from Maj. Yu Gwan-seok that military prosecutors looked into the case of Lee's son during the joint investigation, he said. Yu was a member of the joint investigative team. The prosecutor said Kim Dae-up promised to submit the original copy of the minicassette tape as early as today. "We will examine the original as soon as it is submitted." Kim had earlier presented a duplicate tape which he claimed contains statements from a former military medical officer who introduced Lee's wife to a military surgeon. Prosecutors failed to determine if the voice recorded on the tape was that of the former military officer who is currently residing in the United States. Denying Kim's allegation, the GNP claims the scandal is politically motivated and designed to undermine Lee's bid for the presidency. The party, which dominates the National Assembly, submitted an impeachment motion for Justice Minister Kim Jung-kil last week in protest against his decision to retain a senior prosecutor in charge of the investigation into the scandal. The GNP's archrival Millennium Democratic Party said yesterday that it will step up its investigation into a variety of suspicions surrounding Lee by creating four task forces. (by Kwak Young-sup)

From http://www.koreaherald.co.kr/ 08/28/2002


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P.M. Nominee Voted Down Again

The National Assembly rejected President Kim Dae-jung's second prime minister nominee in a month, dealing a further blow to his administration and adding fuel to an already smoldering partisan rivalry. The unicameral legislature voted 151-112 to veto the appointment of acting Prime Minister Chang Dae-whan. Chang needed at least 134 of the total of 266 votes to be confirmed. Three lawmakers abstained. The majority Grand National Party (GNP), which controls 139 of the National Assembly's 272 seats, said it had decided to reject Chang in a pre-vote caucus. The Millennium Democratic Party (MDP) founded by President Kim has 112 lawmakers. The floor vote followed a two-day confirmation hearing, in which lawmakers questioned the nominee's ethical standards and alleged financial improprieties. The 13-member hearing committee grilled the former president of the Maeil Business Newspaper on suspicions of tax evasion, real-estate speculation and questionable loans from banks and his company. After the vote, the GNP also scheduled a parliamentary motion calling for the dismissal of Justice Minister Kim Jung-kil. The party submitted the proposal last Friday in protest against the minister's decision to retain a senior prosecutor who headed an investigation into the draft-dodging flap involving GNP presidential candidate Lee Hoi-chang's eldest son. The legislature is required to approve or reject the no-confidence motion by Saturday afternoon, or the proposal will be automatically scrapped. The GNP threatened to steamroll the proposal through the National Assembly, while the MDP vowed to foil the plan using physical means if necessary. Chang, 50, became the eighth prime minister designate in the nation's history who failed to get parliamentary approval. President Kim's previous choice for the post, Chang Sang, was rejected by the legislature July 31. The parliamentary vote is the latest setback for President Kim, who has been hamstrung by graft scandals involving his sons and close aides in the final months of his five-year term. The President must now select a new candidate for the No. 2 post or retain Chang as acting premier. The U.S.-educated newspaper publisher has been performing his duties as prime minister since being appointed Aug. 9. The rejection triggered an instant war of words between the GNP and the MDP, with each side blaming the other for an administrative vacuum and political crisis ahead of the Dec. 19 presidential election. The MDP accused the GNP of committing an "arrogant and irresponsible act" in pursuit of political gain. "The GNP will have to bear all responsibility for the resulting turmoil in the administration as well as damage to the nation's image and credibility overseas," an MDP spokesman said. GNP officials said the parliamentary veto is the result of the President's imprudent choice of a figure unfit for the post in terms of both ethical standards and ability to manage state affairs. Chang failed to clarify key suspicions against him, which once again led to public disappointment over widespread irregularities and immorality, said Nam Kyung-pil, a GNP spokesman, said. The party alleged that Chang and his wife violated as many as 10 laws, including those related to taxes, real estate, health insurance and residence registration. "We cannot but doubt Cheong Wa Dae's ability to screen candidates for civil service, given that it nominated Chang, whose past behavior raised serious ethical concerns," the GNP official said. Before the vote the minority United Liberal Democrats (ULD), which controls 14 seats, expressed its support for Chang, and the MDP ordered its members to vote for the ex-newspaper head. Some GNP officials had expressed concern that a rejection, the second of its kind in a month, could invite public criticism that the party is abusing its majority status in the National Assembly to cripple the administration. But in the GNP's pre-vote caucus, no members opposed the party's decision to vote down Chang, Nam said. "Despite concerns about possible adverse effects, we chose to take the path we believed in," he said. Analysts said the party feared that an endorsement of Chang would alienate the party from female voters. Women's rights groups had warned that the GNP would face a strong backlash from women voters if it approved the male candidate, who they claimed had more problems than Chang Sang, the previous nominee. Before the vote, the two major parties unveiled the results of their own public opinion polls, which showed sharply contrasting assessments of Chang. According to the GNP poll, nearly 55.3 percent of citizens opposed his confirmation, while 25.3 percent supported it. But in the MDP survey, 48.2 percent backed Chang, with 35 percent against him. Some progressive civic groups hailed the parliamentary decision as a stern warning to the nation's leaders regarding corruption and irregularities. Observers criticized the confirmation hearing for focusing too much on personal affairs, and for failing to become a lively forum to examine the nominee's ability to handle state affairs or evaluate his views on national issues.

From http://www.koreaherald.co.kr/ 08/29/2002

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Indonesia Adopts Direct Presidential Elections, Rejects Islam-Based Law

JAKARTA, Indonesia (AP) -- In a major expansion of democracy, Indonesia's top legislature amended the constitution Saturday to require direct presidential elections and end reserved parliament seats for the military. Closing out its annual two-week session, the 700-member People's Consultative Assembly also turned back calls to impose Islamic-based law in the world's most populous Muslim nation. The assembly's decision to abolish its own role as an electoral college that picks the head of state is considered the most important government change since the 1960s, when Indonesia was shaken by political unrest. When Speaker Amien Rais asked the delegates to agree on a direct presidential ballot beginning with the 2004 election, they chorused: "Agreed." All the measures endorsed Saturday were adopted by consensus rather than open ballot, after party leaders agreed no faction should be publicly seen to be defeated. Since Dutch colonial rule ended after World War II, the assembly has elected the president for five-year terms. But legislators and pro-democracy groups have been pressing since 1998 for a direct vote by Indonesia's 210 million people. Indonesia has a strong executive presidency, making Cabinet ministers responsible to the president rather than parliament and giving the president wide powers, including the right to regulate a wide range of matters by decree. Gen. Suharto, who came to power in a military coup in 1966, abused the system by rigging six consecutive presidential ballots starting in 1971. He was ousted four years ago after widespread street protests. The proposal adopted Saturday sets up a two-stage election for president, with a runoff required if no candidate wins an outright majority in the first round. President Megawati Sukarnoputri, the daughter of Indonesia's founding father, Sukarno, is the country's most popular politician and is expected to easily win re-election. Legislators also reached consensus on speeding up the abolition of 38 unelected parliament seats reserved under Suharto for the security forces. The seats will end in 2004, rather than 2009 as previously planned. Hardliners among the traditionally dominant army leadership opposed the move, but it was supported by reformers in the air force, navy and police. "This means that the military and police will be concentrating more on professionalism," said Rear Adm. Franky Kaihatu, a military legislator. Two Muslim parties dropped their proposal for the adoption of Islamic law, known as "sharia." The idea faced strong opposition from secular parties as well as the country's biggest religious organizations. "We agreed that the article on the freedom of religion will remain unchanged in the 1945 Constitution," said Jusuf Muhammad, a leader of the National Awakening Party, a moderate Muslim party that advocates keeping Indonesia a secular state. The development was expected. A proposal to introduce Islamic law has been on the agenda of every assembly session since Suharto's overthrow, but it has never attracted significant support. (by Slobodan Lekic)

From http://www.nj.com/ 08/10/2002

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Indonesia Takes A Giant Step Down the Road to Democracy

Indonesia took its biggest step for almost 30 years yesterday on its often bumpy road towards full democracy. The country's supreme legislature kicked the once virtually omnipotent military out of the national assemblies and surrendered to the people its right to elect the president and vice-president. Both milestones will come into effect at the end of the next parliamentary term in 2004. Other decisions taken by the 700-member People's Consultative Assembly (MPR) at the end of its 10-day annual session included a rejection of efforts by Muslim parties in the world's most populous nation to introduce sharia law. Political analysts and non-governmental organisations broadly welcomed the changes, but criticised the assembly's failure to establish a commission to draft a totally new constitution. Legislators were kept aware of public demand for change by student demonstrations outside the parliament building. On several occasions police were used water cannon to prevent the several thousand protesters storming into the parliament compound. On most days the students were joined by thousands of radical Muslims demanding the imposition of sharia law for Muslims. Banishing the military from both the parliament and the MPR has been one of the main demands of pro-democracy activists since Indonesia's former dictator, General Suharto, was toppled in May 1998. The security forces, particularly the army, had been the most powerful political force since Suharto took power in 1966 and retained massive influence after his ousting, even though their number of seats was cut in half to 38 in the 500-seat parliament. Immediately before the MPR met, the head of the armed forces, General Endriartono Sutarto, said he wanted the military to retain its seats for at least another five years, but the strongest parties rejected his demand. 'Getting the military out of the MPR and parliament is very significant,' said Rico Marbun, head of the student council at the University of Indonesia. 'Hopefully it will teach them that their job is to be a professional force and leave politics to the people.' Introducing direct presidential elections is equally momentous. Suharto used the MPR, which he controlled, to 'elect' him every five years to give his dictatorship a veneer of legitimacy. The new system will involve political parties nominating a presidential and vice-presidential ticket. If no one secures a majority, a run-off will be held between the two tickets securing the most votes. Critics say its one major flaw is that independent candidates will not be able to stand. The current president, Megawati Sukarnoputri, is expected to win re-election in 2004, even though she is not as popular as when she replaced the impeached Abdurrahman Wahid in July 2001. Political analyst and founder of a new centrist political party Andi Mallarangeng said progress should not be underestimated. 'Even a few months ago, direct presidential elections seemed unattainable,' he said. 'But the constitution is still in a big mess and needs to be rewritten. That battle will probably take another few years.' (by John Aglionby)

From http://www.observer.co.uk/ 08/11/2002

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Calls Mount for Cabinet Reshuffle Amid Failures

Calls to reshuffle the Cabinet are again mounting. Analysts have blamed the development on the Cabinet's poor teamwork and asked whether a reshuffle would benefit President Megawati Soekarnoputri. The answer appears to be both yes and no. Continued blunders, such as a Government-sponsored treasure hunt and the inept handling of issues surrounding the eviction of Indonesian workers from Malaysia, have led up to new pressure for changes in the Cabinet lineup. "The time is right for Megawati to reshuffle the Cabinet," political analyst Indria Samego of the National Institute of Sciences (LIPI) said over the weekend. "It will boost the government's performance." Media reports have speculated a reshuffle will be announced after Megawati returns from her trip to South Africa and Europe in September. Several members of Megawati's Indonesian Democratic Party of Struggle (PDI Perjuangan) have also called for new ministers. Last week Minister of Religious Affairs Said Agil Al Munawar embarrassed the government when he gave permission for a treasure hunt on a protected historic site in the West Java town of Bogor. Earlier labor minister Jacob Nuwewa was lambasted for his lack of action after many thousands of illegal Indonesian workers were booted out of Malaysia. Sporadic debate between ministers as to whether Indonesia needs the International Monetary Fund (IMF), which is providing aid under a tough austerity program, has come to undermine the government's credibility. "It comes down to poor coordination," Indria said. Indeed, the only minister whom critics have labeled as incompetent is Minister of Defense Matori Abdul Djalil. Others have either failed to follow the government's line, like outspoken State Minister for National Development Planning Kwik Kian Gie, or have been criticized for their policies. Indria added that several ministers might be competent but they were unable to get things moving, such as Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti. "Dorodjatun has a good understanding of the economy but we cannot approach our economy with theories alone." The economic team has been praised for reestablishing cordial relations with international donors, notably the IMF. A stronger rupiah and a vibrant stock market are the immediate impact of this. Yet bank restructuring remains painfully slow and farmers, the largest source of employment in Indonesia, cannot compete with the glut of imported commodities. "Megawati's fate depends on how the public is responding to her government," Indria said. "It may not be in her character (to change ministers) but she might do it anyway out of necessity." Rumors of Cabinet reshuffles first emerged late last year. Those playing down the possibility argued that Megawati refused to follow the infamous moves of predecessor Abdurrahman Wahid who frequently changed ministers. It took Megawati more than two weeks to finalize her 32-member Cabinet. But she rewarded the waiting with a sound lineup which focused on professionalism without disfavoring political allies. Megawati confidante and PDI Perjuangan deputy Secretary General Pramono Anung agreed that a reshuffle was unlikely. "I asked her directly about this (reshuffle plan) and she said no," Pramono told The Jakarta Post. Recruiting new ministers less than two years before the 2004 general election may also prove risky, according to political observer Riswandha Imawan of the University of Gadjah Mada. A reshuffle would show her as shifting problems onto others which he said would miss the point. Riswandha said the Cabinet was suffering more from poor teamwork rather than incompetent members. "We have here a team of specialists. The malady among many specialists is that they have big egos, and that is hampering teamwork," he explained. (by Berni K. Moestafa)

From http://www.thejakartapost.com/ 08/26/2002

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Malaysia: Civil Service to Practise Smart Partnership

LANGKAWI: The Government plans to expand the "smart partnership" concept in the country's civil service to ensure that its principles are practised at all levels of the public sector. Chief Secretary to the Government Tan Sri Samsudin Osman, said the concept was being practised in the service but there was still room for expansion. He said the entire service should understand and fully propagate the concept. Samsudin - one of the four joint-chairmen of the sixth Langkawi International Dialogue (LID) - said the merits of smart partnership discussed in the context of the Malaysia Incorporated policy, could enhance the country's public and private sector relationship. He said it was the duty of the civil service to mirror its administrative style along the smart partnership concept under which it was the role of the Government to help business entities develop. Samsudin said department heads should take the initiative to make certain that officers and staff understood the concept. Asked about the delay in handling various private sector business applications, Samsudin said the problem was constantly been discussed and that several high-level meetings had taken place to address issues afflicting the synergy of public and private sectors co-operation. "The civil service must understand that the private sector continues to remain the country's engine of growth and that it is mutually beneficial for both sectors to compliment each other." "A thriving private sector will mean more revenue in the form of duties and taxes for the Government" he told reporters on the sidelines of Session I of the LID's proceedings.

From http://thestar.com.my/ 08/03/2002

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People Want An Honest Government, Says Megat Junid

KOTA KINABALU: Umno information chief Tan Sri Megat Junid Megat Ayob said people are more discerning and capable of judging the value of each government project and identify any corruption involved in its implementation. He said the people were not against development but wanted an honest government and would not tolerate any form of corruption or abuse. "They can sense when money is being diverted into the people's pockets and they are ready to respond in anger,'' he said at a gathering of Sabah Umno information officials here on Friday. Megat Junid said the Barisan Nasional's defeat in the recent Anak Bukit by-election was not an indication that the politics of development no longer mattered to the people. "They want progress but there is criticism against development which is abused by those in authority. "People will complain when projects fall short of expectations, such as sub-standard projects and services due to fraud,'' he added. Megat Junid said Sabah Umno's strength and influence as the backbone of Barisan in the state would be eroded if party members become complacent and take the people's support for granted. "Things can change in the blink of an eye if the people's perception of Umno alters because of our negligence or foolishness,'' he said, noting that a quarrel among Umno leaders led to the formation of PAS in 1950.

From http://thestar.com.my/ 08/04/2002

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Dr M - Democracy Should Be Handled With Care

YANGON: Democracy should be handled with care or the end result might be anarchy, Prime Minister Datuk Seri Dr Mahathir Mohamad said. He said Malaysia believed in democracy but recognised that there were very many interpretations of it. "Some countries even call themselves democratic republics but they are anything but democratic. What we know is that it is not easy to handle democracy. "If you do not know how to handle it, you can end up with chaos, having practically no government and that is not good for any country, " he said at a press conference after opening the Myanmar-Malaysia technology conference here yesterday. Dr Mahathir said when countries opted for democracy, it was necessary for the process to be gradual, adding that people had to learn how to handle it. "They must understand that democracy does not mean the freedom to do anything you like. There are limitations to democracy. Democracy can work, only if you understand this," he said. He said that Malaysia's view was that while it upholds democracy and like to see it practised, "we are also aware that the process of change must be gradual and not go straight to liberal democracy because that will be very disruptive." Earlier, Dr Mahathir said he had discussions with Senior General Than Shwe, chairman of Mynamar's State Peace and Development Council (SPDC) and Prime Minister, on cooperation between the countries in technology, trade and investment. He said he had also seen some of the products of Mynamar that could be traded in Malaysia, adding that one of the areas he was interested in was the herbal industry, to explore possibilities of jointly developing herbal treatments. Dr Mahathir said he also discussed with Gen Than Shwe how Myanmar was developing its progress in the democratisation of the country and Malaysia's approach towards the country, both politically and economically. Meanwhile, Lt Gen. Khin Nyunt, Secretary 1 of the SPDC, said that Myanmar was laying down the foundations for the emergence of a democratic state. The third most senior leader of the military government, however, said the democracy that Myanmar sought to build might not be identical to that of the West but would "surely be based on universal principles of liberty, justice and equality with the rule of law". "But such a transition cannot be done in haste and in a haphazard manner. "The world is full of examples where a hasty transition from one system to another has led to unrest, instability and even failed states," he said.

From http://thestar.com.my/ 08/20/2002

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Council to Push Our Education Sector Overseas

PETALING JAYA: Under a recent proposal, a body to be called the "Malaysia Council" will soon be set up at Malaysian foreign missions worldwide to promote the country's education industry. Dubbed "the Malaysian equivalent of the British Council," the body will focus primarily on the private education sector, as public institutions do not actively recruit foreign students except for the graduate and post-graduate levels. Sources told The Star on Monday that Education Minister Tan Sri Musa Mohamad gave the initiative the go-ahead two months ago and that it was being jointly spearheaded by the ministry's Private Education Department (JPS) and Higher Education Department (JPT). "Malaysia Council offices will not be set up in countries such as Britain where our country's education sector is already known. It is more for the newer markets such as the Middle East and South-East Asia," they added. Deputy director-general of education (private education) Datuk Hassan Hashim, who confirmed the setting up of the body yesterday, said the initiative was being actively pursued as Malaysia's education industry was not adequately represented overseas. "It is still at the proposal level as there are various details to be discussed," he said, declining to comment further. Latest ministry figures reveal that there are over 20,000 foreign students from 100 countries studying here. The ministry has embarked on an active recruitment drive for foreign students this year that includes promotional visits to the Middle East and Vietnam. The sources said Malaysia Council offices would first be set up at either Malaysian embassies or Malaysian Student Department (MSD) offices overseas. "The ministry is also looking at redefining the role of the MSD offices as they only deal with the welfare of students and funding (of government scholars)," they said. There are currently 11 MSD offices around the world. Malaysian Association of Private Colleges (Mapco) secretary-general Teo Chiang Liang said Mapco had actually mooted the idea about three years ago. "We applaud this proposal but it must be carried out properly. It would be good if it is made compulsory for all institutions to subscribe to the council." Currently, the privately-run Malaysia Education Promotion Council, headed by Tan Sri Lim Kok Wing, is the only body representing the private education sector overseas. The sources revealed that a point of contention delaying the progress of the initiative was the debate between the JPS and JPT over the Malaysia Council attach to be sent overseas. "They both want their representatives there." (by Gavin Gomez)

From http://thestar.com.my/ 08/21/2002

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Philippines: Davide Asks Envoy for Details on Corruption

Chief Justice Hilario G. Davide Jr. has asked US Ambassador Francis Ricciardone to give details on alleged corruption in the Philippine judiciary "in the highest interest of justice and fairness" and to assist the Supreme Court in its campaign to rid the judiciary of scalawags and misfits.In a letter to Ricciardone dated last Aug. 5 and signed by Assistant Court Administrator Ismael Khan Jr. in behalf of the chief justice, Davide said that immediate action by the ambassador "will go a long, long way in demonstrating your adherence to the elementary virtue of fairness." Last month, Ricciardone issued statements to the members of the Foreign Correspondents Association of the Philippines (FOCAP) claiming that the Philippines is losing the economic race in Asia due to a perception of widespread corruption, especially in the judiciary. Davide said he was in the hospital when Ricciardone's statements were played prominently in the media. The chief justice underwent a successful carotid operation. He said he was dismayed by the way Ricciardone was quoted in published reports "because it seemed to me that you have forgotten what I told you when you paid me a courtesy call on March 21, 2002." In that courtesy call, Davide said that he informed Ricciardone that the Supreme Court has been vigorously addressing the issue of corruption in the judiciary and continuous to do so. The chief justice also said that he informed the American ambassador that the Supreme Court has dismissed from the service, suspended from office, or fined scores of judges, including an associate justice of the Court of Appeals, as well as other court officials and personnel for dishonesty, ignorance of the law, immorality, and other forms of malfeasance and misfeasance in office. Davide said he told Ricciardone of the Supreme Court's Action Program for Judicial Reform (APJR) whose components were designed to achieve an independent, effective and efficient judiciary that is worthy of public trust and confidence. Last June, Davide's APJR received financial assistance from the Canadian government to the tune of P250 million. In his letter, Davide asked Ricciardone to give specific information on cases where any American citizen, natural or juridical, was discriminated upon by any justice, judge, or court official. He also asked specific cases where a justice, judge, or court official had demanded, or suspected of having demanded, money or any other consideration to obtain either in favor of an American litigant or against it. Davide also asked for a list of lawyers who have appeared for an American litigant against whom a "bribed" decision may have been obtained by the adverse party. More specifically, Davide asked Ricciardone for a list of American businessmen or American corporations, partnerships, joint ventures, etc., who or which have withdrawn their investments in the Philippines or have desisted from investing in the Philippines exclusively on the basis of corruption in the judiciary, or are being discriminated against under the justice system in the Philippines, with an indication whether they did so before or after the ambassador assumed office in the Philippines. Letters of the same tenor were sent by Davide to several businessmen who were quoted in published reports that they have first-hand knowledge of corruption in the Philippine judiciary. The chief justice asked the businessmen to cite specific cases and to name names. (by Rey G. Panaligan)

From http://www.mb.com.ph/ 08/09/2002

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S'pore Seen As Fifth Least Corrupt Nation

SINGAPORE's reputation as a corruption-free country has dropped a notch - it now shares fifth place with Sweden in a global survey on perceptions of graft. However, the level of corruption here was seen to be lower than in the previous year. Coming in tops among the 102 countries and places surveyed was Finland, with Denmark and New Zealand sharing second place. Bangladesh was at the bottom of the list. The annual Corruption Perceptions Index brings together results from 15 other polls of businessmen and risk analysts. It was carried out by Transparency International, an international anti-corruption organisation that brings together civil-society groups, businesses and governments. In the survey released on Wednesday, Singapore scored 9.3 (out of a maximum of 10) this year. Iceland scored 9.4. Both scored 9.2 last year and tied for fourth place. Bangladesh managed 1.2, three times better than last year's 0.4.Some 70 countries, including many of the world's poorest, scored less than 5, with places such as Indonesia (ranked third last) getting special mention. Countries perceived to be the least corrupt tended to be rich ones such as Finland and Singapore, said Transparency International. Mr Peter Eigen, its chairman, blasted the widespread incidence of graft worldwide. He said: 'Political elites and their cronies continue to take kickbacks at every opportunity. 'Hand in glove with corrupt business people, they were trapping whole nations in poverty and hampering sustainable development, he added. Corruption is dangerously rife not just in poor countries but also in many countries whose firms invest in developing nations, he said. Tunku Abdul Aziz Ibrahim, Transparency International vice-chairman, agreed that the poll showed once again that corruption afflicts developing and developed nations alike. Developed nations have a responsibility to bring before the law companies under their jurisdiction which bribe officials in poor countries, he added.

From http://straitstimes.asia1.com.sg/ 08/30/2002

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Thailand: New Mechanisms Would Give Vitality to State Organisations

Bureaucratic reform promises a new dawn for the Thai bureaucracy widely perceived as the administration of mediocrities, a high-level government official said. Khunying Thipawadee Meksawan, secretary-general of the Civil Service Commission, said reform had mechanisms that would give vitality to state agencies plagued with red tape, make passive staff active and turn department chiefs and permanent secretaries into good managers and ministers into policy-makers.Khunying Thipawadee said all those changes would benefit the people the most.The opposition and the Senate said they could not see how new administrative structures would increase productivity and efficiency because the bureaucracy would be bigger and the chain of command longer.Because the number of ministries would increase to 20 from 14, they believed the government eventually would have to hire more people and needed more money for their operations.As a reform architect, Khunying Thipawadee needed to prove the critics wrong. At a bureaucratic reform seminar on Wednesday, Khunying Thipawadee said size did not matter. Countries smaller than Thailand such as Malaysia and New Zealand had 24 ministries and 35 respectively, she said. What counted was their maximum efficiency and cost-effectiveness, she said. ``Reform will yield better results at lower costs and certainly our people will benefit from that,'' she said. After the changeover on Oct 1, Khunying Thipawadee said government officials would come to work knowing exactly what they would have to do that day without having to wait for instructions from supervisors. ``In the new system, their roles are clearly defined and everyone knows clearly what his or her assignments are.''Khunying Thipawadee said permanent secretaries would have to do more than signing files because the modernised structure needed them to be good coordinators, creative, independent, flexible and smart and good at translating policies into practices.Ministers, meanwhile, had to prepare policies and operational plans of their own before taking office.``They can no longer say they need time to study their work. A person who becomes a minister just to bring honour to his family will be unacceptable,'' she said.Khunying Thipawadee said it would not take much time for the people to know if any minister or permanent secretary had brains and could do a good job. Officials who were not really competent would hardly get the post of department chief.``We will see department chiefs who quit before retirement because they can not work well and therefore feel humiliated,'' she said.Khunying Thipawadee said the budget disbursement procedural bill, a key piece of legislation to support the implementation of bureaucratic reform, would guarantee transparency in budget spending.The public could exercise its right to know under the State Information Act to check where the budget would go, who would spend it and what benefit it would generate. She also said the bigger structure would not affect taxpayers because the number of posts would be fixed at 398,385.(By Mongkol Bangprapa )

From http://scoop.bangkokpost.co.th/ 08/10/2002

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Officials Jittery Over Reform

Fears of an uncertain future are plaguing government officials as the Oct 1 implementation date for bureaucratic reform draws near. Many are anxious their career advancement will be stalled if they are transferred to local administration organisations. About 3,000 officials of the Accelerated Rural Development Office (ARDO) and the Public Works Department will be shifted to the Highways Department when the bureaucratic reform kicks off on Oct 1.At a seminar on the bureaucratic reform, organised in Surat Thani by the Civil Service Commission (CSC) yesterday, many C-6 ARDO officials raised questions about their promotion chances if they were moved to local administrative bodies, since most supervisors at municipalities were still at the C-5 level. They said many officials were seeking a transfer to other state agencies, while many others could only hope they would be lucky enough to remain in the provinces they were now. A C-8 ARDO official said he wondered if he could sue the government in the Administrative Court if he was put to work with a local administration organisation against his will.CSC deputy secretary-general Chalerm Sripadung said the government had made it clear all government officials would still enjoy the same rights and welfare benefits after the bureaucratic reform, and that their new jobs would offer opportunities for advancement. Initially, he said, officials would join local administration organisations on a voluntary basis. The CSC would open a special centre to prepare officials who were to be shifted to local administrations for their new responsibilities and environment. Deputy Prime Minister Pongpol Adireksarn said bureaucratic reform could begin only after the bills on national administration and bureaucratic restructuring, now being scrutinised by the Senate, were passed into law. (by Mongkol Bangprapa )

From http://scoop.bangkokpost.co.th 08/15/2002

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Vietnam to Increase Salary for Administrative Officers

HANOI (Xinhuanet) -- Vietnam is to give a pay rise for 1.4 million workers currently classified as administrative officers including teachers, scientists and health care workers who are currently paid under the administrative sector structure, even though they do not work in the area. °°°°Under a draft wages decree, made by the Ministry of Labor Invalids, and Social Affairs (MoLISA), which will be presented to Prime Minister Phan Van Khai in a few days, also includes a small increase in the basic starting salary for administrative workers, but controversy remains over the decree's final contents, Ministerof the MoLISA Nguyen Thi Hang said at a recent seminar. Vietnam News Thursday quoted Hang as saying that officials from the MoLISA and representatives from the Vietnam Labor Confederation and other relevant agencies, admitted at the seminarthat salaries for workers in the state-run sector was the state's largest wages problem. The start-up salary for a state-run worker is 210,000 Vietnamese dong (VND) (14 US dollars) a month, which is consideredvery modest compared to other sectors in the market. The draft decree proposes the start-up salary be increased to 240,000 VND (16 dollars) a month. Hang said she hoped the changes would reduce the salary gap between people working for the state-run sector and those working for enterprises operating under foreign investment law. The state-run sector has just two monthly salary levels of 630,000 VND (42 dollars) and 210,000 VND (14 dollars) while enterprises operating under the foreign investment law have four levels of 626,000 VND (41.7 dollars), 556,000 VND (37 dollars), 487,000 VND (32.4 dollars), and 417,000 VND (27.8 dollars) per month. °°°°The base salary has traditionally been linked to the capacity of the State budget rather than other considerations, such as supply and demand in the labor market, unemployment rates or inflation.

From http://news.xinhuanet.com/ 08/01/2002

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Ministry Sets Up Safety Net for Redundant Govt Workers

(VNS)- Employees who lose their job or are forced to retire following the restructuring of State-owned enterprises (SOEs) will benefit from a new unemployment fund, set up under the Ministry of Finance. The Unemployment Support Fund has a budget of VND6,000 billion (US$400 million) and will run until 2005. Director of the ministry's financial policy department, Quach Duc Phap, said male workers aged 55 to 60 and female workers 50 to 55 who have paid premium social security insurance for at least 20 years will receive their full retirement pension. They will also receive three months pay for every year they are under the retirement age. The retirement age for men in Viet Nam is 60 while for women it is 55. Workers forced to retire early will also receive five months pay for the first 20 years they paid social security and half a monthly salary for each year after that. 'Sacked employees will receive two-months pay for each year they worked for the SOE, as well as VND5 million in compensation and a subsidy worth six-months pay to help them find new jobs.' Employees interested in new careers will receive a maximum of six months free training at State vocational centres. The director also made it clear that employees working for SOEs on 1-3 year labour contracts will also receive financial benefits if their contract finishes early. The contractors will be paid 70 per cent of their entitlements for a maximum of 12 months after they stop working, as well as one month pay for each year they worked for the enterprise. The restructuring drive will see the number of SOEs reduced from current 5,600 to 2,000 by the year 2005.

From http://www.vneconomy.com.vn/ 08/09/2002

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Vietnam Urged to Adopt Major Reforms

VIETNAM must cut taxes, improve power supplies and let foreigners buy bigger stakes in state and public companies to reverse a 'dramatic decline' in foreign investment, a senior government official said. The value of approved foreign-invested projects in Vietnam fell more than 40 per cent in the seven months through July 31 compared with the year-earlier period to US$594 million, according to Le Dang Doanh, an adviser to Vietnam's minister of planning and investment. Mr Doanh was speaking at a conference organised by Vietnam's central bank and the International Monetary Fund. Foreign investment in the nation of 80 million people has fallen since 1996, when the value of approved foreign projects in Vietnam reached a peak of about US$9 billion. That slump can't be blamed solely on the 1997-1998 crisis that roiled countries in the Association of South-east Asian Nations, said Mr Doanh.' The decline of foreign direct investment in Vietnam is more pronounced compared with other Asean economies, while the recovery of foreign direct investment in Vietnam is slow compared with other Asean economies,' he said. 'Internal factors must be considered to explain this situation in Vietnam. 'The price of international telephone calls and Internet use in Vietnam are 'exorbitant', Mr Doanh said. Vietnam still has a dual-price system for foreign investors, while both corporate and personal income taxes are 'well above the regional average'. Mr Doanh also highlighted restrictions on foreign investment in companies listed on the Ho Chi Minh City Securities Trading Center as a disincentive to foreign investment. An unstable power supply creates significant additional costs and prevents investors from moving into high-technology investments, Mr Doanh said. The restricting of foreign investors to buying no more than a 30 per cent stake in state-controlled companies 'seems to overlook the recent wave of mergers and acquisitions' in the region. Some competitive advantages are also disappearing, he said. 'The advantage of low labour costs is diminishing gradually because of increasing salaries but slower growth in productivity,' he said. 'Unit labour costs are gradually rising. 'The policy of the ruling Communist Party, which began market-oriented changes in policies in 1986, is to develop a 'socialist-oriented market economy'. The need for Vietnam to compete with other Asean countries and with China makes more 'rapid and systemic reform' critical, Mr Doanh said. 'The task at hand now is to implement effectively these proposals and to widely trumpet progress in these areas to the global community,' said Susan Adams, senior resident representative in Hanoi for the IMF. The IMF in June approved the release of a US$53 million tranche to Vietnam as part of a three-year, US$370 million loan programme begun last year. Vietnam needs to 'match the rhetoric with concrete progress' in implementing a trade accord with the US, selling stakes in state-owned companies, reforming the banking industry and developing competitive private companies, she said.

From http://business-times.asia1.com.sg/ 08/19/2002

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Bangladesh: Free Ffs' Trust from Corruption: PM

Prime Minister Khaleda Zia yesterday asked all concerned to make all establishments under the Muktijoddha Kalyan Trust free from corruption and irregularities and turn them into more profit-making organisations. If these could be run properly, more welfare programmes would be taken for the freedom fighters. The Prime Minister also recalled the sacrifices and contributions of the freedom fighters in the War of Liberation. She said this at the 62nd meeting of the Board of Trustees of Bangladesh Muktijoddha Kalyan Trust (BMKT) at the International Conference Centre in the afternoon. State Minister for Liberation War Affairs Redwan Ahmed, Prime Minister's political secretaries Haris Chowdhury and Mosaddeq Ali, and members of parliament Abdul Hye, Mozahar Hossain and Mohammad Shahjahan, attended the meeting with Khaleda Zia in the chair. The meeting decided that the monthly honorarium for 96 freedom fighters would be raised to Tk 2,676 from Tk 2,000. The Tk 2,000 monthly honorarium for the families of seven Bir Shreshthas, being paid since January last according to the PM's announcement, was also approved at the meeting. The Prime Minister asked for intensifying the activities of the establishments under the Trust. The meeting observed that restructuring of the management and reallocation of responsibilities were necessary to bring dynamism in the establishments under the BMKT. The Ministry for Liberation War Affairs was asked to prepare a proposal in this regard.

From http://www.dailystarnews.com/ 08/01/2002

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PM Stresses Coordination of Housing Programmes

Prime Minister Khaleda Zia yesterday underscored the need for consolidation of various housing programmes and their proper coordination to help reduce the administrative expenses and thus increase the number of people of the target groups. Chairing the 8th meeting of the Housing Fund Trustee Board at the International Conference Centre (ICC), Khaleda Zia emphasised the need for coordination of poverty alleviation programmes aimed at welfare of the beneficiary groups. As a result, she said the money so saved, could be utilised for increasing the number of beneficiaries. Finance and Planning Minister M Saifur Rahman, Minister for Women and Children Affairs Khurshid Jahan Huq, Land Minister Shamsul Islam, Relief and Disaster Management Minister Chowdhury Kamal Ibne Yusuf, Minister for Social Welfare Ali Ahsan Mujahid and Works Minister Mirza Abbas participated in the discussion. PM's Principal Secretary Dr Kamal Siddiqui, Bangladesh Bank Governor Dr Fakhruddin Ahmed, ASA Director Shafiqul Huq Chowdhury, Barrister Mahbub Uddin Khokon and secretaries concerned were present.Describing housing as one of the basic rights of the people, the prime minister said her government would fulfil its election pledge by meeting the basic needs of the people. In this connection, she said her government has undertaken massive programmes for poverty alleviation. The prime minister said, the objective of our government is to integrate the people in various development activities so that they could become self-reliant. Khaleda Zia asked for proper evaluation of the activities of the Housing Fund while stressing the need for restructuring the two committees of the Trustee Fund. The prime minister said the objective of her government is to turn poor and distressed people into productive forces providing them with necessary help and support so that they could become independent. Referring to the river erosions, road constructions and water logging problems, and ailing people of different parts of the country, Khaleda Zia underlined the need for formulating a national level comprehensive and coordinated plan saying deputy commissioners could be asked to send reports of their respective districts in the light of their experiences for formulating the plan.

From http://www.dailystarnews.com/ 08/04/2002

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India: Vajpayee to Reshuffle Cabinet Today

NEW DELHI: A minor reshuffle of the Union council of ministers is likely to take place on Monday. The reshuffle has been necessitated by the resignation of Shiv Sena nominee and power minister Suresh Prabhu.The likely candidate for the cabinet slot from Shiv Sena is minister of state for finance Anant Geete, with Anandrao Gadsul being inducted as MOS, finance. But it remains to be seen whether the Prime Minister will undertake the BJP reorganisation simultaneously. The Sena had two cabinet posts with Manohar Joshi as heavy industries minister and Prabhu. With Joshi becoming the Lok Sabha Speaker, Geete was inducted as minister of state for finance and the Sena minister holding that portfolio, Balasaheb Vikhe-Patil, elevated as cabinet minister to replace Joshi.With Prabhu's resignation, it is expected that Geete would be promoted and Sena's Dalit MP from Buldhana, Anandrao Gadsul, would step in as minister of state for finance.Sena chief Bal Thackerayhad asked Prabhu to quit. Prabhu's resignation was sent to the Prime Minister on August 14.

From http://timesofindia.indiatimes.com/ 08/25/2002

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India Among 30 Most Corrupt Countries--Survey

New Delhi: India ranks among the 30 most corrupt nations, according to a survey by a leading international NGO on Wednesday. India with a score of 2.7 on a scale of 10, stands 71st along with Russia, Zimbabwe and Tanzania among others in the corruption perceptions index (CPI) 2002, released by Transparency International (TI). The survey called a "poll of polls" reflecting perceptions of businessmen, journalists, academics and country analysts ranks Pakistan, with a score of 2.6 as more corrupt than India. Finland, Denmark and New Zealand, with score higher than nine, rank as countries with very low levels of perceived corruption, according to CPI. Bangladesh, Nigeria and Praguay, with a score less than two, were the countries where corruption was perceived to be rampant, says the survey. "Political masters of the country have chosen to make just promises, but nothing gets done," said TI, India chapter, chairman Admiral R H Tahilani (Retd). CPI is a index of corruption perceived to exist among public officials and politicians and is put together after 15 different polls and surveys carried out by independent institutions, he said.

From http://www.expressindia.com/ 08/28/2002

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Lanka Has Asia's Highest Ratio of Public Servants to Citizens

"A World Bank report says there are 700,000 public servants in the Sri Lankan Public Service, which means there are 3.1 public servants to every 100 citizens in the population. This is the highest rate in the ratio for public servants to the citizen in Asia", said Bradman Weerakoon, Secretary to the Prime Minister and the chairman of the Steering Committee of the Distance Education for Public Servants (DEPS) at the inauguration of the comprehensive orientation program for group leaders conducted under the DEPS project on Thursday. The participants were selected by the Ministry of Public Administration and Reforms, taking into consideration their educational background, leadership qualities and suitability to facilitate the program. The project has been set up to upgrade the skills of the public servants' and increase their proficiency in information technology. It aims to stimulate thinking amongst public servants of the country to change dated attitudes and adopt new methods to be more creative and proactive when dealing with their day to day activities. In this way, DEPS hopes to rejuvenate the public sector making it more effective and efficient. Improving skills, changing the mindsets of the public servants and providing them with proficiency in Information Technology are the main goals of this project. The Norwegian founded DEPS program is implemented by the worldview Global Media under the auspices of the Ministry of Public Administration, Management and Reforms. The training will take a multimedia approach varying from group led discussions and web learning to TV and radio. In the first phase of training, approximately 6000 executive rate public servants will be benefited. The web based learning will comprise of modules up-loaded fortnightly. It will also serve as a support network to group leaders and participants in the program. Computer training centres have been set up for public servants to improve their knowledge of IT in various parts of the country, in addition to the computer training, public servants in Colombo have cyber cafe facilities free of charge at J. R. Jayawardene cultural centre. Weerakoon said by introducing the concept of distance learning to the administrative service, the Ministry of Public Administration and Reforms, DEPS and SLIDA have taken very crucial measures to bring about a more dynamic public service. A large number of public servants will be benefited, and it will help to promote a more efficient and effective public service. The government spends large amounts of funds on the administrative service but the question remains, is an average citizen getting value for money? The government is of the view that a smaller administrative service would be able to provide a better service to the public. Therefore, the government might consider the idea of freezing further recruitment and to concentrate more on improving the quality of the public service. He said good governance will also improve the human rights record of the country. Speaking with years of experience as a civil servant - as it was called then, Weerakoon said the system had been apolitical and free from outside influences. Therefore the administrative sector had been able to provide a better service to the public. "The introduction of information technology is an urgent need of the administrative service. With that the administrative service can go forward with the developing and rapidly changing world". Secretary to the Ministry of Finance Charitha Rattwatte said that public administration had been relatively free from political influences before the constitutional change in 1972, which abolished the Independent Public Service Commission. Since, then there had been a drop of quality in the administrative service but the government intends to bring back the Independent Public Service Commission, and create a free atmosphere where the government servants can work more freely and with dignity. Rattwatte emphasised the importance of having gender equality at the higher administrative levels and said the government is concentrating on promoting gender balance in high offices. (by Rashomi Silva and Meredyth Lewis)

From http://www.dailynews.lk/ 08/05/2002

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Corrupt Public Officials Should Be Punished - Minister Marapana

"Deterrent punishments should be meted out to corrupt public officials who tried to squander funds voted by the state for public welfare as they are a total discredit to the Government," said Defence, Transport, Highways, and Civil Aviation Minister Tilak Marapana at a Ratnapura DCC meeting held at the Sabaragamuwa Provincial Council auditorium recently. The Minister said this when the Provincial Chief Secretary Diyatissa Ranasinghe highlighted an alleged fraud concerning the removal of earth for the SPC playground project. It was revealed that certain officers had approved payment for 800 cubes of earth to some contractors where as only 500 cubes of earth had been actually removed by them. The Minister directed the Chief Secretary to take disciplinary action against officials who had approved inflated vouchers and legal action against contractors who had submitted them. The Minister said that it was immaterial, whether the money had been actually paid or not. It was sufficient for the purposes of the law that such false declarations had already been made and submitted for payment and the official had approved payments and directed the Chief Secretary to make the relevant complaints against the offenders to the Ratnapura Police forth with and report to the DCC next session. It was the duty of the representatives of the people and the people themselves to take the initiative in detecting and reporting such frauds by being vigilant and bring to book those responsible to save the good name of the government and the administration in power, the Minister said. A fraud was a fraud whether committed by the lowest or the highest in the land, and should be treated as such, if there was proof, without reference to the status of the person who committed it, the Minister stressed. The government committed to improve the people's quality of life by salvaging the ruined economy. (by P. D. A. S. Gunasekara)

From http://origin.dailynews.lk/ 08/06/2002

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Pakistan: Minister Promises Action Against Corrupt Nazims

The Sindh governor has not stopped the ministers from pointing out the wrongdoing of the district Nazims, said Education Minister Khan Muhammad Dahri. Speaking at a reception hosted in his honour by Dr Muhammad Umer Dahri, the minister said that District Nazim Faryal Talpur should either work as the district Nazim or act as a leader of the Pakistan People's Party.

From http://www.paknews.com/ 08/04/2002

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Police Reforms Compromised to Keep the Powerful Happy

The Police Order 2002 to be promulgated on August 14 emerges as a compromised document as it gives some blunted teeth to the district public safety commission but the claws remain with the provincial governments.

From http://www.paknews.com/ 08/11/2002

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Anti-Smuggling Force to Start Operation Soon

A National Anti-Smuggling Task Force will soon start operating in all the four provinces to stop illegal import and dumping of air-conditioners, TV sets, cloth, tea and other major items in Pakistan from abroad. The proposed Task Force was given an initial shape here on Tuesday at a meeting held under Finance Minister Shaukat Aziz. Foreign Office, ministries of industries, interior and commerce, and revenue division are co-ordinating on creating the task force. CBR Chairman, Riaz Malik also attended the meeting. The direct stakeholders, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) representative were also invited to the Tuesday meeting. The Task Force has been based on an anti-smuggling system proposed by CBR under instructions from the Presidential Secretariat, say sources. This system, however, does not deal with the dumping of cheap cloth, crockery and other goods by China in Pakistan. Nor does it undertake to investigate the volume of goods cleared under-invoiced or mis-declared by the Customs Houses of Pakistan. These goods, say sources, account for almost half of the listed goods smuggled annually into Pakistan, but the relevant authorities are reluctant to touch upon them, mainly on policy grounds and to save CBR from embarrassment. The loss of revenue caused by these goods imported without payment of duties/taxes, or under-invoiced, is not as huge as orchestrated by the irrelevant official and private sector experts, but the loss to local industry is phenomenal, say sources. They added that the Foreign Office has been involved in this exercise as the anti-smuggling activity also pertains to the Afghan Transit Trade accounting for bulk of smuggled goods, needing to be taken up with the Kabul officials. The Interior Ministry would be asked to offer services on behalf of the provincial governments as the police has a definitive role in anti-smuggling operations. The Industries and Commerce Ministries would be assisting the Task Force in assessing the damage caused to the local industry, and on issues relating to dumping of cheap goods in Pakistan. One put in place, the Task Force has been proposed to operate under a grade-19 Customs official for national co-ordination, while at the provincial level committees would be created with the help of private sector to make the activity a success, said sources.

From http://www.paknews.com/ 08/14/2002

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Pakistan Election Timetable Set

Pakistan's Election Commission on Friday announced the schedule for the October 10 general election and said a poll for the upper house of parliament, the Senate, would be held on November 12. Nomination papers for contesting national and provincial assembly elections can be filed from Monday to Saturday next week. Returning officers will then have three days to decide which candidates are eligible. Appeals against any rejection of nominations will be made on September 4, with a week set aside for the appeal process. The last date allowed for withdrawal from the election will be September 13. A statement said the election for the Senate would be held on November 12. Members of the provincial and national assembly form the electorate for the Senate poll. Legal experts said the decision to hold the Senate election in November violated a May 2000 Supreme Court order validating President Pervez Musharraf's rule for three years. It had instructed him to hold elections for national and provincial assemblies and the Senate before October 30. In May the government decided to hold the Senate election through a direct vote, but later changed its mind to allow parliamentarians to elect Senate members as provided in the constitution. Musharraf won five more years as president through an April referendum held that independent observers say was heavily rigged in his favor. He is also seeking to strengthen his grip on power through a set of proposed constitutional amendments that would empower him to sack the prime minister and cabinet and dissolve an elected parliament. Major political parties, including former prime minister Benazir Bhutto's Pakistan People's Party and former premier Nawaz Sharif's Pakistan Muslim League, oppose the changes. Musharraf recently introduced laws that effectively bar both Bhutto and Sharif from returning to contest the October vote.

From http://asia.cnn.com/ 08/16/2002

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Opposition Leaders Say Azerbaijani Referendum Marred by Fraud

Opposition leaders in Azerbaijan are refusing to accept the results of the August 24 constitutional referendum, asserting the vote featured widespread fraud. The government, meanwhile, maintains that the Azerbaijani electorate expressed near unanimous support for constitutional changes, which, according to some observers, could help President Heidar Aliyev transfer power to his son. According to Azerbaijan's Central Election Commission (CEC), over 96 percent of voters approved an array of constitutional amendments, the most controversial of which calls for a change in the presidential succession process. Officials said 88 percent of eligible voters cast ballots. Opposition leaders characterized the government's results as "total fraud," the Turan news agency reported. Etibar Mammedov, leader of the National Independence Party, asserted that turnout was well under 20 percent, far short of the 50 percent needed to validate the referendum results. Sardar Calaoglu, general secretary of the Democratic Party of Azerbaijan, estimated turnout throughout the country at around 8 percent. The Musavat Party issued a statement the day of the referendum complaining that the CEC had obstructed the conduct of a free and fair vote by limiting the ability of opposition activists to monitor the vote. Authorities reportedly prevented some opposition monitors from witnessing the counting of ballots. Representatives of an opposition coalition, speaking at a news conference August 26, noted numerous voting irregularities, including votes cast by dead people and ballot box stuffing. Opposition monitors who attempted to register procedural violations were reportedly detained at local police stations, Turan reported. Government officials brushed off accusations of fraud. Ali Ahmadov, the executive secretary of the pro-government New Azerbaijan Party, said 26,000 opposition supporters received accreditation to monitor the vote, but only 4,000 took part in observing the referendum. Ahmadov went on to claim that most opposition activists did not engage in vote monitoring throughout the entire day of August 24, Baku-based Lider television reported August 25. During the run-up to the referendum, presidential aides sought to discredit government opponents, charging that leading opposition parties were receiving financing from foreign organizations and governments. Mammedov and other opposition leaders denied the accusation, saying it was "ordinary libel," the Zerkalo daily reported August 21. David Sip, head of the Baku office of the National Democratic Institute, insisted that US organizations provided only "technical aid" to opposition parties to promote capacity building and information exchanges. International organizations, including the OSCE's Office for Democratic Institutions and Human Rights (ODIHR), had criticized Azerbaijani authorities during the weeks leading up to the referendum for not providing enough time for public debate of the constitutional changes. "It is doubtful that voters will completely understand the heart of the matter," ODIHR's director Gerard Stoudmann said in an interview with Turan on August 22. Many political observers in Baku believe the key motivation for the referendum was to help President Aliyev transfer executive authority to his son, Ilham. Under one of the approved constitutional changes, the prime minister would replace the parliament speaker as the first in line to succeed the president in case of incapacitating illness, death or resignation. Some suggest that the elder Aliyev might appoint his son as prime minister and then resign. After casting his referendum ballot, a reporter asked President Aliyev about the possibility of his son assuming the presidency. Aliyev at first countered with his own question: "Why do you ask such a question?" Later, he responded: "Ask those who say this [the dynastic succession theory]. But I do not say so." A poll of political experts, conducted by Turan in the days before the referendum, showed that opinion was split evenly over whether the constitutional changes would assist Aliyev in transferring power to his son. At the same time, experts expressed skepticism over the opposition's ability to mount an effective challenge to Aliyev's political plans, whatever they are.

From http://www.eurasianet.org/ 08/26/2002

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Kyrgyz Authorities Slam New Opposition Group

The Movement for the Resignation of President Askar Akaev and Reforms for the People -- a new opposition grouping launched on 14 August -- had a rocky first week. The government immediately fired a warning shot across its bows. But the movement was also criticized by some leading opposition figures who might have been expected to sympathize with its aims. The movement was founded by representatives of 22 opposition political parties, public organizations, and NGOs, including the Communist, Erkindik, and Asaba parties, the "Kyrgyzstan" bloc of deputies in the Legislative Assembly (the lower chamber of parliament), the Kyrgyz Committee on Human Rights, and others, Kabar news agency reported on 15 August. General Ismail Isakov, a lawmaker who serves as chairman of the parliamentary security committee, was elected to head the movement. As its spokesmen made clear at an inaugural press conference in the capital Bishkek on 14 August, the movement owes its origins to two so-called People's Conferences held earlier this year. They were organized as public forums to discuss the 17-18 March antigovernment riots that left six dead in the country's southern Aksy Raion, Djalalabad Oblast. The first was held in April, the second in July (see "RFE/RL Newsline," 18 April, 19 July 2002). On both occasions, participants called on Akaev to step down. As its name proclaims, the president's resignation remains the movement's primary objective, which its members say is widely shared by the populace. "We have been in our districts and saw that more than 80 percent of the people demand Akaev's early resignation, since they don't trust him," said deputy Adakham Madumarov of the "Kyrgyzstan" parliamentary group, as quoted by AP on 21 August. The movement's plan, according to its leader Isakov, is that Akaev should quit, his duties should temporarily be shouldered by the prime minister, and a coalition government should be formed pending new presidential elections (see "RFE/RL Newsline," 15 August 2002). The movement's broader objective is to press for reforms in the power structure. To this end, it has created a council charged with drafting changes to the constitution. The changes are aimed at devolving some of the executive branch's many powers to the parliament, AP reported. In a statement released on 14 August, the movement emphasized that it would work within the law, fighting for its goals "through peaceful and constitutional means." But it had barely unfurled its sails before the government threatened to sink it. On 15 August, the day after it was launched, Deputy Prime Minister Kurmanbek Osmonov said the movement was an illegal formation, with no legal basis, and contravened the Kyrgyz Constitution, RFE/RL's Bishkek bureau reported. Osmonov added that the authorities were considering taking legal steps against the group (see "RFE/RL Newsline," 16 August 2002). The government elaborated its position on 21 August in a statement carried by AKIpress. The statement said that the executive, as guarantor of the constitution and defender of "social order and security," was taking every measure to stabilize the situation in the country after the Aksy incidents. Hence it must act when stability is threatened or the constitution is in danger, and it indicated that Movement for the Resignation of President Askar Akaev was a menace on both counts. It reiterated that Osmonov was expressing the government's position in his remarks about the fledgling movement. Moreover, it commented dryly that if the deputy prime minister's words were "not to the taste of certain leaders," then that proved again that the opposition forces' support for the rule of law in the republic was "only words."

From http://www.rferl.org/ 08/22/2002

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Kazaks tan: The Senate Elections Will Take Place on 8 October, 2002

In Relation With The Expiry Of The Constitution Term Of Office Of The Senate Deputies, Elected In October, 1997, The Senate Deputies Elections Will Take Place On 8 October, 2002. The Order On The Elections Has Been Issued By Nursultan Nazarbaev, On 7 August, The Press Service Of The Head Of State Informed. According To The Decree, The Events Related With The Senate Deputies Elections Will Be Carried Out In Compliance With The Rules And Temrs, Established By The Constitution Law Of RK "On Elections In The Republic Of Kazakhstan". The Head Of State Also Instructed The Government Of RK, Akims Of Oblasts And Cities Of Almaty And Astana, To Take All Necessary Measures On Organising, Material And Technical, And Financial Provision Of The Senate Deputies Elections.

From Http://Www.Gazeta.Kz/ 08/07/2002

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Uzbek Parliamentary Committee to Gain More Powers

Work on documents and other issues submitted for the consideration of the forthcoming parliamentary session continues in the committees and commissions of the Supreme Assembly (Uzbek parliament). They are summing up their performance between the sessions as well, Uzbek TV reported on August 19.The decision of parliament's Supreme Council to convene the next parliamentary session has intensified the work of committees and commissions. The preparation of draft bills is being completed, taking into account the views of MPs. One of their important tasks is improving legislation. A great deal of work has been done by the members of the Committee for Legislation, Court and Legal Issues. For example, the work and tasks of the department for combating tax crime are similar to those of the law-enforcement agencies. However, the department's legal status does not allow it to implement its tasks in full. For this reason, "We are planning to introduce certain amendments and additions to a number of issues together with the law-enforcement agencies", said O. Olimjonov, the secretary of the Committee for Legislation, Court and Legal Issues. During the period between the sessions, the members of the committee have carried out a number of practical measures to explain the essence of the laws to our citizens and to improve their legal awareness. According to Olimjonov, the committee has studied the work of the agencies of the Prosecutor's Office of Uzbekistan, how they are promoting the work of small and medium-sized businesses and how they are protecting their rights. The results of the work have revealed that there are cases where the staff of the Prosecutor's Office are themselves often violating citizens' rights or are not paying proper attention. These issues were pointed out at the Prosecutor's Office, and the committee's decision is under strict monitoring. The members of the committee will propose a number of amendments and additions to the laws of the Republic of Uzbekistan on the protection of the environment, on the state cadaster, on the implementation of court decisions and the enactments of other bodies, as well as on the Code of Economic Procedure of the Republic of Uzbekistan.

From http://www.uzreport.com/ 08/21/2002

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Australia: Nelson Blueprint Rejected

UNIVERSITIES have rejected the Howard Government's radical plans to reform the higher education sector, including controversial voucher systems for students and full-fee deregulation. Less than three weeks after Education Minister Brendan Nelson released the Coalition's options for revamping student fees and how universities operate, the Australian Vice-Chancellors Committee has decided against all four new university fee schemes. The vice-chancellors have maintained a bedrock position that more federal funding is needed for universities, especially "transitional funding" so they can move from the current one-size-fits-all system to more flexible funding. AVCC president Deryck Schreuder believes an increase in federal funding to higher education is a "fundamental point", and total deregulation is not the answer. The vice-chancellors have categorically ruled out full-fee deregulation, and two of Dr Nelson's options involving voucher schemes. In a setback for the Government's reforms - which the Coalition had hoped to finalise before the end of the year - the universities want to put forward their own alternative fee reforms. Although the vice-chancellors have not finalised their alternative plan, it is most closely aligned with the Government's first option of changing the Higher Education Contribution Scheme for students. The universities are also defying the Coalition's argument that funding increases must come from "those who benefit" - students - and are demanding an increase in federal spending on higher education. Dr Nelson yesterday released his fifth discussion paper, Indigenous Australians in Higher Education, which proposes cadetships, mentoring programs and scholarships offering greater support and flexibility for indigenous tertiary students. The report says that while indigenous participation in tertiary education is improving, it is well short of that in the general community. The mainstream "does not naturally support" traditional indigenous approaches to learning, which need acknowledgment and support, the report says. Ways to achieve this included employing more indigenous teachers, counsellors and mentors. Other options considered in the report include:? A greater role for indigenous units and teachers within universities;? Extending the range of school and university courses on indigenous affairs to broaden awareness and combat racism, which was an impediment to tertiary study for Aboriginal people;? Encouragement for Aborigines to enter the professions, especially building, architecture, engineering and business, where they are under-represented, and;? An extension of block study courses in which students study for part of their time in their home communities. These are more successful in retaining students than on-campus courses. (by Dennis Shanahan and Jim Buckell)

From http://www.theaustralian.news.com.au/ 08/07/2002

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Crime the Big Election Issue: Survey

Public safety, health and education are the top three pre-election issues in Victoria, a Victorian Police Association survey has found. The survey of 400 people found policing and public safety would be a key issue at the next state election, widely tipped for December. Of those surveyed, 91 per cent believed that increasing police numbers was important for Victoria Police to be effective in tackling crime. The survey found more than half of those surveyed thought the overall crime rate was increasing while police numbers were decreasing. Victorian Police Association secretary Senior Sergent Paul Mullet said the survey was a wake-up call for both major parties in the lead-up to the state election, widely tipped for December. "The public recognises that the current government has made some progress on the issue of policing, but they also believe there's much more work to be done," Snr Sgt Mullet said in a statement. "Police numbers have only just returned to 1997 levels, now the public wants to see an increase in the physical presence of police within the community." The survey found the majority of those surveyed wanted better resourced local police stations and more police.

From http://www.theage.com.au/ 08/12/2002


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ACTU Backs Bonds for Public Projects

National and state government bonds, and not private capital, should be used to pay for essential infrastructure projects, ACTU president Sharan Burrow said yesterday. Ms Burrow told the national infrastructure conference that such government bonds, priced at, say, 0.25 per cent above the long-term bond rate (the cost to government of borrowing funds), could be sold to both institutions and working families. A welcome by-product of this approach would be the restoration of a government bond market, providing the nation's super funds with a sound finance alternative to buying even more offshore debt to balance their fixed-interest asset portfolios. Selling such bonds, coupled with initiatives to ensure more competition on management fees and advisory services, would also slash the returns of what she called "the 5 per cent club". It's the collection of institutional investors, lawyers, accountants, merchant bankers and other private-sector service providers who take what could be a public-sector infrastructure project and turn it into a private-sector commercial venture to provide the infrastructure and make a quid," Ms Burrow said. For private equity in private companies, the minimum risk-adjusted return "is what is achieved for listed equities plus 5 per cent . . . For private equity in infrastructure projects, that return is the long-term bond rate plus 5 per cent. Add to that the margin on debt financing and . . . one begins to get a feel for what the 5 per cent club does when the private sector gets involved in public infrastructure. Ms Burrow said public-private infrastructure projects kept the spending off the government's budget, even though the government could do the project itself at close to the long-term bond rate. This is a curious thing . . . The virtue of appearing to deliver 'small government' is seen to exceed that of obtaining the facility for the community at the best price, and with the highest standards of corporate governance and public accountability. By selling bonds, she said, the government would take responsibility for riskier projects instead of pretending it wouldn't bail out large-scale corporate collapses. (by Philip Hopkins)

From http://www.theage.com.au/ 08/15/2002

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Canberra Rules out Medicare Boost

The Federal Government has ruled out any immediate increase in Medicare payments despite claims by doctors that they have lost faith in the system, and are charging "gap costs" to patients with concession cards. Health Minister Kay Patterson rejected the Australian Medical Association's push for higher Medicare rebates for general practice consultations, saying her priority was to get more doctors into rural and suburban areas. Senator Patterson yesterday met AMA president Kerryn Phelps in Canberra to discuss issues affecting Australia's 25,000 GPs, including Medicare payments to doctors and the vexed issue of doctors' insurance. Dr Phelps emerged from the meeting and signalled that doctors had run out of patience with the government. "Doctors have lost their trust in Medicare to the extent that they are not prepared to tie themselves into a bulk billing arrangement if they don't believe that year by year Medicare would keep up with the cost of providing the services that they're providing," she said. Dr Phelps warned of dire consequences for bulk billing - the system where doctors bill Medicare directly for the consultation rather than charging the patient - unless the government acted quickly to increase rebates. "The bulk billing slide is inevitable and I believe that once doctors have abandoned bulk billing, they are unlikely to ever go back," she said. Yesterday's meeting came amid state health ministers' claims that the slide in bulk billing rates, combined with the shortage of after hours doctors' clinics, was putting unsustainable pressure on hospital emergency departments. Senator Patterson agreed to discuss these concerns with the state Labor health ministers. Bulk billing rates for GP consultations have fallen consistently over the past two years. In the March quarter of this year 74.5 per cent of GP consultations were bulk billed. But in the December quarter of 1999 about 79 per cent of GP consultations were bulk billed. Over 12 months this equals a drop of several million consultations. Senator Patterson admitted yesterday she was concerned that while some regions had access to many bulk billing doctors, other regions did not. She said this was due to a range of workforce issues. "The issue I am concerned about is making sure that bulk billing is as evenly distributed across the population as I possibly can. And one way of doing that is giving incentives to increase the number of doctors in the areas where we have insufficient doctors. That's rural areas, remote areas and outer metropolitan areas," she said. Medicare statistics indicate the vast gulf in bulk billing rates between different areas of Victoria. In the electorate of Murray, in Victoria's north, just 37.2 per cent of GP consultations were bulk billed in the March quarter. But in the high-income electorate of Higgins, held by Treasurer Peter Costello, 68.4 per cent of consultations were bulk billed. Dr Phelps also called on the government to review the number of health care concession cards issued. Senator Patterson said this issue had not been raised at yesterday's meeting but agreed to consider it. (by Darren Gray)

From http://www.theage.com.au/ 08/16/2002

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Fiji Customs House to Get $2.3 Million Upgrade

Fiji Islands Revenue and Customs Authority has announced plans for the F$2.3 million reconstruction of Customs House, next to Suva's port, a news release said. Director General, Customs Service, Tony O'Connor, said this is a major investment to improve efficiency and create a better professional environment for customers and staff.

From http://www.pacificislands.cc/ 08/20/2002

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Minister Supports New Fiji Trade Union Umbrella Body

Fiji Labour Minister Kenneth Zinck has thrown support behind the newly-formed Fiji Islands Council of Trade Unions, launched in Suva yesterday. The new body includes some of Fiji's biggest unions who have quit the long-established Fiji Trades Union Congress. Amongst requirements of their new body is that its officers must not be active politicians. Zinck, a former trade unionist, called it is a breath of fresh air. Zinck said he has not disregarded the Fiji Trades Union Congress, saying there is room in Fiji for two national centres of unions.

From: http://www.pacificislands.cc/ 08/25/2002

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Micronesian Presidents Consider Pacific Islands

The presidents of three North Pacific nations are considering the establishment of a new body including only Pacific islands countries and not Australia or New Zealand. Palau President Tommy Remengesau, Marshalls Islands President Kessai Note and Federated States of Micronesia President Leo Falcam discussed this during their presidents' summit held in Koror. They also discussed who should be the next secretary-general of the 16-nation Pacific Islands Forum, a job Australia is making a controversial bid for. The three leaders plan to meet again before next week's annual meeting of the Forum, which is being held in Suva, Fiji. They lead countries which are known as the Freely Association States and have what are called compacts of free association with the United States. All three were formerly part of the American Trust Territory of the Pacific. They do not have the close links some South Pacific states have with Australia and New Zealand. The three presidents also agreed to press the United States for an opinion from the American Department of State regarding the most favored nation clause in their respective compacts with America. The three leaders said if the United States were to invoke the clause upon the ratification of the Pacific Islands Forum trade agreements, it could cause revenue problems with imported U.S. goods. Concerns were also raised regarding the current focus of the Africa Caribbean Pacific (ACP) group of nations and the Forum toward trade issues rather than economic development. The presidents said trade is not the primary issue for their countries in the context of the Cotonou Agreement, the aid and trade partnership between the ACP and the European Union (EU).The leaders said economic development should be the focus. The three leaders said they will push for greater emphasis on economic partnership with the European Union. The presidents at the same time noted "difficulties" in gaining priority treatment under the Cotonou Agreement. The agreement has several clauses requiring special treatment related to the unique circumstances of islands states and small economies. The presidents said the unique issues of the Pacific islands should be considered and not only those of the Caribbean. The three leaders agreed that climate change remains a priority concern in the region. The Kyoto Protocol, which implements the climate change convention, is near implementation, requiring ratification of countries producing 55 percent of all greenhouse gases. (by Bernadette H. CarreonKoror)

From http://www.pacificislands.cc/ 08/06/2002

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Nauru Joins Bid for Forum Secretary-General Job

Nauru has joined the race for the top job at the Pacific Islands Forum Secretariat, that of secretary-general. The island state has submitted the name of its former finance minister, Vince Clodumar, and has begun lobbying member countries. Australia has already made public its interest in securing the job for its former Pacific diplomat, Greg Urwin, a move that has provoked increasing controversy. Yesterday the Suva-based NGO lobby group Pacific Concerns Resource Centre joined the current secretary-general, Noel Levi, in criticising Australia's move. Its director, Motarilavoa Hilda Lini, said the appointment of an Australian would threaten the future of the 16-nation organisation. The Australian move to have Mr Urwin take over when Mr Levi's term ends next year breaks a three-decade convention that the position is always held by Pacific Islanders. It has also raised questions about the Forum Secretariat's role as the regional certifying authority for the European Union-African, Caribbean, Pacific (ACP) group trade and development partnership. Australia is not a member of the 78-nation ACP group. Questions have been raised whether an Australian could fill the role of certifying officer on behalf of the Pacific ACP states. Meanwhile, Ms Lini said in a statement that Australia and New Zealand do not "really share our problems, our Pacific Way of thinking, and they could dominate discussions to the jeopardy of the islands." Australia's influence in the Forum up to now has severely weakened the position of island countries on political and environmental issues." She said these included the nuclear free zone, West Papua, and plutonium shipments through the Pacific. "Now Australia is trying to turn the Forum into its own little institution," Ms Lini said. The controversy is near certain to be informally discussed during this week's Pacific Islands Forum meeting in Suva. Australian Prime Minister John Howard is expected to continue lobbying for Mr Urwin to take over when Mr Levi's term ends next year. Mr Levi has upset the Australian Government by questioning its move to nominate Mr Urwin, a respected diplomat who spent most of his career working on Pacific Islands issues. Australia's High Commissioner in Suva, Susan Boyd, met Mr Levi and is believed to have delivered a blunt "please explain" message from Canberra. Mr Levi had said if Australia is seen to be trying to dominate the Forum it could lead to moves to form an islands-only organisation excluding Australia and New Zealand. Three North Pacific members - Federated States of Micronesia, Marshall Islands, and Palau - have already discussed such a possibility. They did do when their presidents met in Palau soon after news of the Australian move broke. Radio Australia quoted Australian Foreign Affairs spokeswoman Lyndall Sachs as saying: "It's ridiculous to suggest that having an Australian national as secretary-general would threaten the future of the Forum." And it's important to note that Australia has been a strong supporter of the Forum since its inception, and we currently fund about a third of its budget.

From http://www.pacificislands.cc/ 08/14/2002

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Niue Government Announces Jet Airline Service Breakthrough

The Niue Government says it is extremely pleased to announce "agreement in principle" with a regional airline for a jet service to Niue commencing in October. A formal contract, logistical and operational details, including airport services, have yet to be finalised. Details will be announced in due course, the government statement said. However, it said it expected there will be a northbound flight from Auckland each Tuesday, and a southbound flight from Niue each Saturday. Airfares will be very competitive, it said. The Niue/New Zealand Joint Consultative Group has been working arduously to secure a jet air service in order to reinvigorate Niue's tourism sector and to enhance general economic growth. This has now come to fruition, the statement said. It is also expected that the current turboprop shuttle air services to and from Niue from Tonga will be continued in some form, it said. Niue's vital tourism industry has struggled since the loss of a direct jet service between Auckland and Niue which had been operated by Royal Tongan Airlines. Royal Tongan had ended its own international jet services because of financial pressures. It switched to code-sharing on Air New Zealand flights between Auckland and Nuku'alofa. This meant tourists and Niueans going to Niue have had to fly to Tonga, and wait for the Royal Tongan turboprop flight to Niue. Visitor figures have plunged, hitting Niue's promising tourism industry. The island has two main hotels, and numerous guest houses.

From http://www.pacificislands.cc/ 08/03/2002

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New Zealand: End of Beginning Is Nigh for Government

The shape of the new Government could be unveiled today after Helen Clark holds a final round of meetings with the leaders of the Greens and United Future. Talks began last week after the election gave Labour 52 seats and Jim Anderton's Progressive Coalition two seats in the 120-seat House. They would need support from either United Future, with nine seats, or the Greens, with eight seats, to command a majority. Green co-leader Rod Donald said nothing had been finalised. He was optimistic that decisions would be reached by the end of the week. But the mood around Parliament yesterday was relaxed, suggesting most of the work had been completed. Helen Clark took a four-day skiing break in the South Island over the weekend while officials from the respective parties continued talks. She returns to Wellington early today, but none of the parties could yesterday say when talks would resume. The Prime Minister favours a minority coalition with the Progressive Coalition and has sought support from both United Future and the Greens. It is expected United Future will give a Labour-led Government an assurance of support on crucial confidence-and-supply votes for its three-year term. In return it will likely get the nod for its pet policy, a Commission for the Family. The Greens support much of Labour's programme but will vote against the Government if it lifts the moratorium on the commercial release of genetically modified organisms next year. The Labour caucus is expected to elect the Cabinet on Tuesday. Parliament is likely to resume on August 27. The Greens and United have been manoeuvring to cast each other in the worst possible light ahead of an announcement. United Future leader Peter Dunne on Monday said the Greens had "Stone Age" views and were holding a gun to the Government's head over the GM moratorium. The Greens, backed by the Council of Trade Unions, have criticised Mr Dunne's voting record. He has opposed most union and environment-friendly measures. He also voted against the Government on all confidence issues and against its Budgets. Mr Donald said unless Mr Dunne was going to "do a somersault" on policy, Labour would still have to rely on the Greens to pass many measures, whatever other arrangement were put in place. Parliamentary records show Mr Dunne opposed the early stages of 17 proposed law changes carried over from the last Parliament. Those included measures to: Allow the Kyoto climate change protocol to be ratified. Amend minimum wage laws. Allow minor convictions to be kept secret if a person stays out of trouble for 10 years. Rewrite the occupation health and safety laws and impose tougher fines on employers who do not comply. Give local government greater powers. Restructure TVNZ to allow it to meet the requirements of its new charter. (by Vernon Small)

From http://www.nzherald.co.nz/ 08/07/2002

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Clark Sets Up Govt with Good Faith, No Surprises Deal

Prime Minister Helen Clark today signed coalition and support agreements with two parties, setting up her new government for a three-year term in office. Those agreements rest on a "good faith and no surprises" foundation, and give Miss Clark an assured majority in Parliament on crucial confidence and supply votes. Labour is now in coalition with the Progressive Coalition Party and has a binding agreement with the United Future Party. The two agreements give the minority government 63 votes in the 120-member Parliament. Miss Clark, Progressive Coalition leader Jim Anderton and United future leader Peter Dunne signed the agreements in Parliament, pledging stability and good government for the next three years. The prime minister said she had informed Governor-General Dame Silvia Cartwright that she had formed a government, and Parliament would open on August 26. "The coalition agreement between Labour and the Progressive Coalition Party has the objective of providing stable government over the next term of Parliament," Miss Clark said. "The two parties will operate in government on a good faith and no surprises basis. "The Government and United Future will operate on a good faith and no surprises basis." Miss Clark confirmed that Mr Anderton would have a seat in Cabinet. He is expected to continue as Minister for Economic Development. United Future is outside the Government and Mr Dunne will not have a cabinet position. He said he had not sought one. The Greens, who have been in negotiation with Labour since the election, do not have any agreement with the Government but Miss Clark said discussions would continue so that a "collaborative working relationship" could be established. United Future's gains through the agreement are close consultation on legislation and swift progress on its core policies. Miss Clark said proposals for a Commission for the Family would be developed by the end of the year, and legislation would be passed on victims' rights and alternative funding options for roading. The Progressive Coalition has scored through recognition of the need for a comprehensive drug strategy policy, co-ordination of industry assistance and a balance between work and family responsibilities. There are "agree to disagree" provisions in both the agreements, but Mr Anderton and Mr Dunne emphasised there would be no unexpected moves which could destabilise the Government. Miss Clark, speaking at a press conference after the signing ceremony in Parliament's Legislative Council Chamber, said she was confident of achieving a working relationship with the Greens so the party could support legislation. She said the Government would not introduce legislation to legalise cannabis, something the Greens want. Mr Dunne said his party had delivered on its commitment to help provide stable government, and it had done that while preserving its independence by not being part of the coalition. "There may well be occasions where we differ. That is almost inevitable," he said. "But the processes we will operate under will ensure there are no surprises. The agreement is absolutely explicit." Mr Dunne brushed aside questions about the strong moral and religious views of some of his MPs. "I'm a mainstream, moderate person. People who know me know that it's very difficult to hijack me," he said. The make up of the Government, in terms of seats in Parliament, is that the coalition has 54 seats (Labour 52, Progressive Coalition two), with support from United Future which has nine.

From http://www.nzherald.co.nz/ 08/08/2002

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Clark Announces New Cabinet

Prime Minister Helen Clark has increased the size of her executive in a post-election reshuffle. The number of ministers outside Cabinet has grown from four to six and there will also be two under-secretaries. With 20 ministers inside Cabinet the entire executive will now number 28, up from 26. Miss Clark said the reshuffle was a relatively minor one with the major changes being reallocation of the portfolios of ministers who lost their jobs, and a swap in the transport portfolio. Miss Clark said she would consider a wider reshuffle further down the track in order to give most ministers more time to implement policy. The transport portfolio moves from Mark Gosche -- whose wife is seriously ill -- to Paul Swain. Mr Swain's commerce portfolio moves to Lianne Dalziel, and carrying on the chain effect her accident compensation responsibilities move to new Cabinet minister Ruth Dyson. Another new minister, Chris Carter, picks up the roles of conservation and local government. Both of these responsibilities were held by the former Alliance minister Sandra Lee who stood down at the election. Another newcomer to the Cabinet table, John Tamihere, takes on statistics, land information and youth affairs, which were held by other Alliance ministers. Broadcasting moves from Marian Hobbs to Steve Maharey. While a number of other portfolios are swapped around, the main feature of the change is an influx of newcomers to executive positions outside cabinet. Former whip Rick Barker becomes customs minister and holds associate portfolios in social services, employment and justice. Dover Samuels, former Maori affairs minister, moves up from being an under-secretary to become an associate minister to the minister of economic development as well as tourism minister. Progressive Coalition leader Jim Anderton holds on to the economic development portfolio. Backbencher Harry Duynhoven becomes an associate transport minister with responsibility for civil aviation and maritime safety. He will also be associate energy minister. West Coast MP Damien O'Connor will be an associate in agriculture, rural affairs, health and immigration. Two new parliamentary under-secretaries have also been appointed: Phillip Field who will work in the Pacific island affairs, social services and justice portfolios, and Mita Ririnui who will work with the ministers for Treaty of Waitangi negotiations, corrections and conservation.

From http://www.nzherald.co.nz/ 08/14/2002

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Clark Foresees President Role

Prime Minister Helen Clark yesterday linked the position of the Governor-General with New Zealand's constitutional future, saying that in her view there would one day be a president filling the role. Helen Clark was backing Governor-General Dame Silvia Cartwright, whose speech on sentencing has caused controversy. Opposition politicians on Monday accused Dame Silvia of wrongly involving herself in politics. Helen Clark said: "One of the challenges for us is we clearly are no longer a dominion of Britain where the Governor-General is exactly like the Queen. "I think we need to consider how the role of governor-general might evolve further. As you know, my view is that one day there will be a president fulfilling the kind of role the governor-general does."

From http://www.nzherald.co.nz/ 08/15/2002

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Treasury Secretary to Be New Reserve Bank Governor

Treasury Secretary Dr Alan Bollard has been appointed the country's new Reserve Bank Governor. Finance Minister Michael Cullen this morning announced the decision to appoint Dr Bollard, 51, to the position formerly held by Don Brash who resigned as governor in April so he could stand for the National party at the election. Dr Bollard was nominated for the role by the non-executive directors of the Reserve Bank. The nomination was accepted by the Government. "Although I am obviously very pleased that the board has chosen someone of such high ability, it was with mixed feelings that I accepted their recommendation because it means I will lose Dr Bollard as Secretary to the Treasury," Dr Cullen said. "He has been enormously successful in changing the culture of the Treasury into a more open and outward looking organisation and was always a pleasure to work with." Dr Bollard's appointment is subject to agreement on details of his employment contract and to the negotiation of a new Policy Targets Agreement (PTA) - the agreement between the Governor and the Finance Minister over how monetary policy will be run. The Government wants monetary policy outcomes to move closer to those of Australia, Dr Cullen said. That means he wants the RBNZ to be more flexible in implementing the bank's target of keeping inflation between zero and 3 per cent. The Reserve Bank Governor is appointed by the Finance Minister for a term of five years. Dr Bollard has been Secretary to the Treasury since February 1998. Before that, he was New Zealand Commerce Commission chairman and director of the New Zealand Institute of Economic Research. Dr Bollard has also worked as an economist in Britain and the South Pacific. Although appointed to Treasury while the National Party was in power, Dr Bollard has overseen a transformation in the Government's financial and taxation watchdog from a market-driven organisation to one that sees a much larger role for Government in financial affairs. Dr Bollard is married to investment banker Jenny Morel, one of the country's leading venture capital specialists. He was the first outsider appointed Secretary to the Treasury since World War 2. At the time of his appointment, he said he favoured incremental change rather wholesale, sudden change. Among those whom Dr Bollard beat to the job were the current acting governor, Rod Carr, and former deputy governors Peter Nicholl and Murray Sherwin. Others considered to be contenders include Reserve Bank chief economist David Archer, ANZ managing director Murray Horn and Deutsche Bank chief economist Ulf Schoefisch. Dr Cullen went on the offensive before the election, criticising the central bank for rigid operation of monetary policy by aiming for the mid-point of the 0 to 3 per cent inflation target. The New Zealand dollar remained virtually unchanged shortly after the appointment. It was sitting around US46.7 cents. Dr Bollard said his next step was to negotiate the PTA with Dr Cullen. The timing of his move to the bank had yet to be agreed with his employer, the State Services Commissioner. Dr Bollard would not make any comment on a possible relaxation of the PTA. "Until the Policy Targets Agreement is finalised, and my employment contract is signed, it would be inappropriate for me to make any further comment on any matter relating to the Reserve Bank Governor position," he said in a statement. (by Francesca Mold)

From http://www.nzherald.co.nz/ 08/22/2002

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Pacific Leaders Meet at Nadi for Commonwealth Democracy Roundtable

A Commonwealth Roundtable on Challenges of Democracy in the Pacific opens at Nadi tomorrow (Thursday) to promote "frank and informal discussions among leaders and parliamentarians." These are on how to help strengthen democratic processes and institutions in Commonwealth PacificIslands countries, Commonwealth Secretary-General Don McKinnon said. Heads of government and members of parliament of 11 countries will attend the Roundtable, which continues till Tuesday, a Commonwealth Secretariat news release said. Mr McKinnon, who arrived in Nadi yesterday, said: "The meeting will address important aspects of governance and democracy in these countries. "The debate will be wide-ranging, enabling the identification not only of specific issues but also of the way forward in taking action to address those issues." The Roundtable, organised by the Commonwealth Secretariat and hosted by the Fiji Government, will consist of: - a Preparatory Meeting on Thursday and Friday, attended by members of parliament from both the ruling and Opposition parties in participating countries, - and a Heads of Government Retreat on Monday and Tuesday. The outcomes of the Preparatory Meeting will be presented to the Heads of Government for consideration at their retreat. Mr McKinnon said: "The Roundtable is part of the Commonwealth's ongoing programme of activities to support democracy and strengthen democratic institutions in member countries. "It reflects the need to ensure that such institutions are appropriate to the specific national circumstances and regional characteristics of member countries, particularly small island states." The Commonwealth Secretariat news release said countries participating in the Roundtable are: Fiji Islands, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Of these, all except Papua New Guinea will be represented by their Heads of Government, the news release said. Cook Islands and Niue, self-governing countries in free association with New Zealand, will also participate, it said. While in Fiji Islands, Mr McKinnon will also attend the Pacific Islands Forum taking place in Suva Thursday to Saturday. He will inform Forum leaders of: - the Commonwealth's activities to promote democracy across its 54-country membership, - its work in supporting the 32 members classified as small states, - and new initiatives in the Pacific region.

From http://www.pacificislands.cc/ 08/14/2002

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Papua New Guinea: Sir Michael Somare Back in Power to Tackle PNG's Big Challenges

Sir Michael Somare, the man who led Papua New Guinea to independence, swept back into the prime minister's job today. Sir Michael was elected by a vote of 88-0 with no one standing against him. Outgoing prime minister Sir Mekere Morauta, admitting that he had no hope of retaining power, had stepped aside as leader of his own party the day before. Another former prime minister, Bill Skate - who played a key role in putting together the Somare-led coalition - was easily elected Speaker by 68 votes to 35.With 103 members eligible to vote, 52 was enough to elect the new prime minister. Sir Mekere and his remaining supporters abstained from the vote for prime minister. The Somare-led government is expected to quickly appoint a nine-member caretaker cabinet, adjourn Parliament for three weeks and start planning for a tough supplementary budget. Sir Michael indicated at the weekend that the past government had overspent by hundreds of millions of kina. "It's going to be tough economic times,'' he said. He indicated his government would try to fulfil the free education payments - introduced by the Morauta Government - for the rest of this year and then review this. Other big spending plans of the Morauta Government up for review are the Yumi bridge project and the Gaming Control Board. Public service recruitment could be frozen. Sir Michael denied his National Alliance-led government would change the One-China policy, saying speculation that Taiwan would be recognised alongside Beijing were groundless. Foreigners who asked about it did so "because I happen to be a friend of the Taiwanese'', he said. Last-minute tactics to influence the voting continued right up to 10am, when the 103 MPs-elect began filing into Parliament. The major switch occurred yesterday afternoon when Sir Mekere told a news conference he was stepping aside as leader of the People's Democratic Movement. He said under his leadership, the party had not been able to muster the numbers to form government. "Under me, that's not possible,'' a terse Sir Mekere told reporters. He had lost many key supporters during the elections. A group of 11 independents were up until last night still adamant they would force the election of the prime minister to go into the second phase. The independents - led by governors Tim Neville (Milne Bay), Clement Nakmai (West New Britain) and Mal Kela Smith (Eastern Highlands) - said they had a total of 11 independents and nine one-man party members in their camp.On Sir Mekere resigning, Mr Smith said; "Sir Mekere's resignation was a surprise. I don't think it was premeditated on our part. We didn't know anything about it.'' Armed police ringed the Parliament grounds, inside and outside, to ensure the starting of the seventh Parliament was not disturbed. This was after elections marred by violence and intimidation in some Highlands provinces. The Defence Force is on callout and can be brought in to help if the police see the need. Members of the public were advised to stay away from Parliament as only invited guests were to attend and witness the proceedings from the public gallery. Proceedings were broadcast on Karai radio and televised live on EMTV.

From http://www.pacificislands.cc/ 08/05/2002

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Somare Sets up 2 New Ministries to Revamp Government

Inter-government Relations and Internal Security are new ministries announced by Prime Minister Sir Michael Somare yesterday in his 28 Cabinet ministries. The former ministry of Provincial Affairs and Local-Level Governments becomes the new ministry of Inter-Government Relations headed by Madang MP Sir Peter Barter. Police will now come under a new Internal Security Ministry headed by new MP Yawa Silupa. Sir Michael said Bougainville Governor John Momis and himself had brought decentralisation into the system of government in the country.However, since then, although successive governments have tried to make it work, more work remained to be done, he said. He said his Government will see decentralisation move to new heights. The establishment of the autonomous Government of Bougainville has widened the opportunities for Papua New Guinea to mobilise her people in the development of the country, he said. On security, he said: "Law and order problems of all types threaten our people and our country." We must be prepared and vigilant in securing a safe society for all. The work of making our communities safe belongs to every citizen. "All Government institutions must rise to bring law and order problems under control. The ministry of police will be replaced by the ministry of internal security." At the same time as we respond to law and order problems, we must also act responsibly at all levels to make our society safe. "The challenges facing the country today needs every Papua New Guinean in every province and every region to work together." Sir Michael's Cabinet includes 19 new MPs. The list also includes senior MPs like Lady Carol Kidu, Sir Rabbie Namaliu, Andrew Baing, and Sir Peter Barter. Sir Michael said names had been recommended to him by political party leaders and he had invited the Ombudsman Commission to screen the proposed Cabinet line-up. "I excluded a few leaders who have already been referred by the Ombudsman Commission," Sir Michael said. Lady Carol, the only woman in Parliament, takes up the ministry of Welfare and Social Development. Former prime minister Sir Rabbie Namaliu heads Foreign Affairs and Immigration. The Cabinet is: 1. Sir Michael Somare- Prime Minister; 2. Dr Allan Marat - Deputy Prime Minister and Minister for Trade and Industry; 3. Lady Carol Kidu - Minister for Welfare and Social Development; 4. Bart Philemon - Minister for Finance and Treasury; 5. Puka Temu - Minister for Public Service; 6. Sinai Brown - Minister for National Planning and Monitoring; 7. Patrick Pruaitch - Minister for Forestry; 8. Sir Peter Barter - Minister for Inter- Government Relations, 9. Michael Laimo - Minister for Education, 10. Don Polye - Minister for Transport and Civil Aviation, 11. Sasa Zibe - Minister for Environment and Conservation, 12. Yawa Silupa - Minister for Internal Security, 13. Alphonese Moroi - Minster for Science and Technology, 14. Mark Maipakai - Minister for Justice; 15. Robert Kopaol - Minister for Lands and Physical Planning; 16. Andrew Baing - Minister for Fisheries; 17. Alois King - Minister for Culture and Tourism; 18. Peter O'Neill - Minister for Labour and Industrial Relations; 19. Peter Oresi - Minister for Correctional Services; 20. Moses Maladina - Minister for Agriculture and Livestock; 21. Gabriel Kapris - Minister for Works; 22. Ben Semri - Minister for Communication and Information; 23. Yarka Kappa - Minister for Defence; 24. Melchior Pep - Minister for Health; 25. Sir Moi Avei - Minister for Petroleum and Energy; 26. Sam Akoitai - Minister for Mining; 27. Sir Rabbi Namaliu - Minister for Foreign Affairs and Immigration; 28. Yuntuvi Bao - Minister for Housing. (by John ApamiPort Moresby)

From http://www.pacificislands.cc/ 08/15/2002

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Tonga Plans Revamp of Century-Old Local Government System

District and town officers from throughout Tonga's main island, Tongatapu, have been meeting to discuss ways to reform the kingdom's system of local community government. Chief Secretary 'Eseta Fusitu'a, who chaired the meeting, said: "We have had the same local government structure for over a century, and it simply no longer solves the needs of our local communities." This will not be an easy task. But with the help of all the stakeholders involved including local village leaders, women's groups, NGOs, youth groups and others, we will have a local governing structure for which we are all proud. "The district and town officers explored ways of devolving the management of local affairs to the villages and districts, a Tongan Government news release said. This is so that they can more efficiently and effectively solve their individual community needs, the news release said. Ms Fusitu'a added: "This is not something that can be accomplished overnight, nor is it a structure that can be copied from another state or region." Tonga is wonderfully unique and the view of the meeting was to take the special qualities and values that make Tonga the wonderful country it is, and to add to it the best of what we find in others."

From http://www.pacificislands.cc/ 08/12/2002

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Tuvalu Mps Elect New Prime Minister

Members of the new Tuvalu parliament have elected Saufatu Sopoanga as the country's new prime minister - by just one vote. Sopoanga, who was finance minister in the outgoing Talake administration, defeated Amasone Kilei by eight votes to seven.Maati Toafa has been elected deputy prime minister and also holds the portfolios of Works, Communications and Transport. Tuvalu does not have a formal party system. But MPs with similar views and policies group together.

From http://www.pacificislands.cc/ 08/03/2002

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Vanuatu Crisis

Five senior government officials plus members of the Vanuatu Police Service Commission have been released on bail after a day of drama in Port Vila. Fifteen people, including Attorney-General Hamilson Bule, were arrested in an early-morning operation yesterday on allegations of conspiracy in the appointment of new Police Commissioner Apisai Mael.During a brief hearing last night, the Magistrate's Court said that since all 15 are being charged with the same count, they should be released. This even though police officers requested at least two be kept in custody. The commander of Vanuatu's Police Mobile Force, Abby Jack Marikembo, said the arrests were mainly to force the authorities to review the appointment of the new commissioner, a former police officer. Meanwhile, the President of the Malvatumauri Council of Chiefs, Tom Numake, has appealed for calm. The chiefs are understood to have been involved in negotiations during the day. The new commissioner, attorney-general, police commission members, and some senior government officials were believed to have been taken into custody. They were believed detained in an operation masterminded by senior officers from both the ordinary police and the paramilitary police. The new police commissioner is said to have been terminated six years ago on health grounds. Earlier, the head of a panel set up to choose the police commissioner said its recommendation had been ignored. Janey Ligo, who is also the head of the Vanuatu Council of Women, said the chairman of the Police Service Commission, Michael Taun, had bowed to political influence. The panel was set up so that the process would be seen to be transparent but Ms Ligo said Mr Taun had withheld information. She was earlier quoted as saying: "When he refused I knew the person was not a person we had chosen, because at the start we seemed to have a very good relationship and then very slowly - after we had given him the report - he seemed to keep a distance from me. "I'm not impressed by what he has done because he has ignored us and we have done a lot of work selecting a police commissioner." Mr Taun earlier said the successful applicant is being appointed strictly on merit. The person appointed will be expected to carry out the duties of commissioner without fear or favour, he said.

From http://www.pacificislands.cc/ 08/05/2002

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Samoa Sets Up New Agency to Plan Development

A new agency that will plan the future face of Apia, and probably the whole of Samoa as well, has moved into its new headquarters. The Planning for Urban Management Agency (PUMA) has staff from the departments of lands, surveys, and environment assigned to it. Newly appointed Assistant Director Taulealeausumai La Vasa said the vision of PUMA is to create a well-planned town and country with the agreement and cooperation of all stakeholders. "Samoa needs to have that planning mechanism," Taulealeausumai said, "and PUMA has become just that." There are three parts of PUMA, Urban Management, Sustainable Development and Strategic Development. "That means that PUMA will plan development and at the same time try to protect the environment," he said. Taulealeausumai said PUMA also has projects, which include climate change, waste management and pollution control. He explained the role of PUMA as a "regulatory agency" and said they do not build but plan. Taulealeausumai said that their main way of protecting the environment as well as planning good towns is by applying principles of sustainable development. "Our role is to create balance between all stakeholders," he said. Asked about some of the changes PUMA will make to the town of Apia, he said: "We are looking at car parks, recreation parks, housing and improved drainage, sewerage, basic sanitation and transportation. "We will plan in a way to sustain the environment."

From http://www.pacificislands.cc/ 08/24/2002

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APEC Holds Seminar on Female Entrepreneurship

Asia Pacific Economic Cooperation (APEC) conducted a two-day seminar on female entrepreneurship this week in Taipei, attended by over 140 participants from 16 of the forum's economies, including Canada. The agenda covered topics such as access to capital and promotion of education for women. The conclusions of the seminar will be presented at the Women's Ministerial Meeting from September 28-29 in Guadalajara, Mexico.

From Central News Agency (Taiwan, China) 08/08/2002

ADB to Organise a Series of Consultation Workshops with NGOs

PHNOM PENH, CAMBODIA - The Asian Development Bank (ADB) is organizing a series of consultation workshops in Phnom Penh with the NGO community with the view to strengthening partnerships among ADB, NGOs, and Government. The national workshop on ADB-NGO and government cooperation, was organized jointly with SILAKA, a local NGO, on 19 August 2002. The workshop is part of a twelve-country exercise to meet with NGOs, Civil Society Organizations (CSOs) and Government representatives, to discus effective ways for promoting ADB and NGOs/CSOs cooperation. A sub-regional workshop will involve representatives from NGOs and Government officials from Cambodia, Yunan Province of the People's Republic of China, Laos, Myanmar, Thailand, and Viet Nam. The workshop will be held on 21-22 August 2002. An information workshop on ADB's flagship initiative on the Greater Mekong Sub-region (GMS) Program for Economic Cooperation will also be held on 23 August 2002. ADB realized the need for cooperation with NGOs in the early 80's. The first NGO coordinator was appointed in mid 80's, and ADB developed a policy on ADB-NGO cooperation in 1987. This policy was subsequently revised in 1998. In 2001, an NGO Center was created to help ADB more effectively interact with NGO partners. ADB seeks to integrate NGOs/CSOs' experience, knowledge, and expertise into its operations so that its development services are more effective, sustainable and of higher quality. ADB's dedication to poverty reduction as its overarching objective requires ever-greater attention to the benefits that can be gained by strengthening ADB-NGOs/CSOs and Government cooperation. Specifically, ADB recognizes the need for improved mechanisms to strengthen ongoing communication between ADB and NGOs/CSOs and its developing member countries.The outcomes of the workshops will be the basis for the elaboration of a medium term strategy and action plan for ADB for 2003-2005, which will include mechanisms for improved and enhanced partnerships.

From http://www.adb.org/ 08/20/2002

ADB's Training Seminar Emphasizes Development

Dhaka, Bangladesh - The two-day Management Training Seminar on Involuntary Resettlement organized by the Asian Development Bank and held at the Bangladesh Resident Mission (BRM) was concluded on 12 August 2002. The training seminar was widely participated by major infrastructure and other Government agencies, including Roads and Highways Department, Bangladesh Water Development Board, Bangladesh Railway, Gas Transmission Co. Ltd., Ministry of Land, Ministry of Planning (IMED), related national and international consultants and prominent NGOs. Dr. Mohammad Zaman, ADB's staff consultant and social policy and resettlement specialist conducted the training seminar. In his welcome address, Toru Shibuichi, ADB Country Director mentioned that the training program was a very important milestone in terms of capacity building efforts in resettlement, social development and safeguard in ADB-assisted projects in Bangladesh. Involuntary resettlement associated with ADB projects presents certain risks. For example, people lose their lands, homes, jobs, income sources, and generally their way of life. Unless adequate measures are taken to assist them in resettlement and rehabilitation, development projects have in the past led to impoverishment of the affected people. ADB's Involuntary Resettlement Policy was adopted to (i) address this impoverishment and (ii) safeguard the economic, social and cultural lives of the resettlers. Mr. Shibuichi stressed that "The development community increasingly sees impoverishment of the affected people as unacceptable. We believe that good resettlement plans can prevent impoverishment and poverty of the affected people by turning displacement into development opportunities. Thus, people affected can also share in the benefits of development." The seminar was very interactive and participants from the government agencies and NGOs shared their experience encountered in the field during implementation of resettlement plans. The participants largely recognized the gaps between the requirements of ADB and other donor agencies, and actual practices in the field with respect to implementation of involuntary resettlement plan. The need for narrowing down the gaps by enhancing awareness among the Government executing agencies and policy makers was emphasized by the participants. These anomalies should be adequately bridged by formulation and implementation of a National Policy on Involuntary Resettlement. The participants agreed that once the national policy is in place, uniformity of Government's perception, plans and actions to adequately address the resettlement issues encountered in infrastructure projects would be ensured. The participants expressed their view that ADB should come forward, as it has done for Sri Lanka, with an advisory technical assistance under its grant financing scheme to assist the Government of Bangladesh to formulate, adopt and implement a National Policy on Involuntary Resettlement.

From http://www.adb.org/ 08/21/2002

FAPAD Discusses Improving Audit Quality with Staff of ADB-Assisted Projects

DHAKA, BANGLADESH - A joint meeting of Foreign Aided Project Audit Directorate (FAPAD) and Project Directors of the Asian Development Bank (ADB) assisted projects was held on 7 August 2002 at the conference room of LGED Bhaban, Agargaon, Dhaka. The meeting discussed audit requirements, audit observations on project accounts and financial statements, accounting practices, and various problems with an overall objective to improve accounting and auditing practices as well as the quality of audit reports. The Bangladesh Resident Mission of ADB facilitated the meeting in order to improve quality of the audit exercise and to lessen the number of audit queries in the auditors' report. About 72 participants from FAPAD, ADB-assisted projects, and ADB attended the discussion meeting. The FAPAD team, led by Mr. Md. Motaher Hussain, Director General, gave a keynote presentation providing guidance to the Project Directors in observing essential accounting practices as required by the Government and ADB. Toru Shibuichi, ADB Country Director, addressed the business session and stressed the need for maintaining proper project account, its audit by the authorized audit agency of the Government, and submission of the audited account to the ADB within the stipulated time. This requirement is an integral part of each Loan Agreement for any ADB-funded project for ensuring transparency, accountability, and prevention of fraud and corruption in the use of the loan proceeds. ADB strictly enforces compliance with this requirement as part of its current efforts to promote good governance in project implementation. Failure to submit the audited project accounts by the given deadline would result in the suspension of loan disbursement, which, in turn, would adversely disrupt project implementation. Head of ADB's Portfolio Management Unit in Dhaka, Charoen Bunchandranon, also spoke in the meeting. In the keynote presentation, Director of FAPAD, S.M. Aminul Haq emphasized that auditing of project accounts is intended to assure that financial resources from the Government and donors are being managed in accordance with financial regulations, rules, practices and procedures to achieve project objectives. He stressed that proper and timely auditing of project accounts is essential for ensuring transparency and accountability in project expenditures. Project accounts must be maintained in a transparent and auditable manner acceptable to international accounting standards. These are key elements of good governance. FAPAD has recently improved timeliness in submitting audited project accounts and now seeks to improve the quality of audit. It was discussed and agreed that recurrence of common audit observations, such as violation of financial disciplines, misuse of money, and unauthorized expenditures would be minimized, and the number of pending audit observations, which at present is very high compared to international standards, would be reduced through tripartite discussions among FAPAD, Project Directors, and concerned Ministries. The meeting also ascertained that both FAPAD auditors and projects' accounting staff need training to improve skills in their respective fields. ADB assured the participants to financially assist in the training through ongoing and forthcoming projects.

From http://www.adb.org/ 08/22/2002




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China: Mayors Score Well in First Popularity Test

Mayors in China have received an unofficial vote of confidence. In a new poll, more than 65 per cent of Chinese citizens said they would choose to vote for their current mayors should the candidates be put forward in a direct election. The in-house survey, conducted by Horizon Research, an independent market-research firm, was conducted among 3,404 citizens aged over 18 in eight cities including Beijing, Shanghai, Guangzhou, Wuhan, Chengdu, Xiamen, Shenyang and Zhengzhou. This is the first time that the popularity of mayors has been tested across China. About 80 per cent of those surveyed know whom is the mayor of the city they reside in. And more than 70 to 90 per cent praise their mayors as "honest, fair and incorruptible". But the survey also shows that many feel Chinese mayors should improve the transparency of their governance. More than 40 per cent claimed they knew nothing about their mayors' governance strategy. And more than 10 per cent said they are in disagreement with their mayors' governance. Besides, the survey shows that mayors should enhance their "personality glamour" and improve their public image, instead of routine exposure by attending televised meetings. "Mayors should learn to make their speeches both interesting and understandable for the public, not simply offering empty formulae and verbiage on the stage," said Yuan Yue, director of Horizon Research. Yuan said most mayors are still used to simply focusing on how to better implement the tasks from central government, instead of telling citizens what is their own thinking in governing the city. "Such lack in their own personalities will surely lead to a deficit in their public images," said Yuan. According to Mao Shoulong, director of the department of public administration of Renmin University in Beijing, the surveyed "popularity rate" is far below "what it should be", with current extensive exposure of these mayors through local newspapers and television. "This ratio also proves that much of our propaganda is ineffective and requires better improvement," said Mao. The survey was conducted by asking citizens to comment on four categories relating to mayors, namely their governance strategy, governance performance, their public image and personality styles.

From http://www1.chinadaily.com.cn/ 08/20/2002

China Enhances Food Safety Efforts

The misfortunes of China's mooncake industry last year have highlighted the country's growing concern over food safety. Mooncakes are traditional Chinese delicacies, served and consumed mostly around the Mid-Autumn Festival. Last year, the whole sector was blemished by one producer's use of stuffing after its use-by date. With this year's festival drawing near, the industry is striving to restore consumer confidence. Media reports claim that a national standard on stuffing is to emerge within the year, and hotlines have been set up in many places for consumer complaints. The concern over food safety looms large not only in the mooncake sector, but in all levels of Chinese legislatures, governments, and food industries, which are taking active measures to standardize food production and circulation. The National People's Congress, China's top law-making body, has launched two nationwide campaigns to check the enforcement of the Law of Food Hygiene, which came into force in 1995. To facilitate enforcement, the Ministry of Health has promulgated more than 90 statutes and regulations, laying down requirements on raw materials, packaging materials, containers and penalties for violation. Paying more heed to food-source management, China also enhanced the legislation on farm cultivation and livestock breeding, and has so far issued 10 regulations on pesticides, feed and slaughtering. Local governments throughout the country have also promulgated more than 180 ordinances to enhance food management. China has established a thorough food monitoring and technical safety system, according to the Ministry of Health. The country boasts 100,000 food-sanitation supervisors and 200,000 back-up technicians. Statistics from the Health Ministry show that Chinese food-monitoring administrations conducted 14.44 million sanitation spot inspections last year, covering 98 percent of the country's food production and sales sectors. Last April, the Ministry of Agriculture initiated a program to promote uncontaminated food, which sets out a goal to improve the overall quality of farm products markedly within the next eight years, and to control such problems as pesticide residue and food contamination caused by noxious materials, including heavy metals. An implementation suggestion for the program is available to the public. The Ministry of Science and Technology has invested 200 million yuan (US$24 million) into research of key technologies concerning food safety. China has listed the program among the nation's 12 significant high-tech research projects during the 10th Five Year Plan period (2001-05). While the government enhances its supervision, food companies have been improving their self-discipline. Yurun Group, a giant meat processor that boasts 22 branches throughout China, has taken sanitation as the top requirement of product quality. Huangpu township in southern China's Guangdong province has a tradition of producing roasted meat. To guarantee the quality and safety of their products, local enterprises have formed a guild so that members can keep a strict eye on their fellow producers. "Only by constantly renovating can the mooncake industry provide consumers with healthy and safe products," said Liang Huapeng, deputy director of the development department of the Guangzhou-based Likoufu food company.

From http://www.atimes.com/ 08/23/2002

Japan: Diet Stood in the Way of Reform

The 192-day regular Diet session that ended on Wednesday will be remembered more for what it did not achieve than for what it did. In brief, it failed in two critical areas: political reform and economic revival. While politics bogged down in a quagmire of corruption, deflation dragged on, with no recovery in sight. It was a scandal-wracked session that saw a number of bigwigs fall in disgrace. Mr. Muneo Suzuki, a former Liberal Democratic Party power broker, was arrested and indicted. Mr. Koichi Kato, former LDP secretary general, was effectively ousted from the Diet, as was Mr. Yutaka Inoue, former president of the Upper House. In another dramatic reversal of fortune, Ms. Makiko Tanaka, the nation's first female foreign minister, lost her job as her aggressive attempt to shake up the ministry backfired in the face of a bureaucratic revolt. She suffered further blows from a pay scandal involving her legislative secretaries, becoming a fallen idol in the process. The Diet, to be sure, passed a bill putting more teeth in the anticorruption act. It also enacted legislation banning bureaucratic meddling in public works projects. However, these measures do not make the grade; they merely scratch the surface of what is truly needed. Indeed, the Diet may be criticized for giving political reform a bad name. Not only has it done little to set tough rules aimed at cleaning up politics, it has also demonstrated a reluctance to unravel misconduct within its own ranks. The result is increased public cynicism toward politics. The Diet has also dismayed a public anxious for a better life. The economy essentially remains where it was in late January when the session opened. Although the government says the worst is over, bad news abounds. Unemployment is stuck at a record 5.4 percent, with 3.7 million people out of work. Suicides have topped 30,000 annually for the past four years. Prime Minister Junichiro Koizumi keeps saying "No reform, no recovery," but people are tired of hearing that mantra. As yet there are no signs of a solid recovery, and much of the blame for this falls on the slow progress of economic reform. The Diet has fallen short in other ways. Consider health insurance reform. Premiums and medical fees have been raised to cover the growing deficit, but absent an integrated reform plan, these price increases are seen as a makeshift attempt to make ends meet at the expense of the insured. By the same token, reform is hardly the word to describe the postal deregulation package. Mail delivery, savings and life insurance will come under the control of a new public corporation next April, but the postal behemoth will remain just as strong. There is no road map for privatization, a top item on Prime Minister Koizumi's reform agenda. Two important proposals have been put on hold because of strong objections from opposition parties as well as a large segment of the public. One involves military emergency legislation designed to deal with a direct attack on Japan, specifically large-scale aggression from abroad. The other is meant to protect personal data from abuse. Opposition has mounted primarily because these bills are riddled with problems. The military package includes no measures against large-scale terrorism and no rules for civilian protection. The privacy bill, on the other hand, includes dubious media regulations that could undermine freedom of expression. These are serious flaws that cannot be removed through half-hearted revision. Legislative battles almost always involve political infighting. This seemed to be the case particularly in the last session. While the power struggle in the LDP intensified, the tug-of-war between the ruling and opposition parties likewise escalated. There were discernible signs of a political storm brewing. Perhaps the most significant sign was the changing power balance between Mr. Koizumi and the LDP old guard. As his popularity plummeted, Mr. Koizumi was reduced to fighting an uphill battle against antireform forces. It is not difficult to imagine what will happen to his administration if he continues to make compromises. The prime minister seems determined to carry out his reform plans. But the problem is that he is rapidly losing his most precious political capital: public support. An increasing number of people are disappointed in him, feeling that the reforms he speaks of are nothing more than a mirage. In fairness to him, however, it must be said that the Diet also shares blame for the lack of progress. Reform, be it political or economic, will not begin unless the Diet approves it. Instead of embracing change, the latest session seemed to stand in its way.

From http://www.japantimes.co.jp/ 08/02/2002

Korea: Ministry to Introduce Foreign Agricultural Trainee System

In a move similar to that found in industrial sectors, the Ministry of Agriculture and Forestry plans to implement a foreign trainee system in the agricultural sector from the end of this year, the ministry said yesterday. The ministry said it will introduce the system in November after discussion with relevant government agencies. Approximately 5,000 foreign agricultural trainees are to be invited, with priority given to ethnic Koreans living in Uzbekistan, Kirgizstan and China. Trainees will be employed in the gardening, pig and poultry farming sectors for three years, including one year of training, the ministry said. The ministry has asked the National Agricultural Cooperative Federation to oversee the foreign trainees and the Rural Development Administration and other related agencies to take charge of their training. "We are speeding up preparations for the introduction of the system, with the relevant regulations expected to be drawn up by September," a ministry official said. He added that given the selection procedures for the foreign trainees, they will likely begin working in Korea from early next year. (by Yoo Cheong-mo)

From http://www.koreaherald.co.kr/ 08/01/2002

President Kim Calls for Expanded Public Election Management System

President Kim Dae-jung urged the political community yesterday to revise the election law promptly in order to put an end to high-cost, irregularity-prone election campaigns. "For transparent campaign financing and low-cost elections, we have to greatly expand the public election management system," Kim said in a Liberation Day speech read by acting Prime Minister Chang Dae-whan. "For this purpose, the political circle should develop such institutional devices at an early date," the statement said. Kim, who is recovering from pneumonia, did not attend the ceremony to celebrate the nation's liberation from Japanese colonial rule in 1945, which was held in Independence Hall in Cheonan, South Chungcheong Province Saying the government declared this year as "the first year of an advanced election culture," the President reiterated his will to see that the December presidential election is carried out justly. Kim also said that the government will no longer issue state bonds from next year by achieving a fiscal balance and establishing a sound fiscal foundation. He said the government will work out detailed plans to recover the public funds that were injected into ailing companies during the past financial crisis. "These tasks are necessary to strengthen our economic viability and ease the burden on the next administration," the President said. On inter-Korean relations, Kim stressed the need for South Korea to push ahead with its engagement policy toward North Korea and for the two Koreas to observe the inter-Korean summit pact made in 2000. "The policy of reconciliation and cooperation between South and North Korea should be maintained for lasting peace and stability on the Korean Peninsula," he said. Saying that the two Koreas reached some "meaningful" agreements at the inter-Korean ministerial talks that ended Wednesday, Kim said, "What is important is carrying them out."

From http://www.koreaherald.co.kr/ 08/16/2002

N Koreans in China to Study Banking System

North Korea has dispatched a delegation of central bank officials to study China's financial system and commercial banking in one of the first signs that Pyongyang may be considering financial reform. The delegation, which comprises eight people from the upper echelons of the North Korean central bank, arrived in Beijing this month and was scheduled to spend three months in seminars and on-the-job training at each of China's "big four" state banks, Chinese banking officials said. The study tour was supposed to be confidential, in keeping with Pyongyang's preoccupation with secrecy and its aversion to foreign advice, the officials said. A spokesman for the People's Bank of China (PBOC), the central bank, said he had not heard of the delegation. The PBOC is the delegation's host organisation. "They are keen to learn," said an executive at one of the big four. "But it feels a bit strange for us as we are students of financial reform too. The student has become the teacher." Questions asked by the North Koreans had touched on rudimentary notions of commercial banking, including how many customers a bank branch would need to justify its existence, one Chinese banker said. The big four state banks are Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Little is known about North Korea's banking system but the Chinese bankers said it seemed clear from the questions asked that the country had not yet taken its first steps to set up a commercial banking system. Nevertheless, the duration of the stay in China and the thorough nature of the study programme requested by Pyongyang suggested that financial reforms are under serious consideration in the world's last Stalinist state. The visit comes after North Korea, goaded by grinding poverty, took its first clear step toward economic reform last month, scrapping its state rationing system for a more market-based way of distributing goods. It abolished the state-issued coupons that people used to buy goods, diplomats in Pyongyang have said. Farmers and enterprises, previously funded by the state, must now collect revenues from customers in cash. Workers' salaries have been increased to give them purchasing power and to encourage productivity. There are signs in Beijing of increased trade. The streets around the North Korean embassy throng with shops displaying signs in Korean script, doing a substantial trade with Korean nationals who take home products such as fridges, televisions and garments for sale on Pyongyang's black market. On the streets of Pyongyang too signs of private ownership are starting to spring up. Residents have learned to tell a privately owned car by the colour of its number plate. (by James Kynge)

From http://news.ft.com/ 08/27/2002




 

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Remain Hardworking or Lose Out, Malaysians Told

LANGKAWI: Malaysia will lose out if it fails to continue to be hardworking, develop meritocracy and be competitive. In issuing the word of caution, Commonwealth Partnership for Technology Management (CPTM) corporate member Tan Sri Dr Ramon V. Navaratnam said: "We have to learn that if we do not continue to be vigilant and hardworking we will lose out.'' "Malaysia has come a long way but we also have a long way to go. "As such, we have to constantly struggle to improve ourselves, otherwise we can slip and get back to the status of poor nations. "This is the lesson we should be reminded of through the dialogues in Langkawi International Dialogue 2002,'' he said in his comments at the close of LID 2002. CPTM and Malaysian Industry-Government Group for High Technology (MIGHT) are co-organisers of LID. Dr Navaratnam, who is among the moderators in the dialogue sessions, said Prime Minister Datuk Seri Dr Mahathir Mohamad's caution on a need for poor and developing countries to be vigilant about "economic terrorism'' was well received by the participating heads of states. "It is not only militant terrorism which is dangerous. What is even more 'lethal' is economic terrorism. "If one can solve economic terrorism then one can practically solve militant terrorism,'' he said.

From http://thestar.com.my/ 08/04/2002

English - Cabinet to Study All Counter-Proposals

Kuala Lumpur: Prime Minister Datuk Seri Dr Mahathir Mohamad said the Cabinet will study counter-proposals on the move to teach Science and Mathematics in English. "We'll study everything," he said after attending the final of the F1 Powerboat World Championship at the Mines Resort City, near here, Sunday. Asked when proposals would be studied, the Prime Minister said: "I don't know yet, but we'll study." He was asked to comment on several counter-proposals made on the proposed teaching of the two subjects in English from next year, including from Barisan Nasional (BN) component parties. On Saturday, Gerakan rejected the move to teach Science and Mathematics in English in vernacular primary schools and instead suggested that English terminologies be introduced in textbooks in both subjects from Standard Four with some bilingual text to be used in Standards Five and Six. Gerakan President Datuk Seri Dr Lim Keng Yaik said the party's stand on the issue would be presented at the next Cabinet meeting and the next meeting of Chinese-based BN component parties. On Friday, representatives of MCA, Gerakan, Sabah Progressive Party and Sarawak United People's Party discussed the matter but failed to reach a consensus. Meanwhile, Umno Youth Chief Datuk Hishammuddin Tun Hussein said the movement would not stop anybody from debating the issue as long as it was not used to fan emotions. "Umno Youth itself at the early stage had voiced concern on the aspects of implementation, teaching manpower, whether it is adequate or not and the schedule for implementation, and this we have discussed with the education authorities," he told reporters at the F1 powerboat event. Hishammuddin urged all parties, especially Chinese education movements, not to link the matter with irrelevant issues when debating the subject. "So, if you want to have proposals, you have ideas and how it can be done and implemented better, nobody is stopping you from doing that. But if you link that with racial and religious sentiments then it becomes dangerous," he said. Asked whether the Government would be receptive to the counter-proposals, Hishammuddin said Education Minister Tan Sri Musa Mohamad would be a better person to answer the question. "Knowing Tan Sri Musa, and what he has briefed the Cabinet, what we are doing really is for the benefit of all races. What we are doing right now is to ensure that our youth and the future generations are able to use the English language to get more knowledge. "It's not a question of the Chinese or the Malay identity; it's not the issue of the Malay or the Chinese language. But it is about questions and realities that in this world today, without a (good) command of the English language you are not able to absorb the available information that is out there, that is the issue," he said. Hishammuddin believed that the Education Ministry would be willing to listen to proposals that would help in the implementation of the move. - Bernama

From http://www.dailyexpress.com.my/ 08/20/2002

Help Govt Realise Green Campaign

SHAH ALAM: State governments have been urged to ensure the "Green Malaysia" campaign becomes a reality. Since the campaign was initiated several years ago, some 400,000 trees out of the targeted two million by 2020 have been planted. Housing and Local Government Minister Datuk Seri Ong Ka Ting said local authorities had been given certain quotas to fulfil. "The intention here is to plant more trees, not only for beautification purposes, but to ensure a better environment in housing areas, cities and villages," he added. He said there was a short-term target of greening a large portion of the nation by 2005, to ensure the country was on track to become a garden nation by 2020. Ong said this after a closed-door meeting to appraise the working relationship between the federal and state authorities governing the local government portfolio. He said an agenda raised at the meeting was the need for local governments to complement the Federal Government's investor-friendly policy. "This involves fast and efficient approvals of development programmes that help hasten the economic recovery," he added. On the proposed Housing Tribunal, which will hear cases of complaints involving up to RM25,000, Ong said it would start with about 20 members. "We are in the process of appointing members of the tribunal, which will be headed by someone from the judiciary."

From http://thestar.com.my/ 08/20/2002

Philippines: Arroyo, Jdv Okay Online Tax Pay Plan

President Gloria Macapagal-Arroyo and House Speaker Jose de Venecia have approved Rep. Enrique 'Tet' Garcia's proposed online registration of tax payments in a major move to prevent their diversion and shore up business confidence in the country's tax system.The action by President Arroyo and De Venecia comes amid recent revelations by Land Bank Officials of a widening scam involving the illegal diversion of millions of pesos of tax payments to private bank accounts. "This on-line registration will plug the tax remittance loopholes," said De Venecia as he praised Garcia's statesmanship as one of the leading lights of the minority in the House of Representatives. Garcia's proposed modifications in the present system could prevent revenue losses to the government estimated at P100 billion annually and cover the programmed expenditures in government spending. The larger effect, the Speaker said, is to address the concerns of the business community on the integrity of the tax system, which came under question in recent weeks because of multimillion-peso diversions in the remittance of tax payments made to banks. De Venecia said his endorsement of the tax remittance modifications is on top of the seven-point rapic revenue mobilization program he earlier proposed to bridge the budget deficit that reached P133 billion from January to July this year. De Venecia, joined by 26 other House members, have appealed to the courts for an "expeditious decision" on the 100-million-peso coconut levy and the P35-billion Marcos funds, litigation of which have lasted more than a decade. De Venecia's other proposals include the abolition of the Bureau of the Internal Revenue and the creation of a performance-based Internal Revenue Management Authority. The modifications which Garcia introduced, De Venecia said, will "allay apprehensions" sweeping the business sector and address one of the root causes of curruption that have created a major shrtfall in the collection of government revenue agencies. The modification of the system will also include the long-sought management information system that will enable both the BIR and the Bureau of Customs to "effectively collect and meet revenue targets." Garcia's peroposalincludes changes that will preclude unscrupulous agents from delaying or diverting the remittance of tax collection. The proposed modifications were forwarded by Garcia to the President last monht and approved by the Cabinet last Aug. 13. Although introduced by a minority congressman, the proposal was endorsed by De Venecia, who described the modifications as "simple, doable and could be immediately implemented" without any cost to the government. The modifications will create an effective control over payments and prevent illegal diversion by unscrupulous banks to private accounts, De Venecia said.

From http://www.mb.com.ph/ 08/25/2002

Construction Sector Leaner With New Rules

Consolidation has produced a more balanced industry (SINGAPORE) The Singapore construction industry is now leaner and meaner, thanks to the revised Contractors Registration System that finally came into effect on July 1.The revised registration system was aimed at helping the industry cope with overcapacity and lower job volumes. And it has resulted in a consolidation of the industry following closures as well as mergers and acquisitions that came in anticipation of the registration changes. The upshot, industry players say, is a more balanced construction sector better able to cope with the tough times. Construction demand in contract-value terms, and excluding reclamation projects, has fallen significantly from average of over $20 billion a year during the peak years. Under the new registration system, contractors are ranked within seven grades - A1, A2, B1, B2, C1, C2 and C3 - against the previous G1 to G8 grading. Grade A1 is now the equivalent of G8.To retain their top grade under the new system, a G8 contractor has had to triple its minimum paid-up capital to $15 million from $5 million. It also needed to raise its number of professional staff to at least 30 instead of the previous four. An A1 rating means the contractor is eligible to tender for projects of unlimited value. A grade A2 contractor will have to keep to a tender limit of $65 million while lower-grade contractors will have even lower limits. In the first half of this year, at least 11 firms dropped out of the Building and Construction Authority's registry due in part to the raising of the qualifying criteria. For the whole of last year, about 15 names were scratched from the registry.Also, there were at least two mergers and acquisitions this year, following 11 in 2001 and four in 2000.But contractors believe the consolidation is now about over. Overall sentiment in the industry has also improved, following the recent upwards revision of construction demand for this year. Last week, National Development Minister Mah Bow Tan disclosed that the forecast is now for $14.6 billion worth of demand, against the previous forecast of $12.9 billion made in January. Some $9.4 billion worth of projects is now expected to come from the public sector in 2002, against a previously forecast of $8.4 billion. The private sector is forecast to contribute $5.2 billion now, against $4.5 billion before. Construction firm Hor Kew's managing director Aw Leng Hwee said: 'Generally, construction demand is looking up, but because of a time lag, this will not show till later. 'An industry veteran added that the initial concern within the sector was that there would not be enough firms qualifying for the new A1 band, or that most of these contractors would be foreign ones. 'But now, that has turned out fine as there are more than 20 A1 firms, including a healthy number of local ones,' he said. He added that with the value of most current projects falling within the tender eligibility of firms in the A2 band, fears that there may not be enough jobs to go around has also partly receded. Contractors have been calling for the government to release smaller-sized infrastructure projects in light of the industry downturn, so that more firms can have a slice of the pie.Still, Rajah & Tann senior partner Sundaresh Menon, who specialises in construction law, cautioned that the industry is still 'very tight'. 'Medium-sized enterprises are still feeling the pressure. As a function of the economy, the sector will improve once the residential property market picks up, when more building contracts will be awarded. ''But this will not be anytime soon because of the large (new home) oversupply,' he added. Ministry of Manpower figures show that 9,871 jobs were lost in the construction industry in the first quarter of this year. This made up the bulk of the 13,848 jobs lost in the whole economy in Q1.The construction sector shed 9,482 jobs in Q4 of last year. (by Vince Chong)

From http://business-times.asia1.com.sg/ 08/12/2002

Viet Nam: Change in Port Management

(VET)- Transport Minister Le Ngoc Hoan has recently called for drastic changes in port management, recommending the Government focus investment on deep sea and container ports in different parts of the country. Hoan was speaking at a recent national workshop to review the country's maritime transport and to discuss the expansion of deep sea and container ports as a major lever to boost exports and imports. Last year the number of ships to visit Vietnamese ports grew 7.5 per cent over the previous year, handling 91.4 million tonnes of freight, up 10.26 per cent over the same period. The ports of HCM City, Vung Tau and Hai Phong took the lead in cargo handling, up 12.3, 22.4 and 6.1 percent respectively. Yet despite these gains, Hoan told the conference the Viet Nam. Ports Association had failed to tap into its full capacity. Only one-third of its 33 members can handle more than 1 million tonnes of cargo annually, Hoan told 100-plus delegates who attended the workshop in Ha Long city. Hoan attributed this failure to weak management, obsolete machinery and equipment, and poor market promotion. The minister also called for management reform and compatible investment in the port system, especially deep sea and container ports. The acting director of Viet Nam Maritime Transport, Chu Quang Thu, said the State had spent heavily on seaports, transferring them to port enterprises for economic management. "Profits earned from production and business operations were not used to reinvest in port development but to enrich the ports' own coffers, " Thu said. He said this misspending had impacted negatively on container transport costs, which are 30-50 per cent higher than of regional countries. Conference delegates recommended giving priority to major ports such as Cai Lan (Quang Ninh Province), Hai Phong, Vung Ang (Ha Tinh), Chan May (Thua Thien-Hue), Tien Sa (Da Nang), Dam Mon and Van Phong (Khanh Hoa), Sao Mai and Ben Dinh (Ba Ria-Vung Tau), and Can Tho. Viet Nam boasts 90 sea ports of different sizes with more than 24km of wharf frontage. Worldwide volume in container transports are expected to rise 7.1 per cent annually in decade. Cai Lain sea port gets go-ahead On another front the Cai Lan deep sea and container port has been approved with an estimated investment of VND1,049 billion (US$68 million). The port, situated in the world heritage listed Ha Long Bay, will accommodate ships of up to 40,000 tonnes. The port's handling capacity is expected to rise 'from 10 million tonnes in 2010 to 20 million in 2020. The Government is considering other maritime transport schemes including deep sea port construction in the long run.

From http://www.vneconomy.com.vn/ 08/01/2002







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Bangladesh: Govt Has Failed to Control Market Prices: AL

Awami League acting President Abdus Samad Azad yesterday said the government has no control over the market situation as is evident from the skyrocketing of prices of essentials that "compounded common people's misery". Since the announcement of the budget by what he called the corrupt and incompetent BNP-Jamaat government, Azad said unusual and unabated price hike of rice, pulses, edible oil, powder milk, fish, vegetables etc. had already gone beyond the buying capacity of the people. As a result, public life has been battered. The Awami League leader said on the one hand the prices of essentials were going up without any checks and on the other pay and wages of low and limited-income people, workers and employees not increasing. So, the low-paid workers and employees cannot sustain this unbearable situation. " Under the situation a great want hits public life. If the government fails to control the market prices, the famines in the country would assume an epidemic proportion," Azad cautioned. He also urged the people to organise a united movement to ensure the "downfall of the failed, incompetent and corrupt government".

From http://www.dailystarnews.com/ 08/03/2002

500 Industries Without BSTI Licences in 10 Districts

Over 500 industrial units of ten districts in the country's southwestern region do not have licences from the Bangladesh Standard and Testing Institution (BSTI). As a result, the government is losing revenue earnings of about Tk 50 lakh every year. Besides, the BSTI is yet to realise outstanding licence fees of nearly Taka 40 lakh from different industrial concerns, said an official source. According to the source, there are at least one thousand small, medium and big industrial units in the districts, of which, only 314 have licences. The BSTI earned Tk 35 lakh as licence fees from the 314 industrial units in the last financial year. During the current fiscal year, the target for earning Tk 41 lakh has been fixed, the source said. Besides, there are instances that owners of many industrial units are yet to renew their licences, which led to non-realisation of Tk 40 lakh renewal fees. Khulna Newsprint Mills, the biggest such defaulter, owed BSTI Tk 18 lakh in licence renewal fees, the source said. The BSTI source said licences of 150 industrial units are now under process.

From http://www.dailystarnews.com/ 08/05/2002

'Govt to Establish Terror-Free Society

State Minister for Civil Aviation and Tourism Mir Mohammad Nasiruddin yesterday said the present government of Prime Minister Khaleda Zia is pledge-bound to establish a terror-free, peaceful and prosperous society. "Prime Minister Khaleda Zia has already shown her sincere endeavours through giving directives at times to the law enforcing agencies to arrest all anti-social elements irrespective of party affiliations," the state minister said while addressing a function on the occasion of 10th founding anniversary of the Protiva, a socio-cultural organisation at Bangla Bazar area in the port city. Chaired by the Protiva president Mohammad Akhter Ali Bacchu, the function was addressed by journalist Iskandar Ali Chowdhury, Alhaj Mohammad Meah, Prof Mohammad Nurul Amin, Farid Ahmed and Mohammad Zainal Abedin. The state minister said in line with the pre-election pledges, the BNP government has initiated a series of programmes including infrastructural development of the port city with a view to turning it into a true commercial capital of the country. In this context, he said steps have already been taken for optimum utilisation of the Chittagong Shah Amanat International Airport by introducing 16 more flights weekly in domestic routes and 17 flights in international routes. This will help increase trade and business and attract foreign investment here, he added. Protiva took up elaborate programmes including rally, discussion meeting, cultural competition, reception of social workers and international film exhibition in observance of its founding anniversary.

From http://www.dailystarnews.com/ 08/05/2002

Bhutan: Judiciary - An Era of Reforms

Concluding a nation-wide series of awareness workshops on the civil and criminal procedure code (CCPC) for DYT and GYT members judiciary officials looked back this week at monumental changes in the evolving judiciary system in Bhutan. The administration of justice in Bhutan had been greatly strengthened and an efficient and dynamic legal system established in the country since His Majesty the King ascended the Golden Throne in 1974, said the chief justice of Bhutan, Lyonpo Sonam Tobgye. His Majesty had inspired far-reaching legislative and judicial reforms to respond to the changing needs of a changing society." The judiciary of Bhutan has witnessed unprecedented development, guided by the wisdom and vision of His Majesty the King," the chief justice said, adding that this vision would continue to refine the legal system, long into the future, to enhance greater transparency and strengthen the Rule of Law for the well being of all Bhutanese for all time to come. The chief justice said that His Majesty had repeatedly advised judicial officials "to dispense justice as speedily as possible, to adhere to the rule of law, and to make the judicial process clear". In 1985, His Majesty had created the post of the chief justice. Subsequently efficient drangpons were appointed, the post of thrim-tshap (acting drangpon) was abolished, and financial and administrative powers were decentralized from the High Court to the dzongkhag and dungkhag courts. To build the capacity of the judiciary and to safeguard its independence, a separate judicial cadre, distinct from the civil service cadre, was established in 1990. In 1991, formal legal education was initiated when the first group of graduates went to study law in India. A research division was established in 1994. On royal command, the national legal course was started in 1995 on Bhutanese and international law as well as on Buddhist literature. "Consequently we were able to improve the quality and delivery of justice," the chief justice said. "The course not only proved popular but also very effective and our new breed of lawyers are conversant both in English and in Dzongkha, not only at the working level but at a higher and deeper level."Also in 1995, the High Court introduced formal training for jabmis (legal counsel) upon the advice of His Majesty the King. Since then about 160 of them were trained. In 1999, the Office of Legal Affairs was established.Computers were introduced in the courtroom to provide information for analysis, to expedite the drafting of judgments and to implement the objectives of justice, both qualitatively and quantitatively. Computerized information in court cases helped retrieve precedents rapidly and accurately, thereby enhancing a uniform sentencing system. The chief justice told Kuensel that legal education and dissemination was also given stronger emphasis. "Justice is not only adjudication but knowing the process," Lyonpo Sonam Tobgye said. "We need to create awareness on the rule of law, element of fair trial, and the necessity of due process of law to ensure that justice is understood and implemented. We need to disseminate legal education to the grassroots." The chief justice said that although His Majesty the King had introduced numerous reforms since enthronement, 1988 marked the watershed of reforms. That year His Majesty had issued a kaja instructing the formation of a high level commission to look into the deficiencies of the judicial system. "In the kaja His Majesty expressed his deep concern about the delay of justice, about the quality of justice, and about the confidence of the people in the judicial system," said Lyonpo Sonam Tobgye. "Justice was terribly delayed. That was because the system then was based primarily on the experiences of our forefathers. The system had to be reformed to adapt to the changing nature and increasing number of litigation." "While the essence and the principles of justice would always remain the same, justice should move with the currents of social and technological changes," the chief justice said. "We have to complement the rising expectations of the people. We must keep upgrading and updating professionalism in the judiciary." The enactment of the CCPC in 2001 was the most crucial and siginificant reform the judiciary had initiated so far. Through this code, there was improved accessibility to justice and the courts had become "user friendly". The CCPC, among other things, had streamlined the registration procedure and hearing processes. It upheld the principle of the due process of law. With the code, the judiciary had now become transparent. "With transparency judges become accountable, and litigants become responsible," the chief justice said. "The code ensures that the end does not justify the means. For justice, the means are equally important." Lyonpo Sonam Tobgye said that the historical element incorporated in the CCPC made it a unique legal instrument. It had retained the traditional beliefs and customs which had been part of Bhutanese social and cultural life since the time of the Zhabdrung and which were drawn from the fundamental teachings of Buddhism encompassing both spiritual and worldly laws. The chief justice pointed out that today there were 60 lawyers in the country and 30 more were undergoing studies in law at prestigious universities in India and abroad. In addition, eight lawyers had completed their Masters in Law (LLM) degrees and were working as ramjams. Two were currently pursuing their LLM studies and more would be sent for advanced postgraduate courses in the near future. "Studying law has become so popular today," the chief justice said. "This is very gratifying because this is an express recognition of the necessity for the rule of law." Since 1997, more than 100 bench clerks had been trained and were already working in the courts. Around 40 bench clerks would soon join the judiciary. The reforms and the development in the judiciary had brought about noticeable improvements in the dispensation and administration of justice. In 2001, 6,079 cases were decided in 108 days whereas only 1,951 cases took more than 108 days. The dzongkhag courts had decided a total of 11,260 cases. Only 109 cases decided by the dzongkhag courts appealed to the High Court and out of 110 cases decided by the High Court, only 18 appealed to His Majesty the King. The percentage of appeal in 2001 was 1.13. Despite the progress, the chief justice said that there were still "loud" dissenting views. "Some of the opinions expressed in the recent National Assembly reminded the judiciary, particularly the judges, that we have to work harder to gain people's confidence in the process of administering justice and in our professional conduct." In future the royal court of justice planned to develop a court website for information and transparency, and to make judgments accessible to everyone all around the country within minutes of delivery. Through the website, transcripts of arguments would also be available. Infrastructure development would be given particular emphasis in the future. Future court houses and buildings would be "independently located and inspiring structures" reflecting the rich architectural tradition of Bhutan. The construction of the new High Court building was already in progress. The royal court of justice was also considering the establishment of a formal judges' training institute so that judges could update their knowledge frequently within the country. (by Tshering Gyeltshen)

From http://www.kuenselonline.com/ 08/09/2002

India: 'Infrastructurestrategies2002' to Reveal Ground-Breaking Research Results

Network Magazine and Computer Associates will host a series of seminars titled 'InfrastructureStrategies2002' in Mumbai, Bangalore, and Delhi on July 23, 24 and 25. The seminars will reveal the results of ground-breaking research conducted by Network Magazine and ORG-MARG. Express Computer Editor Val Souza will present the findings of the survey. Titled 'InfrastructureStrategies2002', the survey is the first of its kind in India and will provide users and solution providers valuable insights into the technological areas of growth and areas of likely IT spending among large Indian companies. Survey respondents included the IT heads of 200-odd large Indian companies from industry verticals like FMCG, banking and insurance, petrochemicals, and the Union and state governments. These IT heads were asked to furnish their opinions about issues like the technology most likely to be deployed in their organisations in the next 12 months, the percentage increase/decrease in IT budgets and spending over last year, and the reasons that are driving the need. They also shared their roadmap for IT spending by providing their IT budget figures for this year and last year. The reasons that are driving the need for IT-enablement are studied in detail and categorised according to importance. This will provide vendors, solution providers, and industry analysts/watchers an idea of what companies are most concerned about in their networks. The three-city event is co-sponsored by Samsung.

From http://www.expressindia.com/ 08/05/2002

India-- Securities and Exchange Board Plans Corporate Governance Measures

NEW DELHI: The Securities and Exchange Board of India on Wednesday said it is designing a system to measure corporate governance in Indian firms after a string of financial scandals in the US. Accounting irregularities that contributed to the bankruptcy of US energy trader Enron and telecoms giant WorldCom group have fractured investor confidence across the globe.The US Congress is now under pressure to act to counter corporate fraud and rebuild that confidence. "Indian credit rating agencies are working on an instrument which will attempt to measure wealth creation, wealth management and wealth sharing," Sebi Chairman G N Bajpai told a seminar. "Our focus at Sebi would be to move corporate governance from mere form to substance," Bajpai said, but did not elaborate. He said rating agencies Credit Rating Information Services and ICRA Ltd would develop the model, which would have qualitative and numeric standards to benchmark Indian companies on various aspects of governance. He did not say when the model would become operational or whether it would be compulsory for the nearly 10,000 firms listed on 23 Indian stock exchanges. Bajpai said Sebi would revisit all its regulatory mechanisms dealing with listed firms over the next year to make the process more transparent. He said higher standards of corporate governance based on robust accounting practices were necessary to bring investors back to global stock markets. "The ultimate in regulation on this planet Earth is crumbling like a pack of cards, the United States' Securities Exchange Commission, which was supposed to be the mecca for all securities' regulators," Bajpai said. "No more can the US be a model for the rest of the world," he added.

From http://economictimes.indiatimes.com/ 08/07/2002

Govt Working Has Improved- Minister

PATHANKOT: The Punjab Urban Development Authority (PUDA) has sanctioned 481 plots for government class IV employees in Sector 68 at Mohali. A similar scheme will be extended to other government employees who can afford to purchase more than 10 marla plots, Punjab urban development and housing minister Raghu Nath Sahai Puri, told Times News Network on Thursday. Puri, who also spoke at the Independence Day function organised at Gurdaspur, said that the Punjabis had played an important role in the country's freedom struggle. He added that the government was committed to providing relief to the farmers whose crops had failed due to drought-like conditions. Girdawari would be completed before August 25, he added. He said PUDA laws would be simplified shortly to make the atmosphere conducive to growth of the housing sector. Other than this, 21 unauthorised colonies would be considered for regularisation. ''More than Rs 70 crore has been allocated for housing the weaker section of society in the current fiscal. We have identified people living in urban slums. These people will benefit the most under the new housing policy which being fine tuned by the Amarinder Singh government,'' Puri added. Puri criticised the former SAD-BJP government for not giving priority to the housing sector. He said many unauthorised colonies sprung during the five-year tenure the Badal government. ''Colonisers have also been complaining that PUDA did not give approval to any the colonies in the last two years of the regime,'' added. The minister said, ''The fact of the matter is that the government is facing a fund crunch. There were not many options to be explored. Salary of the employees was deducted as part of the austerity measures."

From http://timesofindia.indiatimes.com/ 08/16/2002

Pakistan: New Govt Will Have to Sustain Ongoing Reforms:Shaukat

Finance Minister Shaukat Aziz here on Sunday unfolded three points post-election development strategy in which, according to him, the newly elected government would concentrate its synergies.

From http://www.paknews.com/ 08/12/2002

Govt Grants Petroleum Exploration License

The government Tuesday granted a Petroleum Exploration License to the Joint Venture of Eni through its wholly owned subsidiary Lasmo Oil Pakistan Limited (55%), Pakistan Oilfield Limited (22.5%) and Mari Gas company limited (22.5%0 over Block no. 2667.5 (Manchar) covering an area of 2435.35 square kilometers in district Dadu, Sindh Province. It is approximately 200 km North of Karachi. The block falls in prospectively Zone III having the same sedimentary basin as that of adjacent Zamzama gas field. Lasma will be the operator in Manchar Block. Under the said agreement the Joint Venture partners will make a firm investment of at-least US$ 6.7 million with an additional contingent investment of US$ 5.65 million based on the outcomes of results in the first two years. Lasmo also has working interests in Kadanwari, Bhit Zamzama, Miaro and Sawan gas fields. The Kadanwari gas field has been supplying gas to the national market since 1995, while the Bhit gas field is expected to commence production shortly. Within the next 18 months, Lasmo's net production from all its Pakistan assets is projected to rise from the current 8000 BOEPD to in excess of 35000 BOEPD. Mari Gas Company is a local Pakistani Company incorporated in 1984 and is currently operating a gas field at Dharki, District sukkur with original recoverable gas reserves of 7.54 TCF. The field is currently producing 426 MMSCFD from shallow reservoir only. Pakistan Oilfields Limited is one of the oldest Pakistani exploration and Production Company established in 1950 with Attock Oil Company as the parent company. POL operates nine oil and gas producing fields, in addition to its shares in five non-operated fields. POL's current gross production is about 10,000 BOPD, 45 MMSCF gas per day and around 200 metric tons per day of LPG. The License and the Petroleum Concession Agreement were signed by M. Abdullah Yusuf Secretary Petroleum and Natural Resources on behalf of the President Islamic Republic of Pakistan, G. A Sabri Director General Petroleum Concessions, Mike James Buck Managing Director Lasmo Oil Pakistan Limited, Lt General (retd) Muhammad Afzal Janjua Managing Director Mari Gas Company Limited and Shuaib Anwar Malik Chairman Pakistan Oilfields Limited.

From http://www.paknews.com/ 08/21/2002


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Domestic Political Crackdown in Kazakhstan Could Have Economic Consequences

The recent criminal convictions of two leading political opposition figures in Kazakhstan have effectively crushed a significant challenge to President Nursultan Nazarbayev's authority. But in relying on heavy-handed tactics to preserve a monopoly on power, Nazarbayev may find that he has dealt a severe blow to the country's economic prospects, his opponents say. On August 2, Galimzhan Zhakiyanov, a former governor of the northern Pavlodar Region who emerged as a leader of the main opposition movement Democratic Choice of Kazakhstan (DCK), received a seven-year prison term on an abuse-of-power conviction stemming from his tenure as a government official. Zhakiyanov's sentencing came shortly after a court convicted another DCK leader, Mukhtar Ablyazov, for abuse of power. Ablyazov, a former energy minister, received a six-year sentence. Nazarbayev critics have maintained that both Zhakiyanov and Ablyazov did not receive fair trials, adding that the cases were politically motivated and designed to discourage opposition to the incumbent administration. Government officials insist that Zhakiyanov and Ablyazov were prosecuted purely on the basis of their corrupt practices while in office. The convictions leave the DCK in disarray. Given the examples of Zhakiyanov and Ablyazov, many DCK supporters are worried about government retribution if they attempt to mount a fresh challenge to Nazarbayev's authority. Some opposition figures, such as political scientist Nurbulat Masanov, have accused the president of pursuing anti-democratic policies. Meanwhile, prominent human rights advocate Yevgeny Zhovtis, head of the Almaty-based Kazakhstan International Bureau for Human Rights and Rule of Law, complains that the country's legislative framework helps authorities enforce their will. "Kazakh legislation has been designed to protect the interests of the state rather than those of the individual," Zhovtis said in an interview published by the Vremya newspaper July 18. The prosecutions of the two DCK leaders, along with the passage of legislation that limits the ability of political parties to contest elections, indicates that Nazarbayev was seriously concerned by opposition movement's calls that he share power. The DCK came together in late 2001, attracting not only high-profile politicians but also prominent entrepreneurs. Earlier this year, the DCK appeared to be gaining momentum after staging a mass rally in Almaty. Soon thereafter, Nazarbayev began taking action to thwart the DCK. Nazarbayev's actions have left many in Kazakhstan's business community discouraged. Kazakhstan has enjoyed steady economic growth in recent years, driven largely by the country's large reserves of natural resources. The president's unwillingness to release his tight grip on the country's political sphere raises fears among entrepreneurs about their future ability to protect their business interests. Nazarbayev's critics note that many relatives, friends and associates of the president have considerable business holdings, and may be tempted in the future to use their political clout to enhance their economic interests. As a result, the president's political maneuvers may have lasting economic consequences. "This [the Zhakiyanov and Ablyazov trials] is a real strike at both major and medium-sized businesses in Kazakhstan," Bulat Abilov, a leader of the Ak-Zhol Democratic Party told Vremya on July 27. "I know many businessmen who are now thinking of taking their businesses out of Kazakhstan. They believe that continuation of economic repression in relation to any businessman is possible." "The businessmen are jumping to the conclusion that it is safer in Russia now," Abilov continued. "Therefore, they are negotiating the sale of their companies here and have already started to work out ways of transferring their businesses to Russia." Abilov went on to suggest that authorities, having beaten back a threat to their political influence, are intent on enhancing their control over the country's economic life. The situation has reached a point where a businessman with no ties to those in power cannot hope to find new economic opportunities. Many economic sectors have already come under the influence of business interests with close government connections, Abilov asserted. "All the aspects of the economy are divided between several financial and industrial groups, behind which there are well-known officials. Business has been monopolized," Abilov said. "Under the present circumstances, when competition is ruled out and there are no prospects, people will not go on doing business in Kazakhstan." The international community, including the United States, has largely been muted in its criticism of the government's domestic political crackdown, in part due to geopolitical factors. According to one Kazakhstani political scientist, who spoke on condition of anonymity, the United States desires access to Kazakhstani military facilities, and is reluctant to do anything that might jeopardize Washington's strategic aims. "Speaking of the long-range outlook, America needs Kazakhstan for large-scale control of China," the political scientist said. "In terms of the short-range perspective, Kazakhstan would provide its airports for the possible operations against Iraq since the United States would [probably] not be able to use bases in Turkey and Uzbekistan." Some analysts and politicians believe that Nazarbayev has overreacted to the political challenge, and while the opposition may prove timid over the short term, over the longer term it may emerge as more powerful. Some point to the law on political parties, approved by parliament in June, as a potential catalyst for the revival of the opposition. Under the new law, many opposition parties do not meet the eligibility criteria ?including a stipulation that a party has at least 50,000 registered members ?to contest elections. Gulzhan Yergaliyeva, a leader of the People's Congress of Kazakhstan, suggested that the law may ultimately prompt the fractious opposition to unite in order to contest Nazarbayev at the ballot box. Some government officials also share this view. "Kazakhstan's opposition has two ways: the first one is to set up boycott to the Act and the future elections, which is an ineffective defeatist way. The second one is to accept the Act and start active work. Speaking frankly I am afraid of the second way," presidential advisor Yermukhamet Yertisbayev told the Russian-language Navigator news web site.

From http://www.eurasianet.org/ 08/06/2002

Tajikistan Abolishes Exit Visas

Official paper of the People's Democratic Party of Tajikistan "Minbari Khalq" # 32 and "Asia-Plus" # 33 have reported that Tajikistan had abolished exit visas. Now, for traveling to other countries it is enough for Tajik citizens to get a visa of the destination country. As the Deputy Foreign Minister Abdunabi Sattorov told Asia-Plus "our country is the last from among the CIS countries that has abolished this unnecessary procedure".

From http://www.ap.infotaj.com/ 08/16/2002


Turkey Eyes European Union in Wave of Reforms

Mevlut KatikAmid Turkey's ongoing political and economic turmoil, which includes the recent resignation of Economics Minister Kemal Dervis, parliament has adopted a series of reforms that could enhance civil liberties and potentially hasten integration into the European Union. Some local analysts have portrayed the legislation as one of the three major reformist efforts in Turkish history since the founding of the Ottoman Empire. The EU has insisted on several changes in Turkey's legal framework, including more humanitarian support to Kurds and the abolition of the death penalty, before it will consider Ankara's accession possibilities. Given the protracted Turkish government crisis this summer, many Turkish observers doubted that parliament could meet the EU's demands. However, Parliament and the MPs met on August 5, and in a 17-hour session, approved a package known as the EU Adaptation Laws. The vote reflected the divisions that define Turkish politics ?253 MPs voted for it while 152 from the Nationalist party and the pro-Islamic AKP, which leads in the polls currently, voted against it. But it did not fall victim to those divisions. Turkish politicians hope that the EU will announce that it is formally prepared to hold accession talks with Turkey, when European leaders convene at a December summit in Copenhagen. The laws directly address European misgivings about Turkish policy. They allow teaching and broadcasting in Kurdish, and they outlaw the death penalty. Predictably, these measures spurred protests by relatives of Turkish soldiers who have died fighting the Kurdistan Workers' Party, an extremist group known as the PKK. The leader of the PKK, Abdullah Ocalan, has received a death sentence, though Turkey has kept a moratorium on capital punishment since 1984. A day after parliament passed the EU adaptation package, demonstrators blocked the main bridge over the Bosphorus. On August 9, language-institute owner Nazif Ulgen applied to run the country's first Kurdish language courses in three big cities. In addition, parliament eased restrictions on public demonstrations, lifted penalties for criticizing state institutions, articulated new freedoms for the media, made it easier for international organizations to work in the country, and allowed non-Muslim religious organizations to buy property. The package also outlined tougher measures against illegal immigration and altered the duties of police. So far, reaction to the reform measures in European capitals has been restrained. While EU officials in Brussels welcomed the parliament's action, they indicated that Turkey's accession aspirations would depend more on how the legislation was implemented. Turkey, which received candidate status in 1999, is one of 13 states aspiring to EU membership. Despite the adoption of the legislation, Turkey's EU integration hopes are clouded by questions concerning the government, which has been hampered by the fractious nature of Turkish politics. New parliamentary elections are scheduled for November 3. Given that Turkish law requires a political party gain at least 10 percent of the vote to secure parliamentary seats, the political campaign season is already in full swing. Dervis announced his long-expected resignation August 10, saying that he sought to forge and lead a broad-based alliance of center-left parties to win a sound majority in the parliament after the elections. At the time of his resignation, Dervis, who was a former director of the World Bank, had served as Turkey's chief shepherd of an International Monetary Fund loan agreement since March 2001. Prime Minister Bulent Ecevit named a back-bench MP and political ally, Masum Turker, as Dervis' replacement. Although many expect Dervis will join the New Turkey Party (YTP) formed by Ismail Cem, the former foreign minister, he could upset these expectations. He said on August 10 that he would continue to work together with Cem. However, Dervis wants to establish a broad campaign coalition. Among his chief aims is to woo the People's Republican Party (CHP), which is not keen to cooperate with the YTP. A senior CHP official accused Dervis of "designing politics from above." Center-left parties in Turkey have a long history of infighting that has perhaps alienated voters. Dervis is striving to raise the appeal of the political center in Turkish politics through coalition building. On August 11, for example, he met with Mehmet Ali Bayar, leader of a center-right party called the Democratic Turkey Party. The two pledged that they would "seek ways to act together before and after the elections." Such spirit of cooperation on the political level may prevail as Turkey seeks EU membership. But there is a risk that the EU adaptation laws could heighten social tension and raise concerns about the state's cohesion. Kurds now free to learn Kurdish, for instance, may find themselves marginalized and question their national allegiances. More important, though, the Turkish majority may also come to realize that enhanced freedoms do not divide the country. If it can produce a coherent and energetic government to enact its laws, Turkey may extend European democracy closer to Central Asia, restoring a tradition of tolerance that dates back to Ottoman times. That achievement would dwarf any person's, or any party's, short-term fortunes.

From http://www.eurasianet.org/ 08/12/2002

Uzbekistan: Government Issues Resolution on Further Reforms in Karakalpakstan

Government of Uzbekistan has issued a resolution on effective use of land and water resources and deepening economic reforms in the Republic of Karakalpakstan during 2003-2007.The document envisions improvement of sowing agricultural plants in the region, development of seed-growing of corn, sorghum, fodder and olive cultures, increasing the number of cattle from 425,000 heads in 2003 to 503,700 in 2007 and small cattle - from 487,800 heads to 697,200 respectively.The resolution foresees adjustment of areas for sowing rice and winter wheat depending on the volume of water resources in Tuyamuyun water reservoir and strict control over maintenance of the required water volumes of water according to established norms.During 2003-2007, areas for wheat crops are to be increased from 50,000 to 80,000 hectares, corn - to 24,600 hectares and others leguminous plants - to 13,9700.Areas under rice (60,000 hectares), cotton (80,000), sunflower (10,000), liquorice (5,000) and vineyards (2,300) will remain unchanged.Crops of technical olive cultures are to be increased from 15,000 to 22,000 hectares, vegetables - from 8,120 to 10,000 hectares. Areas under forage crops will be kept within the limits of 78,900 hectares with increasing the share of lucerne to 50%.Production of seeds is determined as follows: rice - 5,950 tonnes, wheat - 20,200 tonnes and corn - 600 tonnes, as well as sorghum, triticale, winter neigh, lucerne, sunflowers and millet.

From http://www.uzreport.com/ 08/20/2002

Samoa Plans to Slash Government Departments in Major Reform

The Samoan Government has tabled a parliamentary bill that proposes major reforms slashing the number of government departments and ministries. Prime Minister Tuilaepa Sailele Malielegaoi told parliament the Ministerial and Departmental Arrangement Bill 2002 will save government "a lot of money" that is being wasted. "Not only will it save a lot of money," Tuilaepa said, "it will also help improve the quality and level of government services to the public." The bill proposes "major reforms" to the structure of government. And the members who spoke were supportive of the reforms, although some were concerned at the impact of the changes on the people affected. The bill will see a large number of government departments merging, reducing by almost 50% the present number of government departments and ministries. The reduction will mean some of the present heads are likely to lose their jobs at the top. And this was one of the issues raised by former Opposition Leader Tuiatua Tupua Tamasese Efi.Tuiatua asked what affect the proposed changes will have on heads of departments, especially those whose departments are merged. Would they lose their top posts? he asked. In reply, Tuilaepa said the government had set policies on contract officers at the top. These will determine how the heads will be treated. He said every head of each department knew when their time was over at the helm. "At that point, they have either to reapply or to step down," Tuilaepa said. Tuiatua also asked about a section of the bill which stated that any decision made by the Prime Minister regarding the appointment of a minister to a portfolio or a head to a department was final and cannot be questioned. Tuilaepa said the clause referred to ministerial duties only. "For instance, if the Minister of Agriculture and the Minister of Environment were arguing on who has the authority over a plant, the Prime Minister can step in," Tuilaepa said. "Someone has to be the referee and settle the argument. That is the meaning of that part of the bill." The bill now goes to the bills committee of Parliament for closer examination before coming back to the House for its second reading. The restructure has come as no surprise as the content of the legislation has been known, certainly by the public servants for some time now. The reforms are part of government's efforts to improve efficiency and service in the public sector.

From http://www.pacificislands.cc/ 08/15/2002

 

Switzerland Increases Support for Five Central Asian Countries

Switzerland has increased by US$5 million its financial contribution to IMF technical assistance in Azerbaijan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, IMF website reported. The grant will allow the Fund to expand its technical assistance in support of economic reforms in the five countries, which are part of the group, or constituency, of members represented by Switzerland at the IMF.Switzerland supports technical assistance through the "Switzerland Technical Assistance Subaccount", set up in 1998. Its initial contribution of US$2.5 million has been used to finance four technical assistance projects to strengthen budget, fiscal and debt management. The new resources provided by Switzerland will build on these efforts. An agreement between Switzerland and IMF on Technical Assistance was signed in Washington, D.C. on July 19, 2002 by IMF Deputy Managing Director Eduardo Aninat. Commenting on Switzerland's increased support for IMF Technical Assistance, Mr. Aninat said, "On behalf of the IMF and the authorities in these five countries, I applaud Switzerland's generous support of IMF technical assistance. This action is both a recognition of the importance of technical assistance in strengthening economic management, and a direct contribution to economic reform efforts of Azerbaijan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan." The IMF provides technical assistance to help member countries strengthen their human resource and institutional capacities for effective economic management. Fund technical assistance focuses on its core areas of competency, namely macroeconomic policy; monetary and foreign exchange policy; fiscal policy and management; and macroeconomic statistics.

From http://www.uzreport.com/ 08/01/2002

ACP-- Pacific Ministers Seek Euro 4 Million for Negotiations Action Plan

Pacific nations in the African, Caribbean, Pacific (ACP) group are seeking Euro 4 million to implement their Pacific ACP Regional Action Plan for trade negotiations with the European Union. The Pacific ACP Trade Ministers meeting in Suva said the money would be sought from the 20 million made available to the ACP Secretariat. The Suva meeting was to prepare for the negotiations on new trading arrangements with the European Union due to be launched in September in Brussels. The ministers endorsed a five-year Regional Action Plan 2002-2007 to guide the Pacific ACP states in their negotiations. Represented were: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Palau, Papua New Guinea, Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. The meeting was chaired by Fiji's Minister for Foreign Affairs and External Trade, Kaliopate Tavola. The ministers noted in a statement issued afterwards that their meeting would help to shape an Economic Partnership Agreement (EPA) with the EU. This is required by the Cotonou Agreement, which sets out the aid and trade partnership between the EU and the ACP group. While globalisation had largely been imposed on the Pacific ACP members, the member states needed to turn this to their advantage, the statement said. An Economic Partnership Agreement with the EU would help in this, it said. The ministers agreed to adopt a two-phase approach, with ACP-wide issues being dealt with first by the ACP collectively. This would be followed by the Pacific Phase when a Regional Economic Partnership Agreement would be negotiated. On the content of the Economic Partnership Agreement, the ministers noted that a "market access only" agreement would impose new costs (through loss of tariff protection and fiscal revenue) on Pacific ACP members. But it would confer no new benefits. Therefore, the Economic Partnership Agreement must also address the region's capacity to take full advantage of export opportunities in the EU market, their statement said. The ministers recognised that unless the Pacific ACP states were able to export goods or services at competitive prices, all the market access in the world would be of little value. The negotiations would be pointless, they said. It was, they said, crucially important that the negotiations with the EU produced an agreement that took full account of the urgent need for assistance with: - trade facilitation, - technical advice, - and additional resources. Such provisions would require additional EU funding for trade facilitation measures; trade co-operation; addition of Services to the agreement; and inclusion of sectoral agreements (such as with regard to Fisheries and Tourism). The ministers noted that the goals of the Cotonou Agreement were to reduce poverty, promote sustainable development, and progressively integrate the ACP countries into the global economy. Therefore, they said, it was clear that the Economic Partnership Agreement should not be a conventional trade treaty. Rather it should be a development agreement that also acknowledged the need for special and differential treatment of the island nations - especially the Least Developed Countries, they said. On the negotiating machinery, the ministers agreed that the Trade Experts Advisory Group be drawn from Pacific ACP countries, and beyond if necessary. This is to provide technical and negotiating backup to the Pacific Negotiating team during negotiations. The Pacific ACP Unit within the Forum Secretariat would provide administrative and technical support. The trade ministers noted with appreciation the Commonwealth Secretariat's generous funding allocations of 100,000 pounds annually to be provided for the next 3 years. This is for the Regional Integration Bodies in the ACP Regions, to assist in their Economic Partnership Agreement negotiation

From http://www.pacificislands.cc/ 08/07/2002

Change Development Focus, Population Expert Urges Forum Officials

The pattern of development in the Pacific must be changed to control increasing population growth, an expert has told Pacific Islands Forum officials. Secretariat for the Pacific Community (SPC) demographer Chris McMurray, briefing journalists on her presentation to the Forum Officials Committee meeting in Suva, said: Vocational and technical training must be given as much priority as formal education so school leavers can find ways of earning a living; The development of small businesses must be encouraged; And infrastructure in rural areas must be improved. She spoke on the need to balance population and resources and said this means creating human resources based development. Dr McMurray said the total population in the region was 8.3 million, with Papua New Guinea's 5.3 million accounting for more than half. Papua New Guinea is among nine countries with a growth rate of over two per cent, she said. In Samoa, she said, women had on average 4.4 children. Dr McMurray has been studying fertility rates around the world. She said it seems more employment opportunities for women and a change in the household economic situation have seen the decline in fertility in most developed countries. She said this was not happening in the Pacific mainly because of the urban-based development. "Now, it seems to me this is preventing the kind of modern fertility decline that we see in other countries,'' she said." It is also causing deterioration in the balance between population and resources urban areas are becoming crowded, governments are having difficulty providing infrastructure and there are not enough jobs for schools leavers.' 'She said in the Pacific Islands only between 10 percent and 20 percent of school leavers could find jobs." To improve the balance between population and resources, there needs to be more focus on appropriate human resources development," she said. "Not just population policies but appropriate human resources development." his would strengthen the economy, it would improve the population and development link, lead to lower fertility, address social problems such as unemployed youth, high risk behaviour, apathy and all those difficulties.'' She said the growth rate in Polynesian countries was declining but this was because people were migrating to other countries. (by Colin Taimbari)

From http://www.pacificislands.cc/ 08/14/2002

Asia's New Population Crisis

SYDNEY - Asia is witnessing the most dramatic demographic upheaval in history, with declines in both deaths and births, say researchers. And future generations will have to deal with the sweeping economic and social implications. The latest population data released by the United Nations and the Asia Development Bank (ADB) confirm that East Asia is already experiencing a net drop in population that will affect its long-term growth prospects. Countries in the southeastern, southerly and central regions are still in transition, but the same pattern is evident: higher life expectancy is creating aging workforces which are not being replaced because of falling fertility rates. "How will economies increase productivity so that shrinking workforces can maintain expanding pools of retirees? How will society cope with the changing health and financial needs of an aging population?" the ADB asked in its study. None of these challenges is particularly new on a global scale: much of Western Europe and parts of developed Asia have been grappling for decades with falling populations and the immense burden of supporting retirees. However, researchers believe that developing Asia presents a particular problem due to its complex social structures, a greater reliance on labor-intensive economic production and the inadequacy of support systems. There is also the sheer scale of the demographics to consider: Asia has almost 60 percent of the world's population and a similar proportion of its poor, some of the worst productivity rates and consistently low expenditure on health. Life expectancy in East Asia alone has risen from 43 years to 72 since 1950, according to UN data analyzed by the East-West Center in Hawaii, while average fertility levels have declined from more than five children to just over two. The average person in China now lives until 71, and in India to 64, though life-expectancy levels are still as low as 43 in some parts of Central Asia and barely rise above 50 in Laos, Cambodia, Myanmar and Nepal. By 2025 most Asians will be living for 73 years, and the continent's combined population will have reached 4.4 billion, an increase of 1 billion since 2000. But growth rates will slow, especially in the east and south. China is expected to add only 200 million people in that period, compared with 348 million in the preceding quarter of a century. India will gain 343 million people, down from 388 million in the previous 25 years. Based on UN projections, the fertility rate for the continent as a whole will drop to 2.1 in 2025 and 2.05 in 2050. In East Asia, only 1.89 births are expected for each woman in 2025, while China will see 1.90 births. South Asia will account for most population gains, but only until health-care standards catch up. Infant-mortality rates have already fallen from 80 per 1,000 births to 75 since 1990, and a rising proportion of women are using contraceptives. Most of Asia will still see population growth up to 2050, with China, Japan, South Korea, Singapore and Sri Lanka among the few countries experiencing net declines. Some countries, such as the Philippines and Bangladesh, will even buck the trend by boosting current population growth levels, perhaps due to cultural or religious factors. But the flip side of the higher life expectancy is that the proportion aged 65 and above will surge by 314 percent between 2000 and 2050, comprising 24 percent of all people in East Asia at the end of this period. In 2000, only 8 percent were in this age bracket. Japan will face the biggest dilemma: by 2050, people aged 75-79 will be the largest group in society. "This has many important implications for policy, but at least Japan will probably have the financial resources necessary to support its elderly population," noted the East-West Center. "In other Asian countries, population aging will come at a much earlier stage of economic development." How well will the rest of Asia cope? It is unlikely we will find out for quite some time, as a lag effect from higher levels of fertility during the 1970s and 1980s will produce a disproportionate pool of workers in the most productive age groups until at least 2025. Additionally, the number of dependent elderly retirees will remain constant on a continental basis, though less so at a regional level. According to ADB projections, the ratio is expected to reach a modest 17 percent in the whole of Asia in 2050, but 24 percent in East Asia and 23 percent in China. In contrast, most European countries will have a dependency level of 14-17 percent for elderly retirees in 2050, imposing a far lower economic burden. And Europe has the most extensive welfare systems in the world. China will see a doubling of its dependency rate in 25 years, the fastest ever recorded, without the benefit of a proper social net, as it relies predominantly on family support that is itself being undermined by the trend toward smaller households. Britain took 60 years to reach the same dependency level as China, and Japan is expected to take about 30 years, allowing planners to prepare for the wider economic impact. Structural changes in economic production, including a greater reliance on mechanization and the shift from agriculture to industry, will eventually reduce the need for large workforces in Asia, as will the drop in family sizes. The key question is whether these advances will occur early enough, especially in southern and central regions, to avert under-manning and a resultant drop in economic output. On present indications, probably not. Even if current levels of development are maintained, India is not expected to reach developed-nation status until the latter part of the assessment period. China should get there in three decades. Unlike Japan, which began to face similar demographic challenges in the 1960s, China and India face formidable social constraints that could disrupt the transition. "In 1960, Japan's gross national product per capita was about [US] $2,000, the adult literacy rate was 98 percent and the secondary-school enrollment rate was 90 percent, whereas in China in 1980 the comparable figures were $300, 66 percent and 44 percent," University of Hawaii researcher Ting Yu reported in a 1999 study. "These aspects will make it more difficult for China to achieve the same level of economic growth and modernization as Japan did." (by Alan Boyd)

From http://www.atimes.com/ 08/15/2002

Is Asia Falling into an Economic Tailspin

When Marc Faber, the well-known prophet of doom and gloom, maintained in an interview in Asia Inc that agricultural commodities (oil palm, coffee and sugar) from Asia are the best things to hold for investors along with gold bullion - for which prices would multiply 10 times over to US$3,000 an ounce - there was some concern that he was reading the economic undercurrents of Asia and predicting a deeply rooted recession around the corner. "In times of an economic downturn, the best bet for investors would be holding on to agricultural stocks and gold, considered a good hedge against the exposure to technology-related stocks or the property stock markets," stated Arjuna Tjandra, an investment executive in a risk-consultancy agency based in Jakarta. Both these markets have been badly mauled and have shown few signs of recovery in the past 12 months. A equity dealer with state-owned Bahana Securities in Indonesia, Iwan Yoniton, pointed out the risk involved in holding on to property and technology stocks: "Many of these investments in property, banking and technology are underperforming, and it's symptomatic of the economic downturn in the Asian region. I advise investors to look at strong agricultural-based portfolios and brick-and-mortar businesses with strong fundamentals rather than invest in shares that are highly speculative and considered high-risk," he said. The fall in commercial and residential property prices is shared by Hong Kong, Malaysia, Thailand, Singapore and South Korea. The only exceptions to this rule are India and China. Both commercial and residential property prices are at an all-time low. "Regardless of whether you are looking for property in Thailand, Indonesia or Malaysia, prices are only two-thirds of what they were originally valued," maintained Quek Meng Lee, of an international property consultancy house based in Malaysia. "It's a good time to go bargain-hunting for strategic buildings and areas and during the upturn sell it for a quick buck," he added. The technology market has received a severe mauling as well. Technology growth was the pride of both Singapore and Taiwan. However, both these countries were overly exposed to a high-tech sector almost entirely dependent on the overall performance of the world and particularly the US electronics market. Now their gross domestic product (GDP) growth rates have been cut for most of 2002 to forecasts of less than 4 percent and less than 2 percent growth respectively. Singapore faces the worst manufacturing and construction contraction in more than 10 years, and Taiwan hangs precariously on the brink of recession. Taiwan, dependent on the semiconductor, integrated-circuits and foundry-design services, has seen a slowdown of more than 10 percent of its export orders since a year ago. And Hong Kong expects to see GDP growth of less than 3 percent for 2002 instead of its high of 10.5 percent last year. Hong Kong has suffered from a deflationary spiral of falling prices for the past three years, and a double-dip recession has pummeled its general trading indices. Even Malaysia's economy was not spared when its prudent government induced pump-priming measures. Its controlled currency situation has not saved it from the general Asian downturn either. Its GDP growth for 2002 has been revised downward to an average of 5 percent, barring any unforeseen global trade disasters. Chi Lo, the regional head of research for Standard Chartered Bank Global Markets in Hong Kong, wrote publicly saying that the fall in Asian share prices over the past 20 months compares to the 1997-98 decline, suggesting that Asian markets had been expecting a regional economic downturn much earlier than the US markets. "The extent and duration of the decline also suggest that many Asian markets might be passing through the maximum stress points." Likewise, margin trading for large companies in Asia has eroded as well. The market capitalization for large capped companies is only one-third of its PE (price to earning) ratio or net book value. And for the past few weeks, the Asian bourses have hemorrhaged badly, to the point of being anemic. Steve Fisher, an economic management consultant for Strategic Consulting Inc based in Atlanta, said the earnings fallout for such companies as Fujitsu, Ericsson, Apple Computer and even Taiwan Semiconductor Manufacturing Co (TSMC) is a sign that tech stocks have yet to bottom out. The recent slide in Wall Street and the battering of its tech index have not helped either. It's also a growing concern that foreign direct investment (FDI) trickling into emerging Asian countries such as Thailand, Indonesia and the Philippines is falling short of national expectations. "ASEAN [Association of Southeast Asian Nations] economies since last year received just 27 percent of the FDI that flowed to developing countries in Asia, down from around 60 percent in the early 1990s. This shortfall could be attributed to its structural reform problems that continue to worry investors," maintained Anwar Al Haq, a regional economist for a France-based multinational bank. He said China seems to draw the bulk of the FDI budget from international investors. "China received close to 60 percent of FDI last year and this year it's expected to increase by another few percentage points," he added. China is turning into a real threat for ASEAN countries. The stabilizing Chinese economy and its stellar double-digit growth have not failed to impress. As a percentage of its GDP, China absorbs as many imports from Asia as Japan. China is also trying to attract semiconductor and wafer fab investment that was previously the forte of Taiwan, South Korea and Singapore. Its movement up the manufacturing value-chain has created butterflies in the stomach of its older rivals. And it is competing with Thailand as well in lightweight manufacturing in the tool-and-die and precision-molding industry that will easily be worth $2 billion by the end of 2003. Thailand, in the meantime, is trying to establish itself as an automotive tool-and-die center for Asia. Can even the stellar growth of China at the expense of its neighbors possibly prevent the repeat of the Asian monetary crisis of 1997 and 1998? ASEAN secretary general Rodolfo Severino, at an ASEAN Brunei summit recently, said US-led volatility in the global market is unlikely to plunge East Asian economies into a 1997-type financial crisis since the region is now protected by huge current account surpluses and foreign-exchange reserves with low external debt risk. "In order to avoid being hit by rogue currency traders, there is a network of six bilateral currency swap arrangement in place, with funds in excess of $17 billion, led by China, Japan and South Korea," he said. According to economist Chi Ho, Asia is not as weak as before. Even the effect of Argentina's financial woes has been confined to the South American market, where the Asian markets showed only measured response in terms of rising bond spreads and falling stock prices and currencies. "Cross-border hedge funds are not as powerful now as they were four years ago. Also, Asian countries' external accounts have improved to absorb external shocks where its current accounts have turned into surplus since the Asian crisis. Foreign debts have been pared and foreign exchange reserves rose sharply," he said. Despite such assurances, the fact remains that economic growth in the Asian caucus is slowing down. It has also been found that Asian economies are increasingly vulnerable to a number of external shocks. These shocks include the slowdown in the US economy, the softening of Asia's information-technology market and even the volatility in crude-oil prices. More important, national reforms are sluggish in restructuring heavily indebted companies, restoring badly damaged banking systems, improving corporate governance and curbing corruption that is endemic in most Asian economies. There are also inadequate procedures in place for bankruptcy and liquidation of corporate debtors. "But these limitations are slowly being addressed," assured Anwar Al Haq, "both by the international funding associations like the World Bank and national governments." To reduce its vulnerability to financial turbulence, Asian economies must clean up banks, restructure domestic corporate debt and implement good governance policies that would benefit Asia in the long term. Keeping its house in order, and employing prudent fiscal policies is the first step in surviving the economic tailspin. (by Tony Sitathan)

From http://www.atimes.com/ 08/01/2002

World Bank Warns of Growth Risks Ahead

WASHINGTON (CNN) -- Asia and other parts of the world need to act now to avert a growing risk of severe environmental damage and "profound social unrest," the World Bank says in its latest development report. A global population of nine billion, six billion of them living in cities, will put enormous demands on energy, water, housing and education by 2050, according to the report. Release of the bank's 2003 World Development Report comes as large parts of Asia -- particularly China and India -- are battling devastating floods, and Europe is still assessing its own flood damage. It also follows a warning from scientists last week about the global health threat posed by a toxic brown cloud, three kilometers deep, that stretches from Afghanistan across South Asia to Bangladesh, China and parts of Indo-China. The cloud, which slashes sunlight, is thought responsible for tens of thousands of deaths from respiratory illnesses. According to the World Bank, the world in 2050 could have a gross domestic product of $140 trillion -- four times what it is now -- and significantly reduced poverty. But the bank's report says there is a risk growth could come at great cost to future generations. "Without better policies and institutions, social and environmental strains may derail development progress, leading to higher poverty levels and a decline in the quality of life for everybody," it says. World Bank chief economist Nicholas Stern said a global GDP of $140 trillion could not be sustained on current production and consumption patterns. "A major transformation, beginning in the rich countries, will be needed to ensure that poor people have an opportunity to participate, and that the environment is not damaged in a way that undermines their opportunities for the future," he said. Stern said rich countries should start the process by opening their markets to developing world exports, and by abandoning agricultural subsidies and other trade barriers that limit the opportunities for the goods that poor people produce most competitively. A long-term Asia Pacific economic outlook released earlier this month by forecaster BIS-Shrapnel said the region's two most populous countries, China and India, would lead growth over the next decade, with annual average increases of 7.0 percent and 6.5 percent respectively. According to the World Bank, the over-use of fragile land is especially critical for East and South Asia. Many of the methods that farmers use to boost agricultural production in the drylands is damaging the environment. Population pressure on arable land in Asia, particularly on the Inner Asia drylands, is making the area particularly vulnerable, the report says. China and Inner Asia's high steppe -- the largest remaining pastureland in the world which covers Mongolia and northwestern China -- has been the most affected so far. The bank says the world's water use is expected to jump 50 percent over the next 30 years. "By 2025, it is likely that three quarters of the world's population will live within 100 kilometers of the sea, placing huge strains on coastal ecosystems," it observes. The World Bank says it wants the political, private sector and civil society representatives attending next week's World Summit on Sustainable Development in Johannesburg to agree on steps that can be taken to ensure a balanced approach to growth. (by Geoff Hiscock)

From http://asia.cnn.com/ 08/22/2002

TOP°Ł

China: Shanghai Aims to Become Int'l Financial Center: Mayor

Shanghai Municipality, east China, has become the national financial hub and is trying to become an international financial center, said Mayor Chen Liangyu Monday. Chen told the opening of the city's working conference on finance that local banks had a total of 1.23 trillion yuan (140 billion US dollars) in assets. By the end of June, the outstanding deposits and loans of these banks stood at 920 billion yuan (110 billion dollars) and 680 billion yuan (80 billion dollars), respectively, he said. In 2001, the financial sector accounted for 13.8 percent of thecity's gross domestic product, compared with 10 percent in 1995. Shanghai banks lead the country in major indexes of performances, according to statistics. In securities, the Shanghai Stock Exchange (SSE), the first of the two bourses in China, has listed 675 companies and raised 410 billion yuan (50 billion dollars), since it was established 12 years ago. The capitalization of Shanghai's stock market has risen to 3.1 trillion yuan (373 billion dollars), against three billion yuan (375 million dollars) at the beginning. The SSE ranks 13th among over 200 bourses around the world in terms of capitalization, following the stock exchanges of Tokyo and Hong Kong. In recent years, Shanghai has become the national center of funds distribution, and leads the formation of national capital markets, including the interbank loans market, the bond market, and the foreign exchange market. Many Chinese banks, securities companies and fund management companies have set up their headquarters in Shanghai or moved to the city from other parts of the country. Chinese-funded banks in Shanghai make up six percent of the country's total in terms of deposits, loans and assets, while overseas-funded banks in the city accounted for over 50 percent of the country's total regarding their deposits, loans and assets.

From http://english.peopledaily.com.cn/ 08/06/2002

Beijing Slams `International Cities' Rivalry

The Ministry of Construction has lashed out at regional governments for ruining city planning, accusing them of wasting resources in attempts to compete with each other to build ``international cities'', the official Economic Daily reported yesterday. At the opening of a national urban planning conference in Beijing on Monday, Vice-Minister of Construction Chou Baoxing criticised some local governments for blindly pushing forward projects just to ``show off''. Although city planning is developing rapidly and many cities have seen profound changes, the problems cannot be ignored, Chou said. He accused many local governments of breaking the rules and ignoring the possible consequences in their rush to become ``international cities''. Consequently, huge plazas, broad roads and fancy government buildings have appeared everywhere, but infrastructure such as water supplies and sewage treatment has been ignored. Chou said some leaders were overdeveloping or destroying national resources due to their ignorance or desire for self-glorification. He said historic cultural and scenic spots were being destroyed for new buildings, with the money going to the rich and powerful. Corruption and illegal construction were rampant in certain cities, and this undermined good city planning. With leaders abusing their power and interfering in city planning, illegal use of land for construction was becoming common and a problem that proved to be hard to tackle. In some cities as much as one third of the floorspace built had been done by illegal construction. Also of concern was the random changes made to the height and purpose of buildings. To strengthen the Central Government's control on city planning, the State Council has issued a notice to combat these problems. In future, subordinate institutes would not be easily granted administrative power, which meant the planning of developments such as colleges and resorts would be controlled and managed by the city's planning department, the notice said. The drafting and planning approval procedures would be improved and the planning rules more strongly enforced. Special attention would also be given to ``harmonious development'', use of resources, protection of the environment, scenic spots, cultural resources and public security. Construction projects would have to comply with general city planning regulations and regional governments would not be allowed to override the regulations. (by Liu Qi)

From http://www.thestandard.com.hk/ 08/15/2002

.CN DN Registration Regulation Emerges

The Ministry of Information Industry (MII) August 15 promulgated the Management Regulation of Internet Domain Name Registration, which structurally readjust the existing the Interim Management Regulation of Internet Domain Name Registration, encouraging the registration of domain name of .CN, and prompting domestic regularization of domain name registration procedures. The interim regulation promulgated in 1997, which administered stringent and complicated check and approval procedure, largely stalled the adoption of registration of .cn. According to prior interim procedure, to check registration of DN suffixed by .cn by authority is required, which result in the cycle of registration lasting as long as five days. The interim regulation cannot satisfy the strong demand of domestic Internet high-speed development. Otherwise, the misconception that the overseas domain names are superior than domestic ones result in the worsening aftermath that many domestic websites switch to register overseas DN instead of the domestic ones. To mend and promulgate new DN regulation became more and more urgent and pressing for domestic enterprises. The new promulgation unshackles the fetters of registration of .cn domain names, providing a sound and relaxing policy circumstance for the registration of domestic top domain name. Source from CNNIC (China Internet Network Information Center) substantiates that a set of dramatic changes and reforms in .CN domain name registration is kicked off. First of all, the DN registration procedure would be largely simplified. Except the government DN gov.cn, anyone can register a domain name suffixed by .cn through Internet without submitting any written document. The DN submission will be accepted and opened in six hours, which substantially shorten the cycle of DN registration. Besides, to relax the restriction on DN registration and open the domain names to individuals in certain form, and to register the secondary DN suffixed by .cn are also permitted. The administration exerts the maximum efforts to open DN resource, slash the individual charging standard, prompt widespread adoption of Internet in individuals and organizations, and dispose the disputes between DN and intellectual property right. CNNIC will establish community dispute-solving mechanism featuring fast, efficient, and cost-effective. Once the dispute access into disposal procedure, the authorities would make arbitration in fourteen days. For further enforcing the order of domestic DN registration market, the new regulation stipulates implementing the documentation record mechanism regarding DN registration services. For ensuring the healthy operation of domestic Internet, any individual or organization's acts interfering or disturbing operation of Internet are prohibited by the regulations. This new regulation would take effects from September 30, 2002. Source has it that according to the stipulation of MII, CNNIC would release the .cn and Chinese DN registration implementation specifications, DN Dispute Solving Procedures and other relevant stipulations.

From http://ce.cei.gov.cn/ 08/16/2002

2002 Forum on China Network Media Ended in Suzhou

The two-day forum on the network media came to an end in Suzhou August 17. Persons in charge of Information Office of the State Council, All-China Journalists Association and other participants delivered speeches at the closing ceremony. The forum focused on the challenges and opportunities for China's Internet media, on the operations, management and development trends of the media, and on the new technology application and how to use the Internet as a news and media source. The forum was brought to an end in a great success and it would play a significant role in promoting China's Internet development. Participants jointly signed a convention for protection of network copyrights and made promise to protect information holders' rights. The convention will regulate related copyright problems and bring China's Internet media to a lawful orbit.

From http://www.china.org.cn/ 08/20/2002

Loan Plan to Boost Retail Stock Market

Beijing is expected to allow individual investors to mortgage their stocks so that they can buy more stocks, as part of measures to boost the bearish stock market, official media said yesterday. Quoting officials with the Financial and Economic Commission, which comes under the National People's Congress, International Financial News said the current regulation applying to securities firms' borrowings against stocks would be extended to personal investors. The change would be introduced by the end of the year, said the officials, who had been involved in drafting the regulation. International Financial News is a sister newspaper of the party mouthpiece People's Daily. Securities firms welcomed the news. ``Apparently it is aimed at activating the thinly traded market and increasing trade volume,'' a securities manager in Shanghai said yesterday. Investors would be required to obtain loans through legal financial channels. Despite personal borrowings against stocks now being banned, some securities firms have been engaged in lending money to retail investors with their stocks as collateral. This has resulted in disputes between lenders and the borrowers when brokers sell investors' stocks during market slumps, as the practice had no governing rules. The regulation on brokers' borrowing against stocks - launched on February 14 this year - named five kinds of stocks that were not allowed to be used as collateral: Stocks of companies that made a loss over the past year; Stocks whose prices fluctuated more than 200 per cent in the past six months; Stocks whose circulating shares were concentrated among a small number of shareholders; Stocks that were suspended from trading or had been de-listed by China Securities Regulatory Commission (CSRC); Stocks which were under special treatment by the CSRC. In addition, securities companies were prohibited from obtaining loans amounting to more than 60 per cent of the value of collateral stocks. Mainland securities firms began taking out loans against stocks in 2000 and by the end of last year had borrowed over 18 billion yuan (HK$16.96 billion) in this way. Beijing securities expert Zhong Wei said commercial banks could be keen to tap this market. The mainland stock market was a huge resource that should be made full use of, he said. (by Pamela Pun)

From http://www.thestandard.com.hk/ 08/24/2002

Overseas-funded Online-bank Debuts in China

The Hong Kong-based Bank of East Asia (BEA) has become the first overseas-invested bank to receive approval to operate online services in China. BEA would offer exchange rate and interest rate information, account checking, currency remittance and other online-banking services at www.hkbeacybanking.com.cn during its initial operation period, Timmy Leung, president of a BEA sub-branch in Shanghai, announced Wednesday. The online services would go into full swing when the seven BEA branches and a sub-branch in the Chinese mainland complete all the necessary work according to the People's Bank of China rules, Leung added. Online-banking was considered a crucial area for overseas-based banks to explore business in China, according to Ji Yunbing, deputy president of the BEA Shanghai branch, saying that BEA hoped to foster a close relationship with its customers. Statistics from the world's top 100 banks show that the cost of running online-banking accounts for just one tenth of that of counter services, and the investment in online banking services by global financial organizations increased by 15 percent between 1997 and 2000.

From http://ce.cei.gov.cn/ 08/29/2002

Glitches Mar Japan ID System Debut

TOKYO -- Technical glitches and grass-roots resistance atypical of Japan accompanied Monday's debut of the country's first national identification system, a registry designed to battle bureaucracy by centralizing personal data. The system will assign an 11-digit identification number to each of Japan's 126 million citizens - much like the U.S. Social Security number - and gather basic information on each in a networked central database: name, address, sex and birth date. Under the system, each local government will be responsible for entering the data and each citizen will be issued a photo ID card. The idea is to allow people to more easily process social benefits, get passports and other official documents, cutting down on red tape among municipal, prefectural and national governments. Currently, Japanese often have to pay numerous visits to various government offices to complete a single administrative procedure, such as registering a change of address. Records are often filed on paper and identification can require obtaining a slew of documents - a process the new system aims to streamline. But the new system has stirred controversy since its inception. Opponents say it tramples individual privacy and could be used by the government to quell public dissent. Even before Monday's launch, the ID system was undermined by five municipalities refusing to register their information, and by Yokohama, a city of 3.4 million people, saying it would register information only from those who consent. The mayor of Kokubunji - one of the municipalities opposing the system - terminated his city's connection to the network at a Monday morning news conference. "It is regrettable that this has to be done, but the people have not been properly consulted about this system," Nobua Hoshino said. About 70 people demonstrated against the system Monday in front of Japan's Public Management Ministry in downtown Tokyo. "Although we are not against the registry system in principle, we believe there are some privacy and security issues that still have not been dealt with," said spokesman Satoshi Arai of the national bar association, which has formally lodged its concerns with the government. As the system got up and running, several municipalities - including ones in the western prefecture (state) of Kyoto, the central region of Toyama and the metropolis of Osaka - also reported temporary computer glitches that prevented them from tapping into the national network, local officials said. Public Management Minister Toranosuke Katayama defended the system, saying, "If there are places that remain opposed to the system, I would ask for more dialogue so that we can reach an understanding." To instill trust, the government is vowing tough action against abusers of the system. Those who leak personal information can face up to two years in prison and a fine of $8,300, ministry spokesman Yoshiuki Baba said. The protests come just months after a Defense Agency official admitted to having secretly compiled private information on people who had requested documents under the country's freedom of information act. News of the list sparked public outrage and raised concerns that government officials could easily collect and leak confidential information about anyone.

From http://www.washingtonpost.com/ 08/05/2002

Credit Card Issuers to Adopt Sony's E-Money System

TOKYO - Major credit card issuers will adopt the Sony Corp group's "Edy" electronic money system for their credit and identification cards, industry sources said Monday. Initially, companies such as UFJ Card Co and Life Co will issue cards incorporating Edy e-money functions mainly for use by their employees, the sources said.

From http://www.japantoday.com/ 08/20/2002

Seoul Unveils E-Trade Promotion Plans

The government yesterday adopted mid- and long-term action plans for e-trade, calling for all Korean firms to carry out trade activities efficiently by means of the Internet. The strategies for the promotion of e-trade among local firms were revealed at a meeting chaired by Commerce, Industry and Energy Minister Shin Kook-hwan. The meeting at the Inter-Continental Hotel brought together some 40 representatives from the government, private firms, the academic field and related agencies. The development vision for e-trade centers on four issues - the installation of Internet-based e-trade infrastructure, establishment of e-trade systems at small and mid-sized firms, installation of a global e-trade network, and the improvement of laws and institutions to create a favorable environment for e-trade. The action plan set out short-term and long-term implementation strategies. As a short-term measure, the commerce ministry plans to revise the system of service charges for electronic data interchange (EDI) in a bid to alleviate the burden on small firms for e-trade costs. The ministry is also contemplating aiding in the establishment of "e-trade houses" that would give support to as many as 3,000 prospective small exporters by 2005 in carrying out exports on the Internet. E-trade houses are an Internet version of general trading houses (GTCs) which offer trading services to small exporters, a ministry official explained. Another government concept for e-trade promotion calls for the state-run Korea Trade-Investment Promotion Agency to offer opportunities to small local firms to engage in export negotiations with foreign buyers via Internet-enabled video phones linking its headquarters to its 40 overseas offices from next month. With a view to building an environment for e-trade on a mid- and long-term basis, the ministry also plans to install a comprehensive electronic trade platform by 2004 that bundles together all trade procedures, ranging from export/import approval to customs clearance and payment settlements. The ministry also plans to complete its ongoing project with Japan to achieve "paperless trade" between the two neighbors by 2004 and take the lead in the installation of an East Asian e-commerce network, known as the Pan-Asian e-commerce Alliance (PAA), by 2005. It will invest some 10 billion into the PAA project. The government's mid- and long-term plans also include measures to streamline complicated trade procedures and enhance related laws and practices that have previously affected promotion of e-commerce. The ministry hopes that through effective implementation of the plans, the country will reduce trade costs by $14.5 billion a year and increase additional exports by $7.9 billion, creating more than 120,000 jobs by 2010. To establish a more effective implementation of its blueprint, the ministry intends to set up a promotional committee consisting of experts from the public and private sectors. (by Sim Sung-tae)

From http://www.koreaherald.co.kr/ 08/13/2002

Mongolia on Track to Achieving Millennium Development Goals

MANILA, PHILIPPINES - Mongolia is on the right track to achieving the United Nations' millennium development goals (MDGs), according to the Asian Development Bank's (ADB) Country Strategy and Program Update (CSPU) for 2003 to 2005 for the country. Mongolia has made good progress in addressing non-income poverty and in achieving the MDGs, particularly reducing infant and under-5 mortality, improving health care, and increasing school enrolment, notes the report. However, poverty reduction is hindered by economic growth that is unable to create sufficient jobs or ensure steady improvement of income, particularly for the poor, the report points out. ADB recommends greater emphasis on accelerating economic growth while maintaining economic stability. ADB will continue to help Mongolia promote economic growth for job creation and to improve the provision of essential services for the poor. More specifically, ADB will continue to assist the strategically selected sectors of agriculture, finance, public sector reform, social (education, health, and social security), urban development, and roads. ADB proposes maintaining lending levels to Mongolia at between US$32 million and US$34 million annually from 2003 to 2005. It also proposes an annual program of technical assistance amounting to US$3.1 million. The report notes that Mongolia's long run economic prospects depend on how the country can diversify its economic base to maximize its potential in the world economy. In the short term, however, the country's future depends largely on the Government's success in maintaining and improving macroeconomic stability and providing a regulatory and institutional environment conducive to private sector-led growth.

From http://www.adb.org/ 08/22/2002


TOP°Ł

Unemployment Figures Hide Depth of Indonesia's Despair

The number of unemployed people increased by 400,000 to around 8.4 million during the first half of this year, the Central Bureau of Statistics (BPS) said in its latest quarterly survey. However, independent experts say the figure does not reflect the true picture of the pressing unemployment problem in Indonesia. The BPS survey sampled 36,000 households. The result of the survey was seen by The Jakarta Post Tuesday, but there was no explanation about the figures as the bureau has yet to complete its report. A BPS source said the report would be published in September. The BPS unemployment figure refers to open unemployment, which the bureau defines as the number of people categorized as part of the labor force but who have no job and are seeking work. "This (figure) does not show the real unemployment problem," former labor minister Bomer Pasaribu said. He said that by using the BPS figure, the country's unemployment rate would only be around 8 percent, which he said was lower than the rate in some European countries. The labor force is defined by the BPS as: "Persons aged 15 years and over who, in the previous week, were working, temporarily absent from work but having jobs, and those who did not have work and were looking for work." Bomer said that since unemployed people in developing nations like Indonesia were not supported by government social welfare, the number of disguised unemployed should also be taken into account to measure the true unemployment rate. "According to my calculations, the number of unemployed in this country is between 40 million to 45 million because there are so many disguised unemployed here," he said. Disguised unemployment is defined as the number of those in the labor force working less than 35 hours a week. Bomer's estimate has often been cited by the press. Noted economist Djisman Simandjuntak shared Bomer's opinion. "The most worrying for our country is the disguised unemployment figure, since the rate is so high," he said, adding that people categorized in this group were doing any kind of job in order to survive. Djisman said the ongoing economic and political crisis which hit the country in the late 1990s had caused many companies to completely shut down their businesses or shrink their operations, forcing many people out of work. The number of unemployed will multiply as some 2.5 million job seekers are entering the job market every year, and an estimated 400,000 illegal Indonesian workers have just been expelled from Malaysia. "This can really create serious social problems here," Djisman said, pointing to rising crime rate, infant mortality and social depression. Economists have said that to absorb the huge number of job seekers, the country's economy must be able to grow at pre-crisis levels of around 6-7 percent per year. The government has only targeted an economic growth of 4 percent for this year. But the National Development Planning Agency (Bappenas) has said recently that the world's economic slowdown coupled with the poor investment climate at home would only allow the domestic economy to grow by three percent this year. "Unless the country is able to attract more investors to put up money for business activities here, the problem of unemployment can not be resolved," Djisman said. The Investment Coordinating Board (BKPM) said that foreign direct investment (FDI) during the first half of this year dropped by 42 percent to US$2.5 billion compared to the same period last year, while domestic investment plunged by 70 percent to Rp 11 trillion. Analysts have said that the drop in investment was due to the poor investment climate due to, among other things, continuing labor conflicts, security problems, poor implementation of regional autonomy policy, the unfavorable global investment climate and corruption at all levels of government, the bureaucracy and the judiciary. The fall in investment occurred at a time when the government managed to improve the country's macro economic condition such as slowing inflation, a stronger rupiah and lower interest rates. The continuing labor conflict has also affected the country's export performance as foreign buyers are diverting their orders to other neighboring countries who can guarantee a timely delivery of goods. According to data from the central labor dispute agency (P4) at the Ministry of Manpower and Transmigration, the number of laid off workers during the first half of this year reached 62,666. If this figure is annualized it already nears the 1998 figure of around 131,000, when the country first plunged into the regional economic crisis. According to P4, most of the laid off workers come from export-oriented companies which had either shut down operations or streamlined their businesses to cope with the unfavorable economic condition. (by Rendi A. Witular)

From http://www.thejakartapost.com/ 08/14/2002

Lao: National Industry Expands Over Past Year

Revenue from the industrial sector from the last nine months has reached 187.7 billion kip indicating growth in the national industrial sector. The revenue is equal to a growth of 8.2 per cent in industrial contributions to the economy compare to the same period last year. The figure was released by the Minister of Industry and Handicraft recently at a review meeting on industry development. The minister hailed it as a great success despite the problems faced by the country's small industrial sector. Government policy promoted the expansion of domestic potential to produce goods for domestic consumption and for export.The growth figure included 11.3 per cent in the processing sector, 1.1 per cent in electricity and 12.8 per cent in mining. Current export volumes from Laos are not high if compared with the neighboring countries and the trade benefit between Laos and other countries accounts for only 10 to 12 per cent of the GDP.

From http://www.kplnet.net/ 08/21/2002

IMF to Disburse US$ Six Million for Laos

The International Monetary Fund (IMF) has decided to disburse a US$ six million in loans for Laos after reviewing economic development in the country. This is the third installment of a US$ 40 million credit facility agreed upon by the IMF and Laos in April of last year. The credit is planned to be disbursed over a three-year period. In a statement released in Washington after the decision, the IMF Executive Board said Laos has managed to sustain economic growth despite a recent increase in inflation. However, Laos should focus on improving tax revenue, restructuring banks and reorganising state-owned enterprises, the IMF Executive Boad noted. The loan has a yearly interest rate of 0.5 percent and is payable over 10 years with a grace period of five and a half years on principal payments.

From http://www.kplnet.net/ 08/29/2002

Malaysian E-Business Provider Makes Headway into Myanmar

YANGON: Local e-business systems, solutions and services provider Skali said it would export its expertise into neighbouring Myanmar, with the signing a memorandum of understanding for technical collaboration with Myanmar World Distribution Co Ltd (MWD). The collaboration will see Skali (www.skali.net) providing total e-business solutions and services to the Myanmar market, the Malaysian company said in a statement. "We are thrilled with our inroads into Myanmar, which is gaining incredible momentum in the development and deployment of ICT (information and communications technology) in its private and public sectors," said Skali president Tengku Farith Rithauddeen. "Myanmar remains an exciting export market and our venture offers a unique exposure to the Myanmar economy. "We hope it will open doors to more Malaysian netpreneurs in collaborating and sharing their experience with their counterparts in the region," he added. The business and technical collaboration will also bring enormous benefits to the growth of Myanmar's ICT sector, and is in line with the call by the governments of both countries to narrow the development gap for closer Asean integration, said Skali, a Multimedia Super Corridor (MSC) status company. "We are basically offering all our services to the Myanmar market," said Farith. "Skali shall provide its dedicated team with business experience and technology expertise to support MWD and its customers in such areas as technology, marketing and project management," he added. "The MOU will accelerate technology transfer efforts by our Malaysian counterpart, besides encouraging further technical cooperation between both parties," said MWD managing director Patricia Su. "We believe this will not only bridge the technical gap, but (that we) stand to gain long term commercial benefits as well," she added. One of the Internet pioneers in Malaysia, Skali was a "dotcom" long before the term became popular, or fell into disrepute. It now focuses on designing and developing in-house e-business systems and solutions, to clients from industries like manufacturing, finance and banking, enterprises, e-businesses and telecommunications. The company also offers consultancy and incubation services to budding "netpreneurs," putting them in contact with venture capitalists and investors through its dedicated Skali Netpreneurs Acceleration Programme (SNAP ). Skali experienced almost 100% revenue growth in 2001, claiming to have registered revenues of more than RM5mil (US$1.3mil) compared to the year before. It is projecting double-digit growth this year with the expansion of its core operations. MWD's expertise and experience in software development, systems integration, network implementation and hardware distribution.

From http://star-techcentral.com/ 08/22/2002

Philippines: Dev't Plan Targets Employment Levels

The National Economic and Development Authority (NEDA) is targeting 31.5 million Filipinos to be employed by 2004 or an increase by 3.5 percent from 2000 level.This forecast is contained in the Medium Term Philippine Development Plan, 2001 to 2004 (MTPDP) - the Macapagal Arroyo Administration's blueprint from which the country's socio- economic development is based from. The MTPDP also projects an annual average addition of employed Filipinos to reach one million while another one million Filipinos will be deployed overseas. Based on the MTPDP, the services sector shall continue to be the biggest employer. The number of employed in this sector shall increase from 12.8 million in 2000 to 14.3 to 14.4 million in 2004. In particular, the tourism sector is expected to generate an additional 1.0 to 1.6 million jobs while the ICT sector, on the other hand, will generate an additional 52,000 to 57,000 high value jobs. Employment in the industry sector will increase by 690, 000 to 760,000 jobs. In addition, ICT manufacturing mostly for the export market will generate 19,000 jobs. The industry sector on the other hand is expected to slightly increase its share from 16.2 percent in 2000 to around 16.5 percent by end of 2004. As the implementation of the Agriculture and Fisheries Modernization Act (AFMA) takes full swing, real productivity in agriculture shall increase. Its share to total employment shall decline from 37.1 percent in 2000 to an average of 35.6 to 35.7 percent during the medium term, but the magnitude of employment will increase from 10.2 million in 2000 to a range of 10.8 to 11.0 million by 2004.

From http://www.mb.com.ph/ 08/10/2002

NSO Registry System IT Project Brings Services Closer to People

The National Statistics Office (NSO) has significantly increased the number of clients it served within the day they requested for their documents and brought its services closer to the citizenry through the new Civil Registry System Information Technology Project (CRS-ITP). Gone are the days when the public had to wait for weeks before they could get their requested civil registry documents. After 10 months of implementation of CRS-ITP, one out of every two clients gets his document within the same day or the next day. With a daily average of about 12,000 requesters that NSO services for the past six months, this translates to 6,000 satisfied government clients per day. This means further, that half of the 1,443,964 applications that NSO served for the first six months of this year were pleased with the government's frontline service. Queueing time, or the time that clients had to wait in line to request for their documents was also reduced. The results of the June 2002 Customer Satisfaction Survey (CSS) round revealed that more than half (52 percent) of the clients waited for only one hour before they were served at the service counters while only 12 percent of them had to stay in line for three hours or more. The reverse was true in the March 2002 round of the CSS, where 46 percent had to wait for three hours or more and only 15 percent queued for one hour. The CSS is a quarterly survey conducted in the East Avenue CenSC and at the Releasing Area at NSO Quezon Avenue, both in Quezon City. This measures, among others, the clients' satisfaction or dissatisfaction with the NSO services, the queueing time, and some demographic characteristics of the clients. As of June 2002, 46.5 million out of 76.5 million birth records from 1945 to 2000 have been loaded in the computerized database. Those in priority years 1970-1980 are all been converted into digital format. For those births occurring in 1960 to 1969 and 1981 to 1986, conversion rate ranged from 87 to 100 percent. With these birth records in the database, copies can be released within the day or the next day, once requested. Processing time for unconverted documents has likewise been reduced to six working days. The NSO also succeeded in bringing its services closer to the citizenry. Aside from the six "Census Serbilis Centers" (CenSCs) opened in Metro Manila, NSO also opened eight regional CenSCs. Four are in Luzon: in the City of San Fernando in La Union, Region I; Tuguegarao City in Region II; San Fernando City in Pampanga, Region III; and Baguio City, Benguet in CAR. Two are in the Visayas: in Iloilo City in Region VI and in Cebu City in Region VII. Two are in Mindanao: in Cagayan de Oro City in Region X and in Davao City in Region XI. Three more outlets are scheduled to open within the month of July, namely, CenSC Butuan City in Caraga Region, CenSC Tacloban City in Region VIII, and CenSC Zambo-anga City in Region IX. All regional outlets will have been rolled out by the end of the third quarter this year. The same services provided in Manila can now be availed in these outlets, which means that the public need not spend so much time and money in coming to Manila to apply for copies of their documents. They can be served in their respective regions regardless of where their vital events have been registered. By January 2003, NSO would also start opening the provincial outlets. Statistics for June showed that 15 percent of the total requests were applied at the other Metro Manila outlets while another 16 percent were from the eight regional outlets. Only 48 percent of these were received at the main outlet at East Avenue, Quezon City, where all requests were filed prior to the implementation of CRS-ITP. This resulted to shorter queues and less congested service areas. On-line application also gained increasing patronage with an average of 800 website (e-Census.com.ph) visitors per day in the past three months. Application through the telephone (NSO Helpline Plus-737-1111) also continued with an average of 1,300 daily applications. These facilities provide the public with the option of requesting for their documents without leaving the comforts of their homes or offices, through the telephone and the Internet. Requested documents are delivered to the clients by courier service. On the average, 11 percent of the total requests for June were through these facilities. These improvements in the delivery of NSO services were reflected in the clients' satisfaction level as shown in the results of the June CSS where more than half (56 percent) of NSOs clients were either satisfied or very satisfied with the way NSO did its job. This was 13 percentage points higher than in March at 43 percent. On the other hand, those who were either dissatisfied or very dissatisfied declined to 24 percent in June from 32 percent in March. Prior to the implementation of NSO's computerization project, the proportion of these clients fell below 40 percent, with a low of 19 percent (May 2001) and a high of 32 percent (February 2001). This increased to over 40 percent after the project started in the last quarter of 2001. For the past six months, passport and embassy purposes were the most dominant reasons for securing civil registry documents and specifically, they needed their passports for employment abroad. Other reasons included: local employment, school, GSIS/SSS, BIR, PRC board examinations, baptism, and marriage requirements. Seventy-nine percent of all applications were for copies of birth certificates while 15 percent were for marriage certificates. Three percent were for authentication requests, two percent for certificate of no marriage, and one percent for death certificate. (by Edu H. Lopez)

From http://www.mb.com.ph/ 08/11/2002

Implementation Improves for WB-Financed Projects

The pace of implementation of government projects supported by the World Bank improved by eight percent over the past year (June 2001 to June 2002), according to the World Bank. Gross disbursements on the World Bank-financed portfolio went up from $126 million last year to $136 million this year. "After three consecutive years of declining performance, I am pleased to see this turnaround, despite the difficulty in putting up counterpart funds brought about by the tight fiscal position of the country," said Robert Vance Pulley, Country Director for the Philippines. An even more significant improvement was shown in the disbursement ratio, which is the percentage of available funds that are drawn down or spent on projects during the year. This ratio increased from 12 percent last year to 15 percent this year, a marked improvement of 25 percent. A 15 percent disbursement ratio implies a project implementation period of about 6.7 years compared to 8.4 years when the disbursements ratio was 12 percent. While this improvement is encouraging, the Philippines should further improve to at least a 20 percent disbursement ratio, given that most projects are planned for a five-year period," Pulley said. Prior to 1999, the Philippines was disbursing as much as 24 percent implying a four-year implementation period. Among the World Bank assisted projects that registered impressive turnarounds over the past year are the Third Elementary Education Project (TEEP), implemented by the Department of Education (DepEd); the Social Expenditure Management Project (SEMP), implemented by the Department of Budget and Management, the Department of Social Work and Development (DSWD), and DepEd; and the Second Subic Bay Freeport Project (Subic II), implemented by the Subic Bay Metropolitan Authority (SBMA).. TEEP's disbursement ratio doubled from 8 percent to 16 percent, shortening the implementation period from 12 years to 6 years. Subic II's and SEMP's disbursement ratios increased dramatically - from 10 percent to 34 percent and from 5 percent to 33 percent, respectively. Besides this dramatic improvement in the pace of project implementation, DepEd was also able to generate textbook savings of about US$20 million (P1 million) by adopting procurement reforms. The World Bank, however, also noted several projects that require additional efforts to improve implementation, These are the Community Based Resource Management Project (CBRMP), the Mindanao Rural Development Project (MRDP), the LGU Finance and Development (LOGOFIND), the LGU Urban Water and Sanitation Project (LGUUWSP), and Water Districts Development Project (WDDP).

From http://www.mb.com.ph/ 08/13/2002

E-Commerce Fails to Take Off in RP, Lack of Viable Payment Sol'N Blamed

E-commerce never took off in the Philippines because a viable payment solution was not available. Since there was no mass-based payment solution and not much choice for you to buy online, local developments in e-commerce basically moved at a snail's pace, said Yehey.com Chief Operating Officer Kevin Khoe. The idea to use ATM cards as a viable payment option came about from observation and need. "Credit cards, although popular in other countries as a payment option, are not widely spread and used in the Philippines. ATM's on the other hand are ubiquitous. There are about 14 million ATM cardholders in the Philippines. From this, we saw that a viable payment option is available right now through this method, we only need to develop a way to use it," Khoe explained. Yehey.com, one of the popular portals in the Philippines has developed PayPlus+, the first ATM-consortium-based payment gateway in the world. The PayPlus+ system allows merchants who do not have online payment facilities to readily get one by simply using the PayPlus+ service. This new service allows the highly secure automatic debit of money from a user's registered ATM card when purchasing items online. "We knew that growth in the Internet industry locally will continue even with the crash. Growth in this sector is inevitable. So we thought of ways of exploiting this position by thinking up ideas that will be beneficial and indispensable for the Filipino," Yehey.com Chief Technology Officer Jason Banico said. All a user needs to do to use the PayPlus+ service is to register at yehey.com. As part of the registration process, the user registers his ATM card - he will be shown a list of banks to choose from, enter the card number and the PIN. Next time the user wants to buy an item with a PayPlus+ facility, he only needs to log-in, select the card he wants to use and put in his PIN for that card to pay online. According to Banico, the process is very fast, instantaneous and highly secure. Yehey.com's PayPlus+ uses Microsoft SQL Server 2000 and Windows Advanced Server 2000. It also uses .NET technologies such as C# and ASPX. Data is formatted through Extensible Markup Language (XML). Microsoft Visual Studio.NET was used in developing special applications for the system. Banico has expressed his admiration for Microsoft's solution because of the very useful features and characteristics of its products that addressed salient issues in their project. "One aspect of our system is that a merchant's servers and our servers communicate over the Web. Communication between our server and the merchant's servers - whatever platform or solution they're using - is never a worry with Microsoft, using .NET's ability to communicate with other server platforms without a hitch." Yehey.com further lauded Microsoft's .NET vision. The .NET vision of having everything accessible on the internet is a vision that Yehey.com also shares. In particular, Banico mentions the ability of .NET's web services to allow effortless expansion to other devices. "Its solutions are very 'mobile' that it can be applied to different platforms like phones, handhelds and webtablets." This ability, Banico said, will ensure that the scope of PayPlus' uses can be readily expanded without worrying about compatibility with other media. The inherent security options for each Microsoft product is translated to a worry-free work environment, a fact that is very crucial for a system that will move money electronically. "In order for this project to succeed, we had to present this payment system to the banks. The banking institution is one of the most conservative of sectors and a bit cautious when looking at new technologies. The fact that they signed up with PayPlus+ is a testament to the security features of our system," Banico added. Just as important, cost of ownership was a prime consideration. "The .Net solution is one of the most cost-effective I have seen. We have already used its impressive scalability features in making savings decisions in terms of bandwidth usage, which is very expensive in the Philippines," Khoe said. PayPlus+ began implementation June 2001 and was finished March 2002. According to Khoe, a pilot program for the payment system is already online at www.yehey.com. A formal public launch will commence as soon as more online merchants come on board. Yehey.com will definitely not be content to just rest on its laurels after the innovative PayPlus+ system is introduced to the public. The company is putting in more services that will utilize the unique system it has developed. "We plan to put in services such as bills payment, crediting to accounts, and common bank transactions. We want to evolve from being just a payment enabler to a banking intermediary," Khoe added. (by Edu H. Lopez)

From http://www.mb.com.ph/ 08/16/2002

Excel Systems to Build Assembly Plant for Scooters in the Philippines

Langley, B.C.-based Excel Systems Inc., a maker of solar-powered three-wheel scooters, has selected General Santos City as the site of its C$78 million Southeast Asian assembly plant. The units are the size of standard bicycles and run at a speed of approximately 15 kilometres per hour. Operations will begin in the second quarter of next year, and the scooters will be promoted in key cities across Southeast Asia.

From Asia Pulse 08/20/2002

BIR Poor Collection Traced to Economic Slowdown

Collections of the Bureau of Internal Revenue (BIR) continued to drop during the first seven months of the year, raising the collection deficit to more than R60 billion and derailing further the economic recovery program of the government.BIR and Bureau of Treasury records obtained by the Manila Bulletin showed that the collections from January to August only totaled R238.7 billion, which was R60.7-billion short of the target of R298 billion. The biggest shortfall of R24.9 billion was incurred last month as the agency raised only R12.3 billion as against its monthly goal of R37.3 billion. Top revenue officials said, however, that the August figures were still incomplete and the deficit may be cut when collection reports from the provinces come. They continued to blame the continuing economic slowdown as the cause for the poor collection performance. One veteran tax collector, San Pablo revenue district officer Edmund Vasquez, who has already attained his collection target for the entire year as of last month, said there is no secret formula in raising tax collection. Vasquez said that "if the economy is good we will be collecting more, but less if it is bad such as what happening now." Other revenue officials predicted that the bureau could not possibly hit its R447-billion target for the year because it was based on brighter economic prospects which did not materialize. They said the target was simply unrealistic and unreasonable as it was set by fiscal authorities without consultation with the BIR which collects roughly 75 percent of the total revenues of the national government. Through the years, they said, collection schedule is determined not on the basis of economic growth but on the budgetary requirements of the government. While many of the 119 district officers of the BIR failed to hit their targets, few have succeeded like South Manila RDO Zeny Garcia, Lorna Tobias of Binondo, Ernie Kho of Novaliches and Rose Ragasa of Taguig. (by Jun Ramirez)

From http://www.mb.com.ph/ 08/22/2002

4.7% Growth Seen for S'pore Economy

HANG on to your hats. Singapore's economy will exceed all forecasts so far to grow at 4.7 per cent this year, and roar to 8.4 per cent growth next year.So say Nanyang Technological University (NTU) academics, who have a track record of spotting turning points in the economy. Their prediction exceeds the Government's forecast of 2 - 4 per cent for the year, and their own one in January of 4 per cent growth for the year, and 6.4 per cent in 2003.The dons say this means good news on the job front, too. Employment will ''begin to expand by the fourth quarter of 2002 and continue right through to 2003'', they say in their latest forecast for the economy. The corporate scandals in the United States, which is Singapore's No 1 export market, are unlikely to derail the American economic recovery, but postpone it by two quarters, according to the academics. Singapore's sharp upswing is already well under way with a strong 8.2-per-cent growth likely in the current July - September quarter and an even better 9.3-per-cent expansion in the October - December quarter, Associate Professors Chen Kang and Tan Khee Giap said yesterday. The key manufacturing sector - accounting for a quarter of the economy - is once again leading the charge. Led by the electronics and pharmaceutical industries, this sector is forecast to grow by nearly 10 per cent this year, a vast change in its fortunes compared to last year's 11.5 per cent shrinkage. From the economy's 2 per cent shrinkage last year to the 4.7 per cent growth forecast for this year would amount to a remarkable turnaround of nearly 7 percentage points. While the US economy is still weak, the Asia-Pacific region is leading the recovery, the economists added. However, Dr Chen Kang made the point that the pessimism in the US financial markets after the Sept 11 attacks last year and the Black Monday meltdown in 1987 had been short-lived. The academics discounted fears of a double-dip recession in the world's largest economy. For that to happen, they said, the US economy would have to shrink in the third and fourth quarters, which they felt was highly unlikely.However, they felt that the full recovery in the global electronics industry would be pushed to the fourth quarter of this year and into next year. (by Narendra Aggarwal )

From http://straitstimes.asia1.com.sg/ 08/08/2002

S'pore Can Become An Entrepreneurial Society

(SINGAPORE) Singaporeans can become an entrepreneurial people. But to achieve this, Singapore needs to develop a creative as well as a culturally vibrant society, Prime Minister Goh Chok Tong said.And it must keep up the efforts to revamp the education system to foster an entrepreneurial spirit among the young.'To support our entrepreneurs, we need to develop an overall environment that encourages people to discover, create and experiment,' said Mr Goh in his National Day rally address last night. He noted that studies in the US have shown that entrepreneurship is closely correlated with the level of cultural vibrancy. Other research has also shown that the arts can help individuals become more creative in areas beyond the arts.'(The arts) are an important source of inspiration and a powerful avenue for individual expression,' he said. What's more, a culturally vibrant city attracts global creative talent. 'Creative people are highly mobile. They do not slavishly go to where the jobs are. They choose where they want to work based on their lifestyle interests, and the jobs and prosperity follow them,' Mr Goh observed.' Singapore needs a few little 'Bohemias' like Holland Village, Siglap and Club Street, where they can gather, soak in the ambience and do their creative stuff in night clubs, bars or wherever. ''Maybe we should allow dancing on bar tops. (Wong) Kan Seng, you are Home Affairs Minister, what do you think?' he added, drawing laughter from the audience. He added that the large investment in the Esplanade arts centre is a clear signal that Singapore understands the importance of arts and culture in its efforts to become a cosmopolitan city. 'If we are to prosper economically, we cannot focus on the economy alone,' he emphasised. Meanwhile, the restructuring of the education system will continue. 'I take the view that entrepreneurial instincts and skills can be developed from young,' said Mr Goh. This is why Singapore has begun restructuring its educational curriculum and methods of teaching to produce students who can think creatively and unconventionally. Schools have also started encouraging the spirit of enterprise, he explained. For example, many schools host student-run cooperatives and some junior colleges have started Young Enterprise Clubs. The National University of Singapore has set up the NUS Enterprise, which co-ordinates the various entrepreneurship programmes on campus. Similarly, the Nanyang Technological University has its Nanyang Technopreneurship Centre. These programmes are encouraging and Singapore is making good headway on the road to becoming more entrepreneurial, said Mr Goh. 'The number of new establishments in Singapore in high-tech industries has been rising. Between 1996 and 1998, we registered 180 such enterprises a month. Last year, the number rose to 290.'The Ministry of Trade & Industry has also compiled a long list of successful Singapore enterprises, including BreadTalk, Accord Express and Kingsmen International, he added. Mr Goh said the government would also encourage greater self-reliance among Singaporeans by letting them do more for themselves, and not jump in too quickly to help. He noted that the attitude towards public assistance is changing. Before, the poor and jobless did not want to be referred to social welfare. But now, even able-bodied young men ask for monetary help.' We must reverse this changing attitude towards public assistance. Singaporeans have to pick themselves up when they fall, and not expect the government to come to their aid,' he said.' Making Singaporeans more self-reliant is also an essential step in our efforts to promote entrepreneurship. If we have too many safety nets, people will have no incentive to go forth and achieve great things by themselves.' (by Eugene Low)

From http://business-times.asia1.com.sg/ 08/19/2002

Govt to SMEs: You Won't Be Ignored Like Small Fish

They make up 90 per cent of commercial establishments here, with potential to create own brands and venture overseas THE Government has again made clear its commitment to small- and medium-sized enterprises (SMEs) and called for businesses to create and build their own brands so that they can venture overseas. SMEs account for about 90 per cent of commercial establishments in Singapore, employ more than half of the workforce and contribute 35 per cent to the country's gross domestic product, Dr Vivian Balakrishnan, Minister of State for National Development, said last night. 'So, I want to tell Dora, I want to tell all of you that you are not small fish that the Government can afford to ignore, not at all,' he said to applause from about 800 guests at the inaugural Singapore Promising Brand Award presentation ceremony. Dr Balakrishnan was referring to Association of Small and Medium Enterprises (Asme) president Dora Hoan's allusion to SMEs as 'small fish'. Congratulating the top 20 winners of the award, she said it was easier to follow an established international brand as most people see only the 'big fish', but pointed out that they all had started out as 'small fish'. She said local SMEs must develop their brands to position themselves for international waters. Yesterday, Chng Kee's and Kingsmen International bagged the awards for Most Distinctive Brand in the product and services categories respectively. Homegrown Sin Hwa Dee Foodstuff Industries' Chng Kee brand of Chinese and Asian sauces, mixes and condiments had made its mark as being authentically Asian, easy to use and convenient. Interior design and production group Kingsmen, which has designed the interiors of several retail outlets, including The Body Shop and Robinsons, has, to date, opened 15 offices in the Asia-Pacific. Bread boutique, BreadTalk, was voted the Most Popular Brand in a week-long readers' poll conducted by Lianhe Zaobao, which had co-organised the award with Asme. All three brands were chosen from among the top 20 winners, which included familiar names such as Bee Cheng Hiang, Crocodile, Cafe 21 and Kinderland. The 20 winners were selected from the more than 200 nominations received. The two Most Distinctive Brands were judged on the criteria of brand iden- tity, brand communications and potential for growth. Yesterday, Dr Balakrishnan also urged SMEs to look beyond providing quality products as Singapore's SMEs had reached a stage where 'quality can be taken as a given'. They needed to move up the value chain to create their own brands and market them overseas.He named Lianhe Zaobao, which now gets 1.5 million page views daily on its Internet site, as one such brand, because the newspaper has a reputation for accurate and fair reporting. (By Rebecca Lee )

From http://straitstimes.asia1.com.sg/ 08/26/2002

Thailand: New Transmission Line to Spark Southern Economic Development

HCM CITY - Work began yesterday on a 500 kV transmission line that will carry power to HCM City and the southern provinces. The VND1,506 billion (US$100 million) Electricity Corporation of Viet Nam (EVN) project, which will link the Phu My power plant, in Ba Ria-Vung Tau Province, with HCM City, is expected to be completed by the end of next year. It will run across Ba Ria-Vung Tau and Dong Nai provinces and HCM City. The project, besides the transmission line, will include the construction of Nha Be and Phu My sub-stations, and the expansion of Phu Lam Sub-station. "The 500kV transmission line is very important and construction must be completed quickly. The line will connect the Phu My No. 3, Phu My No.2. and Phu My No. 4 plants with the national grid," said general director of EVN, Dao Van Hung. Their combined output will be 1,900 MW while the Phu My Complex is totally expected to generate 3,875 MW by mid-2004.The project will be financed by official development assistance loans from the Japan Bank for International Co-operation (JBIC) and EVN's own resources." The 500 kV line will not only pave the way for the socio-economic development of HCM City but also the rest of the country. It will also help attract foreign investment to the region," said Hiroshi Suzuki, chief representative of JBIC in Viet Nam." I hope the contracts for supply of materials and sub-stations will be completed soon, and construction work carried out smoothly, so that the 500kV line will be in operation by mid-2004."EVN general director Hung added that demand for power has been increasing sharply and EVN aims to construct more than 4,000km of 500 kV transmission lines soon. - VNS

From http://vietnamnews.vnagency.com.vn/ 08/17/2002

Water Transport Schemes Get A New Look

The Transport and Communications Ministry is keen on developing water transport, which it says is cheap, effective and environmentally friendly.Deputy Minister Pracha Maleenond supports the move, as does the Federation of Thai Industries, because exports of Thai farm products depend on it.Harbour Department director-general Wanchai Sarathoonthat said his agency was planning to improve Chao Phraya river for tourism until the economic crisis forced a delay. A dam would be built in Nakhon Sawan under the plan, to keep water levels at three metres. The department had studied the project five years ago and would spend five million baht next year updating the study.Operators asked the state to provide areas for barges to anchor, navigational floats and safety measures.The Tourism Authority of Thailand suggested piers and ports be renovated and kept clean to attract tourists and tour operators. The Transport and Communications Ministry is keen on developing water transport, which it says is cheap, effective and environmentally friendly. Deputy Minister Pracha Maleenond supports the move, as does the Federation of Thai Industries, because exports of Thai farm products depend on it.Harbour Department director-general Wanchai Sarathoonthat said his agency was planning to improve Chao Phraya river for tourism until the economic crisis forced a delay.A dam would be built in Nakhon Sawan under the plan, to keep water levels at three metres. The department had studied the project five years ago and would spend five million baht next year updating the study.Operators asked the state to provide areas for barges to anchor, navigational floats and safety measures.The Tourism Authority of Thailand suggested piers and ports be renovated and kept clean to attract tourists and tour operators.

From http://www.bangkokpost.com/ 08/29/2002

Viet Nam: E-Government Progress Wins World Bank Support

(VNS)- An electronic governance project, set for completion by 2005, has been progressing rapidly, coming in for praise from World Bank officials following the completion of its first phase. Approved last year through Decision No 112, the Computerisation to State Administrative Management project (SAMCom),which hopes to apply Information Technology (IT) to completely transform Government administration, concluded the first of three stages on time recently. It prompted World Bank officials to extol Vietnamese officials, saying it would have taken any other country two years, Luong Cao Son, secretary of Decision 112's managing board told Viet Nam News. The first phase - scheduled for 2001-02 -involved laying down the foundation, organisations, regulations and standards. The second stage, between tune 2002 and June 2003, will see employment plans and a reserve source set up. The third and final phase - 2003 to 2005 -will see actual execution of the plans. The Government will provide VND2,875 billion (US$190 million) to 54 ministries and 61 provinces for the top priority scheme to take Viet Nam up to regional and global levels of informatic administration, a senior project official said. The project official said he hoped that the SAMCom project will change the way administrative offices work; while many offices are equipped with computers, they are not used to optimum levels. IT is also envisaged to play a key role in the ongoing administrative renovation, the project official said. He added that the project would help improve the image of the Vietnamese administration which has been being accused of being backward and caught up in red-tape. The basic goal of the project is to heighten the managerial efficiency of the government. Once government administration has become modern and professional, it will meet the demands of business people and common citizens. To attain the target, the project will be executed at central and local levels. Some of its key tasks include streamlining the organisation mechanisms of government; constructing a new legal framework; setting up an information infrastructure; teaching IT skills to State staff; and encouraging all to actively participate in the project. Viet Nam now has a low level of Internet use - only 1 per cent of the population uses it - and lacks many IT applications despite government efforts to increase both. The project aims to increase the number of staff with basic IT skills to 250,000, by 2005. To manage the work in all 61 provinces and 54 ministries, one central managing board for the Government's 112 decision has been set up. Talking about the project, the board secretary Son said, "applying IT to administration means pertinent laws have to change. If preparation is not made carefully, the project cannot be implemented." Meanwhile, the Government is also concerned about raising capital for this important project; considering it a privileged scheme, it his called for investment from all sectors.

From http://www.vneconomy.com.vn/ 08/01/2002

Banks to Syndicate Loans to Petrovietnam

(SGT)- Three commercial State owned banks have agreed to provide the Vietnam Oil and Gas Corporation, or PetroVietnam, with a loan worth US$270 million to finance a power and fertilizer complex in the southernmost province of Ca Mau. The deal would be signed as soon as the parties reach an agreement on interest rate, said an official from the banks. The creditors comprise the Bank for Foreign Trade of Vietnam (Vietcombank), which acts as the lead manager, the Industrial and Commercial Bank of Vietnam and the Bank for Agriculture and Rural Development of Vietnam. "We have not determined the proportion that each bank will lend to PetroVietnam, but it is certain that Vietcombank will contribute the biggest part. At present, PetroVietnam is considering the interest rate of the loan we have offered," a Vietcombank official told the Daily. The offered rate is calculated by adding an annual 1.7% to the Singapore Interbank Offered Rate, and the syndicated loan will have a term of ten to twelve years, he said. Parties will discuss the grace period, methods of disbursement, interest and refundment, the source said. PetroVietnam will use this sum to pay for imported equipment, he said. The capital required for the first phase of the mammoth project, which is to be completed in 2005, is estimated at US$L1 billion.

From http://www.vneconomy.com.vn/ 08/02/2002


WTO Accession Signals SOS For VN's SMEs

(SGT)- Vietnam's small and medium enterprises (SMEs) will face big challenges as the country hastens its pace on the path to WTO accession, a think tanker told a seminar in Hanoi yesterday. The most striking problem would be tough competition on the home market, while few local SMEs would be able to fight rivals outside the country's borderlines, Vice Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said. Loc, addressing the "WTO and SMEs Development in Vietnam" seminar in the capital city, warned that local players would be cornered by big rivals whose low priced quality goods would flood the Vietnamese market. The seminar was jointly organized by the VCCI and the German-based SMEs supporting federation ZDH. "Trade commitments under the World Trade Organization do not guarantee special treatment for SMEs, so small enterprises would face the harsh competition from bigger ones on local and overseas markets," said the VCCI official. According to Loc, the small fish will be devoured in the vast sea, as under WTO rules, all technical barriers regarding to import and export will be removed. Furthermore, import tariffs will also be reduced to very low levels, and coupled with possible undercutting or dumping tactics by bigger companies, local SMEs will see their goods unsalable. Loc cited findings of a VCCI survey last year to say that only 10% of Vietnam's SMEs are capable to penetrate overseas markets. Trade-related investment commitments under the WTO framework do not encourage foreign investors to localize their production, but entice imports of components. Therefore, Loc said, the danger of Vietnamese SMEs losing their positions as subcontractors in industrial sectors is looming large. The VCCI vice chairman noted that Vietnam's SMEs were still young, and most of them had been established for less than ten years. He called for local SMEs to take a more active stance in improving their performance and competitiveness by investing in new technology, marketing and the human resource. Another urgent task for SMEs is how to cut cost, diversify products, and seek new market havens. He also proposed the State create a business environment favorable for SMEs to develop stronger. Preferential policies need to be issued to help SMEs restructure their production and devise their development strategies. Vietnam has set a target of entering the WTO by 2004 or early 2005. Deputy Trade Minister Luong Van Tu told the seminar that accession talks were favorable for Vietnam, as all members of the international trading watchdog have voiced their support for Vietnam to enter the world trading body.

From http://www.vneconomy.com.vn/ 08/08/2002

Economic Restructuring Important to Secure Competitiveness

"The government will focus concerted efforts on restructuring production with a view to raising the economy's effectiveness and securing Vietnamese products a stable and firm place in the increasingly competitive world market." So said newly-appointed Deputy Prime Minister Vu Khoan, after being ratified by the on-going 11th National Assembly, in an interview to the media during a break in the session.To execute the government programme on economic renewal towards higher competitiveness, the deputy prime minister emphasised the importance of economic information and urged businesses to actively keep abreast of market information, including that of quality, design and price. "Only by doing so, can businesses accurately know the market demands and renew their production structure in a timely manner," he stressed." The government can create a legal environment but cannot do the work of private businesses. Therefore, business participation is of prime importance," he added. Mr Khoan drew the attention of businesses to the fact that the price of many Vietnamese products is still too high. "We have to pay attention to every detail in order to lower our production costs and become competitive," he pointed out. About the state of small scale production in Vietnam, Mr Khoan advised businesses to form alliances and take their work to a higher level in order to surpass primary barriers and to make an entry into larger markets. Vietnamese businesses, especially textile and garment enterprises, have had to refuse orders on a few occasions that were bigger than their production capacity, he admitted. Assessing the strategy to accelerate exports and substitute a number of imports with high-quality home-made products as successful, the deputy prime minister stressed that Vietnam's export turnover accounted for over 50% of its gross domestic product. However, he drew businesses' attention to the potential domestic market and noted with satisfaction that domestic consumption has been on the rise. "The policy to stimulate domestic demand has proven to be a success," Mr Khoan said, stressing: "To find and flexibly keep a rational proportion between the domestic and foreign markets, as well as a rational proportion between foreign markets is of important significance in export operations". When asked how to increase the proportion of value-added products in the total number of expected goods, Mr Khoan maintained that it was a question of time. "While increasing the export volumes of crude oil, rice and coffee, we must also raise the export volume of seafood, footwear and garments. However, during this period of industrialisation, we must also accelerate the export of value-added products," the deputy prime minister said.

From http://www.nhandan.org.vn/ 08/12/2002

TOP°Ł

 
Bhutan Power Corporation Inaugurated

The largest public sector enterprise in the kingdom, Bhutan Power Corporation (BPC), was inaugurated by the trade and industry minister, Lyonpo Khandu Wangchuk, on August 14.To be staffed with more than 1,200 workers, the corporation will be responsible for the distribution and transmission of power throughout Bhutan. Speaking at the inauguration, Lyonpo Khandu Wangchuk said that the BPC was a result of His Majesty's policy to distribute power to as many dzongkhags as possible, export power to earn revenue and to properly utilise the country's natural resources. "Bhutan's hydropower has a potential of 30,000 megawatt of which only 1.42 percent has been tapped," he said. Hydropower alone, he added, can one day contribute 90 to 95 percent of Bhutan's revenue. The BPC's mandate is to ensure reliable electricity supply for all and at affordable cost by the year 2020 and stimulate economic growth for industrial development by providing uninterrupted transmission access for export of surplus power. "The BPC should also provide user friendly service and sustain power distribution system through cost reduction and efficient management," the minister said. The BPC's managing director, Sonam Tshering, told Kuensel that the former DOP had to do policy planning, implementation and regulatory functions all by itself. "By being an independent body, we can become customer service oriented and will also have accountability to them," he said. The BPC, however, will not take over rural electrification which will continue as a government project. The department of power was split into three agencies on July 1, 2002: the BPC, Bhutan electricity authority, and the department of energy. The policy and planning functions of the energy sector will be looked after by the department of energy while the Bhutan electricity authority will oversee the regulatory functions. With about 90 percent of the former DOP staff and distribution assets transferred to the new corporation, BPC has a vision of becoming the biggest and best public sector company not only in the country but also in the region. (by Ugyen Penjor)

From http://www.kuenselonline.com/ 08/09/2002

India: Govt Planning I-Cards for All Citizens

NEW DELHI: Identity cards for all citizens, a Rs 15,000-crore National Rail Vikas Yojana and a national commodities exchange were among the 15 key initiatives announced by the government on Thursday. The home ministry will prepare a plan to issue multi-purpose machine-readable identity cards to all citizens. A pilot project, which will be launched in October to cover select districts in eight states, will also facilitate the implementation of e-governance initiatives to be completed within a year. The Rail Vikas Yojana will over the next five years aim to remove all capacity bottlenecks in critical sections of the Railways, including a Rs 8,000-crore project to strengthen the Golden Quadrilateral to run more long-distance mail, express and freight trains at a higher speed, and a Rs 3,000-crore project to strengthen rail connectivity to ports and development of corridors to the hinterland. Rs 3,500 crore will be spent on constructing two bridges over the Ganga and one each over the Brahmaputra and the Kosi. The consumer affairs, food and public distribution ministry will set up a National Commodities Exchange to streamline commodity futures trading. All villages will be electrified by 2007 and 130 lakh new telephone lines, including 75 lakh mobile telephones, will be added in the coming year. A comprehensive social security scheme for the poor and the middle class and a food-based social security for the destitute will be launched. The communication and IT ministry will implement a programme to improve efficiency, transparency and accountability at the government-citizen interface, with the e-bill post and internet-based e-post service network to cover all districts in the coming year. Media Lab Asia, a collaboration between the IT department and the Massachusetts Institute of Technology, US, will be set up to address the digital divide in the country. The government also announced formulating a model municipal law to facilitate private sector participation in urban infrastructure projects, especially in water supply and sanitation. Simultaneously, a fund will be operationalised this year to promote urban sector reforms with special focus on making urban local bodies viable. National scholarships will be given to disabled persons to pursue higher technical education. The culture ministry will launch the National Mission for Manuscripts to preserve and unlock the scientific, intellectual, literary and spiritual knowledge in different Indian languages. The ministry of petroleum and other ministries concerned will take steps to universalise blending of ethanol from various feedstocks, including sugar factories, with petrol and diesel. Sale of gasohol will become mandatory in nine states and four Union territories from January 1, 2003.

From http://timesofindia.indiatimes.com/ 08/15/2002

Indian SMEs Head for Central Asia

NEW DELHI - The Confederation of Indian Industry (CII) is organizing two "Enterprise India" shows for showcasing the capabilities of the Indian SMEs in the Central Asian region. The first show will be held at Dushanbe in Tajikistan from August 19-22, and the second will take place at Bishkek in Kyrgyzstan August 26-28. The shows are being organized with active support from the Ministry of External Affairs, the Government of India and the Indian embassies at Dushanbe, Tajikistan, Bishkek and Kyrgyzstan. The Enterprise India show in Tajikstan will coincide with the 10th anniversary of the Indo-Tajik relations and will be inaugurated by Akil Akilov, the Prime Minister of Tajikistan. Enterprise India 2002 is the fifth in the series of such shows organized by the CII for adding quality content to the strategic partnership between India and the countries of Central Asia, including Tajikistan, Kyrgyzstan and Kazakhstan. The export-import policy of India for 2002-2007 focuses on traditional ties with the countries of the Confederation of Independent States and lays stress on expanding bilateral trade with them because of the high growth potential that exists in the region. Tajikistan, rich in mineral and agrarian resources, has taken a number of steps recently to facilitate foreign investment into the country, such as liberalization of various taxes and import-export regimes. A well-trained low cost manpower and an educated workforce are the other advantages that the CIS country offers. The Special Economic Zones (SEZs) in Bishkek, Kyrgyzstan are a major attraction for foreign investors. The SEZ have already attracted substantial investments from the US, Turkey, Iran, Russia and Germany. The Enterprise India Show will enable Indian SMEs to explore the possibilities for setting up joint ventures for manufacturing projects in the SEZ, where there is no profit tax, no VAT on raw materials and the majority of output is exported. Enterprise India 2002 at Dushanbe and Bishkek will be attended by a number of VIPs and other important dignitaries from the government as well as from industry in Tajikistan, Kyrgyzstan, Uzbekistan, Kazakhstan and Turkmenistan. The Enterprise India shows will represent sectors such as electrical and electronics, instrumentation, textiles, garments, toys, light engineering, auto components, food processing, pharmaceuticals and the hand tools, plastics and engineering sectors. Earlier in April this year, the CII organized a similar Enterprise India show in Almaty, Kazakhstan, coinciding with the Eurasia Economic Summit. The show was a success, with the Indian SME participants proving their resilience to the international markets and global competition by signing 11 Memorandum of Understandings (MoUs), appointing 35 marketing agents and generating 453 business enquiries worth US$28 million.

From http://www.atimes.com/ 08/17/2002

Sri Lanka: Country's Economy on the Uptrend

Despite the slow recovery of the country's economy, it is bound to be stronger in the second-half of the year with favourable conditions for commerce and industrial activity with corresponding improvements in the international economy, says the Central Bank. Meanwhile, the Ceylon Chamber of Commerce has forecast that the country would yield a growth rate of around 3.7 per cent as the year progresses. The Chamber in its annual report for 2001-2002 states that the successful maintenance of the ceasefire following the MoU signed between the Government and the LTTE reflects the projected growth, which may otherwise fall short of its target of 3.7 per cent. Reflecting on the growth-conducive potential, Chairman of the Chamber, Tilak de Soyza said that easing of the drought situation and the return to normalcy of power supply by the government had placed the country on a sound footing for economic development. "Moreover, the peace process projects bigger investments, a lower fiscal deficit, and an upward trend in the capital market," he said. According to Quarterly Economic Review of the Ceylon Camber of Commerce, tourist arrivals would reach around 350,000 by the end of the year. "Tourist arrivals are gradually increasing as the hotel occupancy rates have risen from 24.2 per cent in October 2001 to 38.9 per cent by the end of April 2002". "The free trade agreements with India, the on-going WTO negotiations and the reforms in the key sectors of the economy introduced by the government have paved the way for the private sector to develop their enterprises," said Tilak de Silva. Meanwhile, the Central Bank has purchased 108 million US dollars in nett terms from the market thus augmenting the country's international reserves. The bank has also reduced its overnight Repurchase and Reverse Repurchase rates by 100 basis points, from 11.50 per cent to 10.50 per cent and from 13.75 per cent to 12.75 per cent with a view to encouraging economic recovery and investment. Dr. Karunasena, Economic Research Director said that since the domestic foreign exchange and money markets have strengthened their stability, there will be an improvement in the country's macroeconomic fundamentals. "Also, the Inflation rate in Sri Lanka has shown a downward trend," said Dr. Karunasena, "According to Colombo District Consumer Price Index, (CDCPI), the 12-month moving average has decreased from 10.3 per cent in December 2001 to 9 per cent in June 2002. And it is expected to drop further during the course of the year." (by Chamikara Weerasinghe)

From http://www.sundayobserver.lk/ 08/11/2002

Three-Year Plan for the Maldives

MANILA, PHILIPPINES - The Asian Development Bank (ADB) has endorsed a Country Strategy and Program Update for the Maldives covering 2003-2005. ADB loan assistance, totaling nearly US$19 million for the three-year period, will prioritize improvements in living conditions and access to basic social infrastructure in the remote islands and improvements to the country's education system. As part of its goal of reducing poverty, ADB will help develop small and medium enterprises in the atolls to create employment opportunities. ADB will also provide grant assistance to build the capacity of public sector institutions to enable credible and prudent macroeconomic management. A downturn in the tourism sector following the events of 11 September underscored the economy's vulnerability to external shocks. ADB assistance will help reduce this vulnerability. The Maldives and ADB signed a poverty reduction partnership agreement in March 2002, which aims to reduce the incidence of poverty from 43 percent in 1998 to 25 percent by 2015. The Update builds upon the strategic framework laid out in the Country Strategy and Program (CSP) for the Maldives, which was adopted in February this year. The Update refines the assistance program in light of the latest economic, policy and poverty developments.

From http://www.adb.org/ 08/09/2002

Maldives Hopes to Become A Middle-Income Country by 2020: Zaki

MALE (HNS) - Maldives hopes to be counted among the top middle-income countries within the next twenty years, Planning and National Development Minister Ibrahim Hussain Zaki said. Despite the many constraints facing development efforts, Maldives has managed to record impressive growth in recent years, Zaki told a ministerial conference of least developed countries (LDCs) held in Benin. "Recent measures taken by the (Maldives) government to further strengthen macroeconomic fundamentals and the development of new financial and commercial institutions as well as continued privatization are expected to create the conditions for sustained growth over the future," Zaki said while addressing the conference held in Cotonou. "Achieving (Maldives' Vision 2020 goals) is our challenge°≠ In order to achieve our development goals, Maldives must overcome many challenges both internal and external to the country," he said. The scattered population over many small islands and geographical inaccessibility poses "serious difficulties" in providing social services at affordable costs, while environmental fragility places serious limitations on economic activity, Zaki elaborated, adding that regional disparities in income and investment opportunities constrain balanced development. To overcome such hurdles, a regional development project and population redistribution program are being carried out to consolidate development and population in economically viable numbers and locations. Such projects are undertaken with generous multilateral assistance, and Maldives hopes to continuously receive such assistance in order to prevent disruption to its development plans when it "graduates" from LDC status to a middle-income country, Zaki said.

From http://www.haveeru.com.mv/ 08/11/2002

Pakistan: ITCN Asia-2002 Begins Today

Information Technology Commerce Network (ITCN) Exhibition and Conference Asia 2002 begins at Karachi Expo Centre on Saturday. Governor Sindh Mohammedmian Soomro will kick off the exhibition with a ribbon cutting ceremony while Federal Minister for Science and Technology Dr Attaur-Rehman will inaugurate the conference at a local hotel. The three-day mega event, being held for the second consecutive year, is expected to attract hundreds of thousands of visitors including foreign delegates, and local and foreign entrepreneurs. The organisers expect that some 600 foreign delegates will attend the event. President General Pervez Musharraf will chair the gala dinner session, a part of the ITCN, at the Governor House on Monday which will be attended by senior government officials, visiting foreign delegates and other distinguished personalities. Some 150 local and foreign companies have set up over 350 stalls in the A, B and C halls at the Expo Centre. The organisers have dedicated the first day of the exhibition to exhibitors and visitors from trade and corporate sectors. General public and students would avail a chance to experience the biggest IT exhibition event of the country on the following two days. Entry of general visitors to the exhibition hall will be through tickets and during restricted timings. The tickets are available at several superstores of the city. The exhibition will be open to students and general visitors on August 11 from 2 pm to 8 pm and on August 12 from 9 am to 8 pm. The organisers have directed the visitors to bring their national identity cards along with the tickets. Parking space for visitors will be available at National Sports Training Centre, opposite National Cricket Stadium. There will be free shuttle service from National Sports Training Centre to the Expo Centre after every 10 minutes. The students and general public would enter the exhibition hall from Gate 2 of the Expo Centre, opposite the SSGC head office, while the VIPs and visitors belonging to the corporate sector will use Gate 1. Various sessions of the ITCN conference would be held at a local hotel, which would continue on Sunday. Federal ministers including Shaukat Aziz, Abdul Razzak Dawood and Dr Atta-ur-Rehman will chair the sessions. Governor State Bank of Pakistan, Dr Ishrat Hussain and Sindh Minister for Finance Dr Abdul Hafiz Sheikh would preside over two sessions. Foreign delegates will also address at the conference. Provincial Minister for Finance and Chairman Sindh IT Board, Dr Abdul Hafiz Sheikh said on Friday that the ITCN Asia-2002 would pave the way for development of the IT industry in the country. He was of the view that participation of foreign firms in the exhibition showed their confidence in Pakistan's investment environment. "We want to emerge as an IT-friendly as well as investment-friendly country," he told a press conference at a local hotel. Dr Khurshid Nizam, chief executive Jamal's Yellow Pages, and Wong Jeh Shyan, chief executive CommerceNet Singapore, were also present on the occasion. The minister hoped that the event would bring investment to the IT industry which had an immense potential within and outside the country. Dr Khurshid Nizam said that several memorandums of understanding worth $300 million between local and foreign participating firms were signed during the ITCN Asia-2001. He said the ITCN was perfect reflection of public-private sector cooperation, which would help in making Karachi a regional IT hub.

From http://www.paknews.com/ 08/10/2002

Pak Creating IT Boom in the World

Federal Minister for Science and Technology, Prof Dr Atta-ur-Rehman, on Saturday said that Pakistan had made a tremendous beginning in the information technology boom around the globe. "During the past one and a half years the country has done fairly well in the field of information technology," he told the inaugural session of a conference being held in connection with Information Technology Commerce Network (ITCN) Asia 2002 at a local hotel. Presiding over the inaugural session of the conference, he pointed out development of four areas including education, vital infrastructure, enabling the policies incentives for growth of country's economy, poverty alleviation and elimination of unemployment. He said that implied that the country was very committed to focusing on all these areas to the best of its ability and had executed several decades' work in only couple of years. He said that presently some 20,000 schools teachers were being trained across the country in a programme conducted jointly with Intel. "Of these up to 9,000 have already been trained and the rest would be trained by April next year," the minister informed. The minister showed optimism as he said that in order to strengthen the 30 public sector universities in the country sizeable grants were given and it would start bearing fruits in the next three to four years. He said that it had also been decided to set up a large number of new universities, and to set up new campuses across the country. "Such measures would lead to production of 70,000 to 80,000 high quality graduates in the country within the next four years or so and that this is going to make a tremendous difference," the minister claimed, adding that currently of about the 8,000 to 9,000 graduates, 80 per cent were of sub-standard quality. He pointed out that massive investment in the human resource development was taking place. The minister said that the country was relocating a satellite by the first week of December. Focusing on Internet programme in the country he said that than 60 public and private universities would be linked through high-speed fiber access. He also spoke in details about the spread of the Internet to cities, towns and villages, substantial reduction in bandwidth rates, and a programme towards the introduction of e-commerce and production of computers locally. He declared that the bandwidth rate would come down to US $3,800 per month for specialized service by the end of this month. The minister said that the country had a 100 per cent fiber backbone. Regarding newly approved E-commerce laws he said that the minister pointed out that the cabinet had approved these laws one month ago and the banks were developing their structures properly so that they could go online. This created a platform for e-commerce to take place in a major way, said the minister. He was of the view that the e-commerce provided a large number of opportunities. Atta expressed the desire that the country must be visible in this very field, as being in e-commerce would open Pakistan in a major way for external trade. Earlier, presenting keynote address, Sindh Minister for Finance and Chairman Sindh IT Board, Dr Abdul Hafeez Sheikh observed that the country was facing many challenges, including problems regarding its image among the international community. "Steps of the present government are forcing people to come and explore tremendous opportunities, available for business," the minister said. He said that the aims and objectives of conferences and exhibitions like ITCN helped people bring together, provided opportunities for private sector and made people realize that Pakistan was also a good place to make legitimate money. "Like other countries, we too have problems and that is in our public utilities especially in electricity and telecommunication sectors" he confessed adding that unavailability of computers to masses, problems in ISPs, besides illiteracy, were some major challenges country was facing. However, during last 2 years, allocation for education for Sindh province had been increased to 300 per cent, primary education had been declared compulsory and education to 10th grade too had been made free, he said. Furthermore, free textbooks were being provided to eradicate illiteracy. Sheikh further informed that business friendly policies were being adopted to enhance foreign investment. He invited foreign investors and multinationals to visit and explore the opportunities and prospects, which had emerged as a result of bringing revolutionary reforms. Delivering the welcome address, General Secretary Islamic Chamber of Commerce and Industry, Aqeel A Al-Jaseem opined that Pakistan's image in outside world had been badly shattered owing to problems it was facing for the last two decades. "But the condition is far better than is being painted by international media," he said. He invited foreigners to come and visit various areas of the country to assess the policies and opportunities provided by Pakistani establishment for business community. Jeh Shyan Wong, the Chief Executive Officer of Commerce Net Singapore, said that Pakistan could not be ignored as the business hub in the realms of information technology. He said that the pro-business policies pursued by the government in Pakistan during the past two years enabled the international community to look at Pakistan. Wong further stated that the Commerce Net would actively play its role of facilitator. Addressing the second session of the conference titled "Emerging Technologies" Federal Minister for Commerce and Trade, Abdul Razzak Dawood said that mushroom growth of information technology institutes in the country would help create awareness about computer world. He said that the government had taken several measures to promote software industry in the country. He informed that government was doing its best to provide maximum incentives to the private entrepreneurs to enter into IT related business. "Our liberal policies achieved results and today we are moving forward and making progress in the IT sector with the help of private enterprises." The Minister asked private entrepreneurs and participants in the IT business to focus on the basic requirement and needs of the emerging software market in the country and abroad. He said that the government has taken an integrated approach with the assistance of ministry of science & technology to computerize and link up all government departments and ministries on internet. Dawood said that already a number of government departments had set up their websites and anyone could get whatever information they wanted from the available data. Other speakers belonging to world's famous IT firms gave detailed presentations on the occasion. David Ong, Hewlett Packard Singapore informed about the new technologies being introduced by his firm. M H Syed Niaz, President Prim Vis USA also briefed the participants about the services of his company. Salma Abbassi of Lucent Technologies and Faisal Yousuf Zia, former president Federation of Pakistan Chamber of Commerce and Industry (FPCCI) also addressed on the occasion. Moreover, Security measures for the ITCN Asia 2002 exhibition, Karachi Airport and at important roads has been tightened after Fridays' terrorist incident at a Christian Missionary Hospital in Taxila. The unprecedented security measures have been employed due to the arrival of President Musharraf in the city and other foreign dignitaries for participating in the ITCN exhibition. Heavy contingents of law enforcing agents are lining along the Sharah-e-Faisal, all roads leading to the exhibition and on top of all-important buildings in the city. Large number of police officials has also been deployed at the minorities worship places, residential areas, missionary hospitals and schools. Security measures around foreign experts working on various projects have also been tightened and are advised by the local authorities not to move publicly without proper security. Meanwhile Governor Mian Mohammad Soomro opened the ITCN Asia 2002 exhibition on Saturday The Exhibition includes 330 stalls of various national and international companies. The companies that set up their stalls included Pakistan Software Export Board, PTCL, and CBR, IT Board SINDH, IT Board NWFP, IPB Estate Engineering Council, Pakistan Association of Software as well as other renowned companies. Large number of people including Federal Minister for science and technology Dr. Atta-ur-Rehman, Federal Minister for trade and commerce Abdul Razzak Dawood are attending the exhibition.

From http://www.paknews.com/ 08/11/2002

Pak Has Made Tremendous Progress in IT: Dr Atta

Federal Minister for Science and Technology Prof Dr Atta-ur-Rehman said on Saturday that Pakistan had made tremendous progress in the field of information technology.

From http://www.paknews.com/ 08/11/2002

Population Control Must to Save Resources for Future

Recent economic gains notwithstanding, Pakistan faces a crunch question of matching its resource utilisation with spiralling population. With seventh place in the world in terms of population, majority of country's 144 million people would be facing a serious dearth of resources, already shrinking due to growth rate higher than planned.

From http://www.paknews.com/ 08/26/2002

 

Uzbekistan: Seminars on Insurance Activity Being Held in Tashkent

The State Insurance Inspection of Uzbekistan together with Tashkent branch of the Russian Economic Academy named after G.Plekhanov have started a series of training courses on "Modern condition and prospects of development of insurance business in Uzbekistan".The lectures are taught by leading local insurance experts B.Ashrafhanov, M.Mirsadykov, B.Shamsutdinov and others.The students will analyse various kinds of insurance on concrete examples, typical mistakes arising during conclusion and implementing insurance contracts, learn modern techniques of calculation of insurance tariffs and estimation of risk insurance.

From http://www.uzreport.com/ 08/05/2002

Azerbaijan: Awestern Companies Prepared to Invest in Caspian Gas Fields

Undeterred by Turkey's political turmoil, Western oil companies are preparing to make a major investment in the Caspian gas fields of Azerbaijan. Speaking on 12 August in Baku, an official from Britain's BP oil company said an international consortium is likely to approve a $3.2 billion project in October to develop Azerbaijan's giant Shah Deniz gas field. The group plans to build a pipeline through Georgia to Turkey, running along the same route as the Baku-Tbilisi-Ceyhan oil line. David Woodward, president of BP Azerbaijan, said, "I think that all work is going according to schedule, and by 2005 we can start to export Azerbaijani gas to Turkey," the Interfax news agency reported. The export pipeline to the West, known as Baku-Tbilisi-Erzurum, would be the first for Caspian gas. Woodward's statement was more certain than his remarks quoted by the Reuters news agency in June, when he voiced concern about market estimates by the Turkish state pipeline company Botas. At the time, Woodward said, "We do have to look at how secure our contract is and have more talks with Botas before we move ahead with our $3.2 billion investment." While the oil companies now seem certain about the gas project, Turkey's political and economic situation is not. Early elections are set for November to settle a government crisis that began after Prime Minister Bulent Ecevit was hospitalized in May. The 77-year-old leader has since returned to work, but not in time to save his coalition government from collapse. Although the elections may raise hopes for a resolution, the timing means that the outcome will be unknown in October when the oil companies authorize their investment in Shah Deniz. The links between politics, economics, and energy have been proven all too painfully in the past. In February 2001, a dispute between Ecevit and President Ahmet Necdet Sezer caused Turkey's stock market and currency to plunge, prompting a 9.4 percent drop in gross national product last year and the deepest recession since World War II. Signs of recovery have been clouded by the political fallout, despite billions of dollars in International Monetary Fund loans. The gas plans could be caught in the same morass because Turkey's projections of gas demand were grossly inflated years before its economic troubles began. In a "Caspian Energy Update" this week, the Center for Strategic and International Studies in Washington said, "Turkey's energy rhetoric has long been racing ahead of reality." Analysts have been warning Botas since the mid-1990s that its gas-demand forecasts were too high. In late 1998, the company claimed that growing Turkey would need 19 billion cubic meters of gas. It used 14.5 billion, about 24 percent less. It now claims that Turkey will reach the 2000 forecast level this year, but it has already reduced its estimates three times since January. In the meantime, Turkey has agreed to buy enormous amounts of gas from countries including Russia, Iran, Azerbaijan, Algeria, Nigeria, and Turkmenistan. The question is where all of the gas will go. "Caspian Energy Update" wrote this week that, "barring a miraculous immediate economic recovery and upturn in consumption, Turkey has a very serious oversupply problem." The developers of Shah Deniz seem to be stepping right into the middle of the problem. In October, when they plan to approve the project, Russia's Gazprom and Italy's ENI oil company also plan to open their Blue Stream pipeline across the Black Sea, giving Turkey even more gas. Plans for underground storage may still be years away, and the idea of transit through Turkey to Europe may suffer due to other routes for Russian gas. But the argument for supplies from Azerbaijan is that they may be cheap enough to undercut the competition, while the ethnic links with Turkey make the pipeline a common goal. With estimated reserves of 1 trillion cubic meters of gas, Shah Deniz is unlikely to stay bottled up for long. The pipeline is also part of U.S. plans to create a Caspian energy corridor. It is unclear how much the Baku-Tbilisi-Erzurum pipeline may be driven by its companion line for oil. BP has said that savings are possible if the gas project is built alongside Baku-Tbilisi-Ceyhan, but it is unclear how much. Although the consortia for the two projects are separate and include different sponsors, five oil companies are members of both. In the 1990s, BP officials argued against U.S. plans to build major oil and gas pipelines from the Caspian side by side, saying that it had never been done anywhere in the world. But the company has since adopted the idea, and despite doubts about Turkey, it now seems convinced that it will work. (by Michael Lelyveld)

From http://www.eurasianet.org/ 08/17/2002

 

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Australia: Social Crisis Looms: Magistrate

Sharply rising rates of homelessness and mental illness among people accused of committing criminal offences are a looming crisis for the Victorian community and its courts, according to Deputy Chief Magistrate Jelena Popovic. Ms Popovic told The Age she believed homelessness now rivalled drug abuse as a problem for the criminal justice system. "I am concerned that we are not planning enough for the future and that the situation will reach a type of crisis before we act," she said. Speaking personally, not on behalf of the Magistrates Court, she said it appeared mental illness, personality disorders and drug-induced psychoses were becoming far more prevalent. Ms Popovic said she often grappled with the conundrum of whether society was abusing the criminal justice system by relying on it to contain social problems. "It is clearly for us, as a community, to be rethinking a lot of our approaches," she said. Ms Popovic said the public did not appreciate just how impoverished were the lives of many of the people appearing before the courts. It was now commonplace for people to steal cars or break into premises to find somewhere to sleep, and to steal food so they could eat, she said. And so common were homelessness, mental illness, drug dependencies and personality disorders among defendants that the "common or garden" crook was almost a thing of the past. Leading criminal lawyer Rob Starry echoed Ms Popovic's comments yesterday and warned of worse to come. "What absolutely sends me into a tailspin is the prediction that there's about to be a flood of cheap heroin on to the market," he said. "I just don't think we are prepared to handle it." Mr Starry said up to 10 per cent of the 1200 cases a year handled by his practices in Footscray, St Albans and central Melbourne involved the homeless or mentally ill. "It overwhelms me that society's response to these problems is so often to incarcerate the victims when they're really social-medical issues," he said. Ms Popovic said the Magistrates Court now offered the services of a disabilities officer and bail advocates to liaise with crisis accommodation and mental health services for defendants. It also offered the services of psychiatric nurses and a Koori liaison officer. But the demands on these services were enormous. Up to five Victorians appearing in court each week were suffering from a combination of homelessness, mental illness, drug dependency and personality disorders, Ms Popovic said. She made her remarks to draw attention to the publication by Melbourne's Mental Health Legal Centre of Australia's first self-help guide to the criminal justice system for the mentally ill. (by Fergus Shiel)

From http://www.theage.com.au/ 08/05/2002

Relief on Welfare Paybacks

THE Howard Government has been forced into an embarrassing backdown over its $11 billion family payments system, announcing it will introduce more flexible payback arrangements for up to 700,000 families hit with unexpected tax bills. Facing a concerted Labor campaign and growing pressure from its own backbench, the Government will introduce easier payback rules for welfare recipients caught out by the system requiring them to estimate income 12 months in advance. Families will be allowed to pay back their debts on a fortnightly basis, rather than having it stripped out by the tax office. "Sure, if there are ways in which the system after two years of operation can be made to work with greater flexibility, I am interested in looking at that," John Howard told parliament. But the Prime Minister defended the integrity of the family payments system. "We're not talking about taking money out of people's pockets, we are talking about the way in which an overpayment is repaid," he said. "It has always been understood that if you are overpaid then you pay it back." The backdown follows a two-year campaign by Labor over the new family payments system, introduced at the same time as the GST in July 2000. Labor claims that around 650,000 families have been placed under financial pressure because of the Government's flawed family payments system, which gives the tax office scope to recoup debts when income has been under-estimated. The Opposition's family and community services spokesman Wayne Swan welcomed the backdown, but said it was "too little, too late". He also said proposals, which could see some family payments made at the end of the year rather than on a fortnightly basis, could exacerbate problems for many families. "Family payments are there to assist parents with the costs of raising their kids on a fortnightly basis and monthly basis," he said. "Many families will be seriously disadvantaged if the only change (the Government) can make is to delay payment of the payments for a year." A defiant Family and Community Services Minister Amanda Vanstone rejected suggestions the Government had been forced into an embarrassing backdown. Instead, she referred to the proposed changes as "fine-tuning". (by Steve Lewis and Sophie Morris)

From http://www.theaustralian.news.com.au/ 08/28/2002

Kiribati Pushes for A United Islands Front Internationally

Kiribati will urge regional leaders attending the Pacific Islands Forum which opens in Suva today to ensure that the Pacific is united in the international arena. President Teburoro Tito told Radio Kiribati News in Suva that for the Pacific Islands to be well heard, they need to:* have a collective stand on issues that concern them;* and, most importantly, delegates from the Pacific Islands must find time to sit with their colleagues and select issues that need a collective stand. President Tito, who promoted the united stand to fellow leaders at the Forum in Tarawa two years ago, believes it has been working at recent international meetings. But he said he feels that more needs to be done. Pacific Islands delegates to recent international meetings and summits still have different views and opinions on some issues, he said. One example he gave is climate change. But he said as a region delegates should be able to agree on important issues so the Pacific Islands voice can be strong and effective. The Kiribati leader also expressed his appreciation at the full attendance of all leaders at the Suva meeting. He said this had been possible through the decision precisely selecting the middle of August as the Forum meetings date. The decision is a step forward as the Forum will no longer be swayed by countries that in the past asked to host meetings to coincide with their national events. He said for the Forum to remain an important decision making body in the region it is critical for it to have its own timetable of meetings. Its significance as a regional body seems to disappear when it is hosted alongside a particular national event of member countries, he said. (By Roz Terubea)

From http://www.pacificislands.cc/ 08/15/2002

New Zealand: Unemployment Drops to 14-Year Low

New Zealand's unemployment rate continues to inch downwards, falling to a seasonally adjusted 5.1 per cent, Statistics New Zealand said today. The quarterly Household Labour Force Survey showed the unemployment rate was at 5.1 per cent in the June quarter, slightly lower than the March rate, and just below market forecasts of a 5.2 per cent figure. That is the lowest unemployment rate since March 1988 when it stood at 4.8 per cent. Among OECD countries, New Zealand's unemployment levels have improved from 12th in the March quarter to tenth, equal with Britain. For the quarter, seasonally adjusted employment was up by 0.6 per cent, a rise of 11,000 workers. Annually, there was an increase of 3.1 per cent or 57,000 people in employment, meaning there are now 1.878 million people in work. This was down slightly on economists' expectations, who predicted a quarterly rise of 0.8 per cent and an annual employment growth rate of 3.2 per cent. The workforce participation rate fell slightly to 66.7 per cent from the previous period's revised 66.8 per cent. Full-time employment was the big winner, growing 1 per cent over the quarter, while part-time work fell by 1.2 per cent. Due to the influx of migrants, the working age population has grown by 51,200 or 1.8 per cent since June last year. But the number of people not in the labour force has also increased. Nearly a million people -- 988,000 -- considered themselves neither employed nor unemployed, up 10,000 (1 per cent). They include child carers, retirees, students and patients. SNZ said these numbers had been boosted by a rise in those in education. All ethnic group unemployment rates fell over the year, apart from Pacific Islanders. The unadjusted unemployment rates during the quarter stood at 11 per cent for Maori, 9.7 per cent for Pacific peoples, 8.5 for other ethnic groups and 3.7 per cent for European/Pakeha people.

From http://www.nzherald.co.nz/ 08/08/2002

Government Sets out Three-Year Plan

The Government today set out its programme for the next three years, with a strong emphasis on the need for sustainable economic growth to underpin social policy development. The Speech from the Throne, read by Governor-General Dame Silvia Cartwright at the State opening of Parliament, said the Government had set itself tough goals during its second term in office. "For decades our rate of economic growth per capita has been lower than that of many other countries. As a consequence, while our absolute standard of living has risen our relative standard has declined," Dame Silvia said. "Previous governments have swung between the extremes of hands-on and hands-off government. It is now clear that the appropriate role for government lies between these two extremes." There were no surprises in the speech and most of it dealt with previously announced initiatives. In the economic area, the Government promised "conservative and predictable" fiscal management, delivering budget surpluses. The new policy targets agreement with the Reserve Bank would express the need for sufficient flexibility to allow maximum economic growth. In terms of monetary policy, it would "more explicitly move New Zealand closer to the practice of the Reserve Bank of Australia". "My Government sees its most important task as building the conditions for increasing New Zealand's long-term sustainable rate of economic growth," Dame Silvia said. "The appropriate mix of policies can, over time, return New Zealand to the top half of the developed world." Achieving growth would need strong promotion of the "economic transformation" of human capital development, investment, innovation, export promotion and business and regional development. Education was one of the keys, and the Government would build on foundations laid during its first term. Among the main points of the three-year programme set out in the speech were: improved accessibility to tertiary education, further progress in improving staff: child ratios in early childhood education, and expanding numeracy and literacy programmes; doubling the number of apprenticeships, with the goal of having 250,000 people in industry training within five years; developing the capacity to recruit talented and skilled immigrants; passing legislation for major changes to land transport, including? provision for public-private partnerships to finance large projects; a commitment to maintaining long-term majority ownership and control of Air New Zealand; seeking increased capital for investment, with existing agencies brought together into a single investment promotion agency; increasing funding for basic research, and consortium funding in conjunction with the private sector; establishing new support mechanisms for exporters, including help in targeting overseas markets; passing a Marine Reserves Bill to reform acquaculture legislation, with the intention that by 2010, 10 per cent of the marine environment would be included in a network of protected areas; ratifying the Kyoto Protocol on greenhouse gas emissions; improving the efficiency of the health system, with increased funding for primary health care and increased investment in mental health services; implementing the crime reduction strategy, with emphasis on early intervention and youth offending; increasing the state housing stock; focusing on better support for families and children, giving priority to increasing the maximum number of subsidised childcare hours; Amending the Holidays Act to provide additional payment for work on statutory holidays and separating out rights to sick and special leave; reviewing the paid parental leave scheme "with a view to expanding it as resources permit". In the speech, the Government endorsed its previously-stated approach to genetic engineering and the lifting of the moratorium, a main point of difference between Labour and the Greens. "The existing legislation with respect to the moratorium on the commercial release of GM organisms will not be extended but a strict regulatory framework will be maintained," Dame Silvia said. The speech will be fully debated in Parliament during the rest of this week and probably most of next week.

From http://www.nzherald.co.nz/ 08/27/2002

Palau Hosts Second Meeting of 3 Micronesian Presidents

Micronesian Presidents are meeting in Palau to further the forum established last year for discussions on issues of mutual interest to the region. Palau President Tommy Remengesau is hosting President Leo Falcam (Federated States of Micronesia), and Kessai Note (Marshall Islands).Issues they are expected to discuss include:- the recent African, Caribbean, Pacific (ACP) Summit in Fiji;- the upcoming World Summit on Sustainable Development in South Africa;- climate change;- trade;- the International Whaling Commission and whale sanctuaries, and;- the planned water forum in Palau.

From http://www.pacificislands.cc/ 08/02/2002

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Nasdaq Calls It Quits on Asia

TOKYO (AP) -- Citing bad market conditions, the U.S.-based Nasdaq Stock Market called an end to expansion in Asia on Monday and said it will refocus on Europe. The announcement comes three days after the company decided to pull out of its Nasdaq Japan joint venture. John Hilley, chief executive of Nasdaq International, Inc., said Monday that Nasdaq was now planning no other ventures in the region. ``At this point, we are not considering any other options in Asia,'' Hilley said. ``If there is a culprit, that was due overwhelmingly to economic and market conditions. There is not a viable economic venture going forward.'' Tokyo Internet firm Softbank Corp. and Nasdaq each owned 43 percent in Nasdaq Japan, which was based in the western metropolis of Osaka. Nasdaq will now focus on its European operations, Hilley said. Key to that plan is a new electronic stock exchange in Germany that will compete with the country's dominant exchange, the Frankfurt-based Deutsche Boerse. The new exchange, called Nasdaq Deutschland, will begin trading in January, and the company said it planned for 3,000 stocks to be traded eventually. ``There will be our focus in terms of international strategy,'' Hilley said. The shift underlines how startup companies in Japan have failed to fire investor interest as Japan wallows in a decade-long economic slowdown. Nasdaq Japan managed to attract only 98 companies. Among them were Starbucks Coffee's Japan unit and Tokyo software vendor Digicube Co., but their performance was also disappointing. Hilley said restrictive Japanese trading rules crimped business by preventing Nasdaq Japan from more freely trading international shares. He also blamed the unwillingness of Japanese brokerages to adopt an upgraded computer system that would link Nasdaq's Japanese listings with the Nasdaq's U.S. and European markets in 2003. The system is already adopted in Europe. Hilley said Nasdaq would still have a presence in Asia by selling its U.S.-based and European-based shares there, and by soliciting Asian companies to list on its exchanges. Although Nasdaq has not disclosed figures for its Japan losses, its cumulative losses here are estimated at more than 5 billion yen ($43 million), following the tech bubble's burst before it fully blossomed in Japan. Earlier this month, Nasdaq said it was taking a $20 million charge on its losses from its Japan investment. The Osaka Securities Exchange will continue using the Nasdaq brand until the end of the year, but Hilley ruled out leasing the rights to the name beyond that. He said Nasdaq Japan would eventually be dissolved, but did not say when.

 

From http://www.nytimes.com/ 08/19/2002

 

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China: Nortel Delivers Information Back-Up System to Industrial And Commercial Bank of China

The Industrial and Commercial Bank of China, the country's largest commercial bank, has deployed a storage area networking and disaster recovery solution from Nortel Networks. The network leverages the power of dense wavelength division multiplexing (DWDM) optical technology to link ICBC's Beijing data consolidation centre with a backup facility at another location in the capital. The Beijing centre collects data from approximately 21 provinces across Northern China.

 

From Nortel Networks Press Release 08/15/2002

'Structured Finance Market' to Swell to 5 Trillion Yen: S&P

The active flotation of mortgage-backed securities and securities backed by loans to businesses is likely to expand the size of Japan's "structured finance market" to 5 trillion yen in 2002, a U.S. credit-rating agency has said. The securitization market is expected to receive ammunition especially from active issues of two types of sophisticated securities -- residential mortgage-backed securities and cash flow and synthetic collateralized debt obligation (CDO), Standard & Poor's Corp. said Monday. Growth in commercial mortgage-backed securities issuance is also expected to be strong, the agency said. Although issuance of securities backed by auto loans and sales credits associated with equipment leasing contracts continues to be steady, it has become hard to estimate the value of issues of the securities as private placements are becoming more common, it said. The size of the market of publicly floated securitization financial products in 2001 was estimated at 3.2 trillion yen, S&P said. Much of the securitization market growth this year has been led by the RMBS sector, where the total issue amount could reach 1 trillion yen by the year's end, it said. Since Government Housing Loan Corp. continued quarterly RMBS issues during the first half of 2002, it has helped to stimulate the market and "cultivated" potential investors in the investment tool, S&P said. Traditionally, limited numbers of investors sought to purchase RMBS due to their long maturity and uncertain repayment characteristics. Kenji Kondo, a director in the S&P Structured Finance group in Tokyo. "However, the continued RMBS issuance from GHLC provided a learning field for various investors and gave a certain level of comfort," he said. Securitization market growth will also stem from growing moves by banks to repackage loans to create "collateralized loan obligations" and synthetic CDOs. Since the government has been urging banks to remove bad loans from balance sheets, it was an "overall driving factor" behind the growth of the securitization market in 2001, S&P said, adding that the factor remains in place at present.

 

From http://www.japantimes.co.jp/ 08/14/2002

Japan: A Setback in Fiscal Reform

Earlier in his administration, Prime Minister Junichiro Koizumi projected an image of aggressive leadership as he called for "no pain, no gain" structural reform. His bold plans included streamlining the bloated government budget. With the economy still struggling to recover, however, he seems to have lost much of his enthusiasm for fiscal reform. The fiscal 2003 budget guidelines approved by the Cabinet on Wednesday reflect the "recovery-first" position of the ruling Liberal Democratic Party. Although the budget's final shape is subject to negotiation, it is unlikely that the 2003 budget will give a big push to structural reform and fiscal consolidation. First of all, the prime minister has made a symbolic retreat by effectively lifting the 30-trillion yen cap on annual bond issuance. This debt limit, designed to stop runaway budget growth, now exists only in name because the proposed tax cut of 1 trillion yen or more -- designed chiefly to boost business activity -- is to be financed through bond sales. Koizumi's structural reforms have suffered another setback under the pressure of a prolonged economic slump. His decision to dilute the plan to remove the blanket bank deposit guarantee next April -- a decision purportedly aimed at preventing runs on small banks -- also indicates that he is tilted toward economic recovery. Of course recovery remains an urgent priority. Koizumi may have made "bold and flexible compromises" in order to get the economy moving again, but the impression is that he is backing off from his initial reform plans. When he was running for LDP president, for instance, he repeated that a budget gap of over 30 trillion yen was "abnormal." And after taking office he put deficit reduction at the top of his reform agenda. The announcement of the budget guidelines signals the start of the annual budget-making process. Not surprisingly, Diet members and top bureaucrats are moving to get as large a slice of the budget pie as they can. But precisely for this reason the prime minister must exercise leadership from the broad perspective of fiscal reform. Unfortunately, such leadership is not in evidence. The Council on Economic and Fiscal Policy, the blue-ribbon panel he chairs, is falling short of expectations. The point to remember is that fiscal policy alone cannot save the structurally sick economy. For more than a decade since the bubble burst, the government has continued to stimulate demand through pump priming. But the economy has continued to stagnate. Mr. Koizumi's "no reform, no recovery" slogan is losing its appeal. He has been trumpeting another slogan, "no revenue, no tax cut" -- meaning in effect that a tax cut should be coupled with a matching spending cut. The de facto lifting of the bond cap indicates, however, that the government may be returning to the "borrow and spend" policy of the past. This should not happen. The prime minister is reportedly seeking to offset tax cuts by tax hikes over a number of years. This "revenue-neutral" approach is explained as a safeguard against fiscal laxity. Experience shows, however, that matching tax cuts by tax hikes over a given period is not always feasible given fluctuations in the economy. A future recession could easily postpone or cancel planned tax increases. The guidelines call for a 3-percent cut in public works spending; a 2-percent reduction in discretionary spending, including official development assistance; a 5-percent cut in government subsidies; and downward adjustments in public pension payments. It remains to be seen, however, whether the general expenditure (excluding debt servicing costs and revenue transfers to local governments) will be held to the same level as that for fiscal 2002, 47.5 trillion yen. The ballooning government debt is a clear and present danger, as pointed out by repeated warnings from international credit rating agencies. Yet, with the budget battle about to begin, politicians and bureaucrats alike seem concerned more about securing appropriations than defusing the crisis. Deflation, to be sure, is an albatross around the neck of the Japanese economy. Removing it, however, requires structural reform because the burden stems essentially from structural problems. Under the circumstances, conventional stimulus measures like tax cuts are not the best way of curing the chronically ailing economy. The Koizumi administration should reaffirm the basic tenet of its economic policy: promoting structural reform to achieve a sustainable recovery. We know that is no easy task. But, as the prime minister has been saying all along, the economy cannot get back on its feet unless its structural ills are addressed. That is why fiscal reform must be pushed.

 

From http://www.japantimes.co.jp/ 08/09/2002

Shakedown in Taiwan Banking

Potential Taiwanese brides commonly consult the wisdom of astrologers and other occultists for advice on their love lives, occasionally going so far as to base their marital decisions on such advice. It is therefore only slightly less common for a hopeful suitor likewise to visit the fortuneteller - not to receive omens, but rather to grease the ethereal wheels with hard cash and thus ensure that the spirits help persuade his beloved to make the right choice. A similar tale can be told about the numerologists of capitalism, who now foresee an imminent wave of mergers and acquisitions in Taiwan's severely overcrowded financial industry. With 53 commercial banks serving a population of 23 million, everyone agrees that the unhealthy level of over-competition and resulting stagnant growth in the sector requires action: namely, reducing the number of players. But like a successful marriage, financial sector consolidation is not going to happen without a lot of compromise, hard work and long-term commitment. While some M&A activity may take place in the short term, true consolidation of the sector will take years. Many obstacles stand in the way. Perhaps foremost is the fact that most "mergers" in recent years have come about at the orders of banking regulators more concerned with keeping decrepit institutions alive than with the health of the purchaser. "Although a trend towards consolidation has been gaining momentum over the past three years, this development has resulted mainly from large commercial banks acquiring small financial institutions at the request of the government, generally creating few synergies for the acquiring banks and sometimes weakening their risk profiles," says a report released in July by Taiwan Ratings Corp, the local subsidiary of Standard & Poors. This kind of regulatory meddling not only hurts the buyers by saddling them with problems of someone else's making, but also does nothing to solve the problems that resulted in the takeover of the institution. With no effective market exit mechanism for bankrupt institutions, their weaknesses remain within the nation's overall financial system and the institution continues to operate under the management of the larger bank. "Taiwan is still treating its problems by following the example of the Japanese," says Norman Yin, a banking professor and opposition lawmaker on the Finance Committee of the Taiwan Legislature. Yin has a simple solution: Take the pain. Close down the bankrupt institutions, send their employees home and bail out the small depositors. This might be a no-brainer in most countries, but in Taiwan the suggestion falls on deaf ears. Nevertheless, Taiwanese banks are not all in bad shape, and the few standouts are certainly looking for growth. Any M&A deals that occur will translate into big bucks for some market players, so it is not hard to see what is behind the nascent hype about consolidation. Indeed, considering the events of the past two weeks, it doesn't appear to be hype at all. After months of speculation, Fubon Financial Holdings agreed to purchase Taipei Bank for US$2.4 billion in stock on August 8. Assuming the expected government approval, it will be a plum deal for Fubon, widely seen as the most integrated of Taiwan's financial holding companies. The acquisition will give Fubon a much wider retail banking presence to expand its cross-selling of banking, insurance, and other financial service products. Taipei Bank's much-coveted contract to run the new national lottery, a Taiwanese obsession, was a lucrative bonus. Just a week after the Fubon-Taipei Bank deal was announced, Cathay Financial Holdings won the bidding to purchase United World Chinese Commercial Bank (UWCCB) for $3.5 billion in stock. Cathay, which is anchored by the largest life insurer in Taiwan, will be capitalized at a whopping $11 billion if regulators approve the acquisition. The deal will bolster Cathay's position as Taiwan's biggest financial services provider and rank the financial group among the top five heavyweights of Asia ex-Japan. These rapid-fire deals came as positive news, but should not be seen as a sign that a tsunami of bank M&As is about to come crashing down on Taiwan. First, the purchases surprised nobody. Five of the nation's 14 new financial holding companies - including Fubon and Cathay - raised a combined $2.1 billion by issuing European convertible bonds in recent months with the express purpose of using at least some of the funds for acquisitions. And Taipei Bank and UWCCB are quality institutions with owners that have been openly seeking buyers for months; the only question was which institutions would win the bidding. Now that the fattest cherries have been picked, the next step in consolidation will be far more complex, and not so easy to foresee. Understanding the Taiwanese banking system requires a quick history lesson, as the large number of banks and other financial institutions in Taiwan is not simply a natural result of the island's crushing population density. The fragmentation can be traced to the late 1980s and early 1990s when Taiwan liberalized its banking industry in line with other emerging Asian economies. Previously, all Taiwanese banks had been state-owned, but the reforms opened the market to an eager horde of private investors, and the number of commercial banks almost doubled by 1992. Convinced that powerful individuals would seek to gain control of these institutions for their own nefarious purposes, regulators originally put a cap on individual ownership of 5 percent (and on business group ownership of 15 percent) of a single bank. The well-intentioned policy was largely a failure, as Taiwan conglomerates simply flexed their cross-shareholding muscles to gain control of banks so that they could lend depositors' money to themselves, one source of the troubling levels of bad debt that currently plagues the nation's banking system. But the limitation on individual and group ownership, which has since been repealed, also has ramifications for consolidation today. Since share blocks of many banks are still in the hands of a diffuse base of investors, it is impossible to buy a controlling stake from a single owner. Therefore, even to acquire a smallish "new" bank, an interested buyer must make a tender offer, an approach that has not been a raving success since the rules of implementation came into place in 2001 (Number of attempts: one. Number of failures: one). Another obstacle for consolidation through mergers and acquisitions lies in the fact that the financial reporting of many Taiwanese banks is simply not transparent enough for buyers to make a reasonably accurate valuation. Putting a price tag on Taiwanese banks is a dicey undertaking thanks to mismanagement, incompetence and longtime regulatory encouragement to hide their non-performing assets through loan restructurings (forced or otherwise) and myriad other machinations. "The MOF thought for many years that by hiding the problems, they would work themselves out," says Peter Kurz, chairman of Taipei-based research firm Insight Pacific. "Now, regulators realize that burying the problems only exacerbated them." In order for the market-driven consolidation to happen, banks will first have to generate clear and accurate financial statements. But in Taiwan, opaque accounting works to the personal and professional benefit of corrupt managers, and even honest bankers fear the legal and social consequences of airing their institutions' dirty laundry. Perhaps some regulatory strong-arming is called for, but understandably, this too will not happen overnight. Blame it on democracy. In Taiwan, achieving greater banking sector efficiency by creating a consolidation-friendly environment would incur a painful political cost. Taiwan's jobless rate is hovering over 5 percent, a figure once unthinkable in this East Asian Tiger economy, and the government will not want to be seen as adding to unemployment by encouraging M&As that result in layoffs. This concern is especially likely to slow consolidation among the state-controlled banks that still dominate the lion's share of the market. "Some people are going to have to change their careers," says Minister of Finance Lee Yung-san. "That's the pain you have to take." Brave-sounding and perhaps heartfelt words, but actions speak much louder: Just days before that interview, Lee's ministry caved in to union pressure and called off a three-way merger among two large state-owned banks and a government trust institution. None of this necessarily precludes the eventual consolidation of Taiwan's financial sector. Other quality institutions are out there, including SinoPac, Taishin, Chinatrust - even state-owned Huanan, which has aggressively written off its bad debt. These institutions lost out on the chance to buy Taipei Bank and UWCCB, but there are other fish in the sea, and as Peter Kurz points out, "All banks are in play." But deals will only happen if they make good business sense for the companies involved. Financial holding companies, none of which can boast of double-digit return on equity, show some enthusiasm for acquiring non-bank financial service providers. For example, Taiwan has no shortage of highly leveraged mid-sized securities companies that financial holding companies might buy in order to boost their ROE levels. Consolidation is indeed part of the next step in the restructuring of Taiwan's banking sector. But over the short term, shotgun weddings are likely to be sporadic, and bank acquisitions will be the exception rather than the rule. Realistically, the banking industry will remain a crowded house for at least a few more years. It is written in the stars. (by Matthew Smith)

 

From http://www.atimes.com/ 08/20/2002

Japan Bank Losses from Bad-Loan Cleanups Soar 59% In Fy01: Boj

TOKYO - Japan's 129 banks recorded 9.7 trillion yen (US$40billion) in losses from the disposal of nonperforming loanslast fiscal year, a 59 per cent increase from a year earlier,according to a survey released Wednesday by the Bank of Japan.In accordance with special inspections by the FinancialServices Agency, the banks built up reserves against bigborrowers. On a net basis, the banks booked a combined 4.9trillion yen loss.

 

From http://www.asiapulse.com/ 08/16/2002

Hana Bank Picked for SeoulBank Takeover

SEOUL: A top-level South Korean panel has picked Hana Bank over US fund Lone Star to take over nationalised SeoulBank in a US$900mil merger that would create the nation's third largest lender. Hana Bank was chosen over Texas-based Lone Star after the Korean lender guaranteed the government would get 1.1 trillion won (US$933mil) in Hana shares or cash out of the deal. "Overall conditions offered by Hana Bank were better than Lone Star's," Kang Keum-shik, chairman of the Public Fund Oversight Committee, told reporters yesterday. The sale, if completed, would be the nation's biggest bank privatisation since 1999, when the government sold a 51% stake in Korea First Bank to US fund Newbridge Capital. It would also advance a government drive to consolidate the banking sector and help win global confidence in South Korea's continued reforms since Asia's 1997-1998 financial crisis. "They are not over-paying," said Nomura Securities bank analyst Brian Hunsaker. "They are buying at a pretty small premium to book value," he added, putting the 1.1 trillion won offer at about 1.1 times book. For Hana, completing the acquisition would make it the No. 3 lender in South Korea with 82 trillion won in assets, after Kookmin Bank and state-run Woori Finance Holding Co. It currently ranks sixth.. But the deal may face obstacles. Immediately after the announcement, the union at Seoulbank said it was set to strike if the government approved a merger with Hana Bank. The sale comes after four years of failed negotiations with potential buyers, including HSBC and a unit of Deutsche Bank AG, after Seoulbank was nationalised in the midst of the Asian financial crisis. - Reuters

 

From http://biz.thestar.com.my/ 08/20/2002

FSA Plans to Offer Cash Incentives to Banks That Merge

The government may provide as much as 1 trillion yen to banks that agree to consolidate, according to a proposal outlined Thursday by the Financial Service Agency. The FSA will request 1 trillion yen in the fiscal 2003 budget to give to regional financial institutions that consolidate. In a report on proposals aimed at encouraging regional institutions to merge, the FSA also said it plans to raise the limit on its deposit guarantees for merged regional institutions for up to two years as an added incentive. The FSA officials said the new limits would be the number of banks involved in the merger times 10 million yen. Regarding the planned 1 trillion yen budget request, the agency will ask the government to set up an account with the state-backed Deposit Insurance Corp. to hold the funds. The government already has a 15 trillion yen account at the DIC to shore up financial institutions in case of emergencies. FSA officials said the money would be allocated to merged regional institutions that request funds to bolster their capital bases, which may be depleted if banks clear their losses before merging. The banks would issue new shares in return for the funds. The FSA said it will ask for a total of 16.6 billion yen, up from 13.52 billion yen in the fiscal 2002 budget, primarily to promote measures to ensure the stability of the financial system, such as accelerated disposal of nonperforming loans at banks. The FSA has been encouraging regional financial institutions to consolidate to improve profitability and strengthen management before the imposition on April 1 of a 10 million yen guarantee cap for most types of deposits. On April 1 this year, the government imposed a cap of 10 million yen per bank per depositor on time deposits. Encouraging consolidation among regional financial institutions is in line with the government's basic economic and fiscal policy adopted in June, which calls for promoting mergers of banks to ensure the stability of Japan's financial system. The agency also said it will request tax incentives for banks that are to consolidate, including reduced tax burdens to integrate their computer systems. Of the 16.6 billion yen request, the agency plans to set aside 10.78 billion yen to hire 225 new staff members to improve bank audits and launch inspections of governmental financial institutions. The FSA plans to start inspections in fiscal 2003 of governmental financial institutions, including the Government Housing Loan Corp. and the Japan Finance Corp. for Small Business. It also plans to conduct audits of a postal corporation to be established in the next fiscal year. Meanwhile, the FSA said it will request a number of tax-reform measures involving securities transactions in fiscal 2003 partly to encourage individuals to invest in stocks. Among the reforms, the agency wants to extend to 10 years the period in which the 20 percent tax on stock sales will be reduced to 10 percent if an investor has held the stocks for more than a year. Under the current schedule, the preferential tax will be applied over three years starting from the next fiscal year.

 

From http://www.japantimes.co.jp/ 08/30/2002

Korea: Central Bank Advised to Be More Prudent in Rate Policy

Even though inflationary pressure is expected to accelerate after the fourth quarter of the year, the Bank of Korea (BOK) should err on the side of a more prudent approach towards raising interest rates, a private think said yesterday. Samsung Economic Research Institute (SERI) said in a report that it is advisable to maintain the key borrowing cost, which is currently at 4.25 percent, until the present turbulence in the global financial markets eases somewhat. "Inflationary pressure will be strengthened after the fourth quarter of the year, but it is deemed to be desirable for the central bank to keep the rate at the current level," said the institute. According to the report, driven by resilient domestic consumption and the expected upturn of the economy, rising inflationary pressure will clearly be in sight next year. Also, a gross domestic product (GDP) gap, which refers to the percent deviation of actual GDP from potential GDP, will become positive during the third quarter of the year, and the gap will further expand next year, it said. The negative deviation means a deflation or slowing inflationary pressure in the economy, and positive deviation implies the opposite. In the meantime, the central bank also should take into consideration other economic data when implementing rate policy, it said, adding that the ongoing rate policy is in place largely with the aim of stabilizing prices. The BOK should carefully consider other economic data, including volatile asset prices and labor flexibility, in addition to core inflation, which excludes volatile prices of foods and energy and is the main inflation gauge for the central bank. "Should the central bank focus mainly on core inflation, the odds are high that a rate hike would be untimely," the institute warned, adding that a rise in prices of agricultural products, housing and service fees has accounted for a large part of the overall increase in consumer prices since 2001.

 

From http://www.koreaherald.co.kr/ 08/09/2002

KIF Calls for Creation of `Asian IMF'

The Korea Institute of Finance (KIF) yesterday called for the establishment of a permanent Asian lending institution in a bid to prevent recurrence of a regional financial crisis. During a seminar held at the Bankers' Club in central Seoul, the KIF stressed the need to set up an Asian version of the International Monetary Fund (IMF). Two KIF researchers _ Dr. Choi Gong-pil and Dr. Jang Won-chang _ said that Asian countries will have to push for the creation of an Asian Financial Institution (AFI) as part of their efforts to stabilize the regional financial system. Some Asian officials and economists had previously floated the idea of establishing an Asian rendition of the international lending institution in a bid to head off financial turmoil following the 1997-98 Asian crisis. But the proposal could not be translated into action in the face of strong objection from several rich countries. Instead, members of the Association of Southeast Asian Nations (ASEAN) as well as China, Japan and South Korea agreed on the Chiang Mai Initiative during their finance ministers' meeting in Thailand in May 2000. Under the initiative, Asian countries have signed bilateral currency-swap deals promising to lend hard currencies to signatories based on pledged collateral of local currencies in case of a financial crisis. Jang, of the KIF, pointed out that the initiative is not enough for Asian countries to be able to control the contagion effect of financial turbulence similar to the 1997-98 crisis. He said the nonintervention policy pursued by the signatories of the initiative would undermine efforts to strengthen regional cooperation in staving off potential financial turmoil. He said it would be hard for Asian countries to properly deal with crises without creating a permanent institution, as each nation has different level of development as well different market structures and regulations. Jang stressed that the proposed Asian Financial Institution would have to play the role of ``lender of last resort,'' designed to provide liquidity to crisis-prone countries and give advice on the development of financial markets. He also said the envisaged AFI would be given power to set and enforce region-wide prudential regulations in order to ensure the sound operation of financial systems across Asia. (by Park Yoon-bae)

 

From http://search.hankooki.com/ 08/14/2002

Rough Start for Regulator in Japan

TOKYO - It has been an inauspicious beginning for Shokichi Takagi, the new commissioner of the Financial Services Agency. In the six weeks since he was promoted to the post at Japan's chief financial regulator, stock prices have tumbled to near 18-year lows, nonperforming loans have hit record highs and Prime Minister Junichiro Koizumi has backed down on a crucial part of a banking reform effort.As concerns about the financial industry grow, how Mr. Takagi navigates this perilous path will have a profound effect on Japan. As the agency's top bureaucrat, he is the official most intimately involved in Japan's handling of its banks and financial markets. While his boss, Hakuo Yanagisawa, the financial services minister, is a politician and rarely works on daily details, Mr. Takagi has spent most of his career at the Finance Ministry where, out of the limelight, he helped shape some of Japan's most significant financial policies.His appointment, on July 12, at first raised hopes that regulators might finally overhaul the struggling banking industry. Mr. Takagi's predecessor, Shoji Mori, was an old-time bureaucrat widely viewed as a roadblock to change. With interest rates at zero and the nation's budget squeezed tight by a heavy debt load, Mr. Mori was reluctant to use taxpayer money to recapitalize the banks, something experts say is needed to promote reform. The younger, more cosmopolitan Mr. Takagi was seen as more willing to inject new thinking into a policy debate that is seen as reactive and uncreative.But insiders and experts now say that Mr. Takagi, 54, is unlikely to come up with quick answers to these huge problems."It doesn't seem that there is going to be a major change in direction and speed," said a disappointed James Fiorillo, an analyst at ING Barings Securities in Tokyo who had initially expressed considerable enthusiasm about the appointment.Mr. Takagi, a mild-mannered Harry Potter look-alike, is deeply ensconced in the bureaucracy that helped create many of the financial problems now plaguing Japan. His track record, built over three decades at the powerful Finance Ministry, includes a preference for avoiding market-driven reforms and for preserving the "convoy system," which regulators use to cajole the banks to act as a group.This long-held government strategy has sheltered the industry's weakest players and stunted reform of the financial industry. Still, the preservation of the status quo remains a common feature of Japan's hidebound bureaucrats, who are generally more powerful than politicians because they write most laws.In a recent interview in his spotless office, which features a large screen showing the latest market moves, Mr. Takagi insisted that "the principle of competition is ingrained in me" and that "the "convoy system' is the furthest from my mind."But analysts say that political pressure and institutional habit will ultimately force him to patch together short-term solutions to reassure jittery investors rather than solve the more complex problems plaguing the banks."He is very retrograde in his efforts to buy time," one banker in frequent contact with regulators said. "The whole approach is a throwback to a prior era."Mr. Takagi was indoctrinated into this muddle-through style of governing at Tokyo University, where many of the country's top administrators are groomed. After stints at a Harvard University research institute and the World Bank, he moved swiftly up the ladder at the Finance Ministry before moving over to the Financial Services Agency two years ago.At the ministry, he won several important posts in the securities division, impressing colleagues with his deep knowledge of financial markets despite having no formal economics training. "Takagi-san is a unique bureaucrat who has a firm grasp of how financial markets are increasingly interrelated," said one former co-worker, who added that Mr. Takagi earned a reputation as an iconoclast because he rarely smokes or drinks and favors long walks.Mr. Takagi made a name for himself as a anti-market administrator in 1992, when Japan's markets were reeling from the collapse of the asset-inflated bubble of the 1980's. As a manager in charge of the Finance Ministry's stock market division, Mr. Takagi helped change rules to allow the postal savings fund and national pension plan - both of which are run out of the Finance Ministry - to invest in billions of dollars worth of equities. These so-called price-keeping operations halted the declines, though they raised questions about Japan's commitment to free competition.In February, Mr. Takagi again showed he was willing to finesse markets when his agency clamped down on short selling, or trades that bet that the market or a stock will decline. In the run-up to the introduction of the new rules, some of which are used in the United States, many of the country's largest brokers were hit with stiff penalties. The timing of these actions prompted many investors to accuse the government of trying to scare off short sellers to bolster the market.Several Japanese news reports suggest that at the time Mr. Takagi pushed for even harsher measures, including banning some margin trading, or borrowing money to trade stocks. Mr. Takagi and other hard-liners, the reports said, felt that speculators were using this financing to help push prices down.Mr. Takagi denied the accusations, using a bureaucratic double-speak that, while literally true, ignores a larger design. "We are not taking any measures directly affecting the market," he said. "We need to take measures for basic structural reform, but we won't do anything to jack up the market."Mr. Takagi also left his footprint on the banking industry when he moved to the Financial Services Agency, the country's financial industry watchdog. As director general of the Supervisory Bureau, he oversaw inspections last year that resulted in the banks' reclassifying nearly $66 billion in loans as troubled. The starker accounting helped push the total of nonperforming loans 22 percent higher, to a record $437 billion, at the end of March.Investors welcomed this more accurate appraisal, but still fret about the government's unwillingness to use taxpayer money to help the banks write off the bulk of their debts. In July, Mr. Takagi said he favored giving government funds to small banks to help them merge. But critics say this step will not force the largest banks to write off their bad loans, the ultimate solution to the banking crisis. Instead, they say, using public money to encourage mergers is really a ruse by the Finance Ministry to micromanage the banking industry, as they have for decades. (by Ken Belson)

 

From http://www.nytimes.com/ 08/23/2002

TOP°Ł

Budget Woes Affect Unions

A looming state budget crisis and possible double-digit increases in health-insurance costs next year have area leaders nervous as union contract negotiations proceed. County officials are reserving what financial room they have left under state tax levy limits to cover an increase in health-insurance costs. The county's health-insurance costs rose by 5 percent in the first six months of 2002, but prescription drug costs went up by more than 15 percent in that time, said Clarence Hintz, county board chairman. "Some counties went up by 15 percent or more across the board, and we've had years where it went up that much," he said. "So far this year, we've been real lucky. "But the expected costs mean that county leaders will have little leeway under levy limits to afford other services for taxpayers. Nancy Wild, housing services manager at the Portage County Housing Authority and a 20-year county employee, is worried that county officials might ask for significant concessions on the cost of health insurance. Her union, Local 348 of the American Federation of State, County and Municipal Employees, is expecting tough negotiations with the county. It would not be the first time the county has asked union workers to concede on health insurance. In the late 1980s, county union workers took lower pay to maintain health insurance for everyone, according to Colleen Ottum, president of the Portage County unit of the AFSCME, which represents five union locals - two for the county and three for the city of Stevens Point. "As unions and employees, we want to work with the city and county to get through this, but we're not willing to be walked on, either," Ottum said. "I am sure there are nonmonetary issues that we can settle on in lieu of higher wages. It just depends on negotiations. "Local 348's contract is one of two county union agreements that expires Dec. 31. The other covers licensed practical nurses at the county's Health Care Center. The two sides will exchange initial proposals early this fall, said Therese Freiberg, who is leaving as the county's personnel director to take a job with Milwaukee Public Schools. Portage County and unions that represent workers for the Parks and Highway departments may be headed for arbitration on a labor agreement for 2002. "The mediator is investigating whether we are at impasse, and if he finds that, he would order the Wisconsin Employment Relations Commission to schedule an interest arbitration hearing," she said. The arbitrator would listen to each side's final offer and pick one. If arbitration is ordered, the two sides are required by law to extend the contract for a second year to give some breathing room. The sides also could agree to extend the contracts for a third year, through 2004, Freiberg said.Lisa Jakusz, personnel specialist for the city of Stevens Point, will begin negotiations with all six of the city's unions on new contracts this fall. Having all the contracts expire at the same time might sound dicey, but there is a benefit, she said. "If you have four contracts settled at the same time with roughly the same parameters, that puts pressure on the other two to settle," she said.The city has been successful in the past in making deals with the unions that benefit everyone, Jakusz said. Last year, city workers got 3.4 percent raises for 2001 and 2002 across the board. That was more than city officials wanted to give, but they were able to get the six unions to agree to change health plans in exchange for higher wages. "We offered a little more on wages because we went to a preferred provider organization to save money on claims dollars on health insurance," Jakusz said. "Most people haven't noticed much of a difference. "Without such an option available this time, however, Jakusz is uncertain how the negotiations will shape up. "I've never seen health insurance rates go down," she said. "The best we can hope for is a small increase. It's going to be an area of concern for some time. "The state government's potential budget deficit of $2 billion to $2.8 billion in the next two years also makes it tough to predict how much money the city will have to work with. If state aid, such as shared revenue, gets a big cut, the city could have problems coming up with dollars to satisfy union workers' demands, Jakusz said. "We don't know where we're going to be six months or a year from now," she said. "I hope some of these bargaining units are aware by seeing the newspapers and television reports of what's going on. With the economic times being what they are, we hope the unions will realize this is something that we are all in together." (by Paul Chronis)

 

From http://www.wisinfo.com/ 08/14/2002

Indonesia to Revamp Financial Sector by Closing Insurance Firms

JAKARTA - The government said it will make a greater effort to revitalize the financial sector by shutting down ailing companies in the insurance sector, especially life insurance companies. Financial Institution Director General Darmin Nasution said the government will close a number of life insurance companies which have failed to meet conditions which would have allowed them to continue operation. He said the move was taken ahead of the establishment of a new Financial Service Authority [OJK] which will take over some of the functions of the central bank, including supervision of the operation of financial companies.

 

From http://www.asiapulse.com/ 08/12/2002

Govt Announces Subsidy Cuts, Higher Taxes for 2003 Budget

President Megawati Soekarnoputri unveiled on Friday the 2003 state budget draft, which highlights a sharp cut in subsidies and a hike in tax revenue, meaning further belt tightening for many Indonesians still suffering from the late 1990s economic crisis."In a bid to reduce the deficit next year, the government plans to cut fuel, electricity and food subsidies," Megawati said during the delivery of the draft before a plenary session of the House of Representatives. The government proposes a 39 percent cut in subsidies to Rp 25.3 trillion (US$2.91 billion) for next year, compared to Rp 41.6 trillion allocated for the 2002 state budget. The lower subsidies translate into higher fuel prices and electricity rates. Megawati said the government would have to raise electricity rates by an average of 6 percent every quarter next year. The cut in expensive subsidies is crucial to help bring down the state budget deficit to 1.3 percent of gross domestic product (GDP) from 2.5 percent estimated for 2002 in a policy aimed at achieving fiscal sustainability. "The main goal we wish to achieve is more fiscal sustainability, which serves as the foundation for economic and monetary stability as well as a return of confidence that would in turn boost the production sector and result in more jobs," Megawati said. Huge subsidies have put the government budget in the red. And since the economic crisis, which prompted the government to issue massive bonds worth about Rp 430 trillion to bail out ailing banks, the budget has sunk even deeper into the hole because it has to cover the interest rate of the bonds. For 2003, Megawati plans to set aside some Rp 80.9 trillion for interest debt payment, of which Rp 55.1 trillion is allocated for servicing the domestic debt. To help finance this huge public debt burden, Megawati also proposes an 18.7 percent hike in tax revenue to Rp 260.8 trillion. The government hopes that a higher economic growth of 5 percent next year will help achieve greater tax revenue. Nevertheless, in an apparent bid to win the hearts of Indonesians, Megawati offered some relief by pledging a 50 percent increase in teachers' allowances and a 10 percent rise in the salaries of civil servants, soldiers and policemen. The daily allowance for soldiers and policemen will also be increased. State expenditures for the 2003 state budget are estimated at Rp 354.1 trillion, compared to Rp 344 trillion in the current budget. However, because of the huge debt burden, only a little can be spared for spending on public works or other development programs to generate employment. Development spending is set at Rp 54.5 trillion or 2.8 percent of GDP. In comparison, spending for servicing the huge public debt next year is set at 4.1 percent of GDP. Megawati said belt-tightening measures through the cut in subsidies and hike in tax revenue should allow the government to balance its budget by 2004. To finance the state budget deficit, the government will continue to rely on foreign loans and proceeds from the privatization program and the sale of assets held by the Indonesian Bank Restructuring Agency (IBRA). Privatization and asset sales are expected to raise some Rp 16.9 trillion in cash. Elsewhere, Megawati was hopeful that the economy would grow at a faster rate of 5 percent next year, compared to an estimated 4 percent for this year, which is being helped by an improving global economic condition.

 

From http://www.thejakartapost.com/ 08/18/2002

IBRA Finds Itself in Another Mess for Its Loan Sales

The Indonesian Bank Restructuring Agency (IBRA) seems not to be fully aware yet that credibility and accountability should be its basic capital in executing its primary task, which is disposing of the billions of dollars of distressed assets under its management. Or is this agency, the most vital instrument for the economic crisis management, so fully controlled by corrupt officials that it is truly a den of thieves, as many have alleged? Almost all the major deals it has made since 2000 have been dogged by controversy, battered by allegations of collusion and corruption. This despite its supervision by an independent oversight committee, ombudsmen, an internal audit department and State Minister for State Enterprises Laksamana Sukardi, supposedly one of the Cabinet members with impeccable integrity. IBRA's auction of Rp 135.4 trillion (US$15 billion) of bad loans last month, billed as the mammoth asset sale of the year, ended in another controversy, causing uproar in the mass media and forcing the government to set up a special task force to investigate allegations of conflicts of interest and corruption. The auction process started in early June with steps to ensure a high standard of transparency. These steps included conducting an information campaign through investor forums and the IBRA website, and establishing clear-cut step-by-step procedures and legal safeguards to prohibit original debtors from taking part in the bidding. The massive asset sale was warmly welcomed, as it was expected to achieve three strategic objectives: releasing corporate debts from the IBRA "hospital" to new creditors, allowing banks to expand their loan portfolios and reducing the government's domestic debt and its spending on the interest on bonds. About 231 domestic and foreign investors submitted bids, resulting in Rp 81.6 trillion in bad loans being sold for Rp 23.1 trillion, or a recovery rate of 28.3 percent. This rate was not bad, compared to the 20 percent recovery rate achieved by the asset managers in South Korea and 27 percent in Thailand. But suddenly, boom! Allegations of collusion and corruption erupted, and rumors began to fly of several IBRA officials buying luxury cars. As it turned out, a shareholder and key executive of PT Anugra Cipta Investama, one of the biggest winning bidders, is Wicaksono Abadiman, a cousin of Mohammad Syahrial, deputy to the IBRA chairman in charge of asset management. Yet more damaging to the credibility and perceived fairness of the auction is the fact that Abadiman is a former president of state-owned PT Bahana Securities, which together with another state firm, Danareksa Sekuritas, had been a financial adviser to IBRA and was heavily involved in valuing distressed assets at IBRA, including a good portion of the bad loans entered into the auction. Why is this seemingly small matter so damaging to the credibility of the auction process? Because information is the key for investors to assess the business prospects of debtors, and to set their bid prices accordingly. It is quite obvious, therefore, that asymmetrical information is quite a big disadvantage. Anugra Cipta should not have been allowed to take part in the auction, not only because Abadiman is a cousin of Syahrial, one of the key decision-makers at IBRA, but primarily because he was virtually an insider who had been well informed of many of the distressed assets put on sale. State minister Laksamana set a good example of good governance in May by deciding not to appoint his elder brother as the new president of state-owned PT Garuda Indonesia, even though Samudra Sukardi was the most qualified candidate for that position, judging by his technical competence, his managerial record and the full support he received from the state company's employees. But this time, he did not intervene to prevent a conflict of interest. Possession of information was naturally a great advantage, because quite a large portion of the bad credits being auctioned had not yet been restructured. Investors would still have to restructure the dud loans they bought, a process that would require formidable negotiations with corporate debtors about new terms, repayment schedules and even some refinancing packages. Anugra Cipta enjoyed another huge advantage because it allied itself with Bank Mandiri, the country's largest bank, which was set up in 1999 as the result of a merger of four state banks. These now defunct banks handed over Rp 178 trillion of about Rp 292 trillion in bad loans IBRA took over from closed, nationalized and state banks in 1998 and 1999. True, there is no regulation that bans the relatives of IBRA officials from taking part in transactions with the agency. But if IBRA is truly serious about maintaining a high degree of credibility, developing good governance and high standards of business ethics, it should have prohibited the relatives of senior officials with decision-making authority and those with inside information from doing business with IBRA. IBRA never seems willing to learn from its past mistakes, including the alleged collusion-ridden auction of Indomobil, the country's second largest automotive group, last December. A two-month investigation by the Business Competition Supervisory Commission earlier this year pieced together solid evidence showing that the three final bidders in that auction -- PT Alpha Sekuritas Indonesia, PT Bhakti Asset Management and PT Cipta Sarana Duta Perkasa -- conspired to determine the winner of the tender. The evidence clearly described how two bidders, Alpha and Cipta Sarana, shared information and knowledge for their bids. This conspiracy, the commission stated, was made possible because Pranata Hajadi was an investor in both Alpha and Cipta Sarana. It is sad to note that except for Bank Mandiri, most of the 20 largest winning bidders of last month's auction are investment or securities companies, with little capital and not much experience in debt restructuring, let alone refinancing capability. The strategic objectives of bad loan sales can only be achieved if most of the buyers are banks, capable of restructuring the debts and refinancing the corporate debtors to enable them to resume full-capacity operations. Given its messy image, IBRA might learn a lesson from Indian Minister of Privatization Arun Shouri, who also faces constant criticism from fellow ministers, trade unions and parliamentarians anytime he disposes of a state company. Yet in less than two years, Shouri has succeeded in selling 22 state companies, raising $2.2 billion. As part of his overriding attention to maintaining the integrity and credibility of every deal he makes, Shouri goes the extra mile. Shouri turns over all documents to the Indian auditor general (the equivalent of Indonesia's Supreme Audit Agency) the day after each sale, even though he is not legally required to do so. IBRA may also be well-advised immediately to hand over all documents to the Supreme Audit Agency after each major transaction, to prevent controversy and to uncover early on any wrongdoing that may have occurred. (by Vincent Lingga)

 

From http://www.thejakartapost.com/ 08/26/2002

Brunei and Pension Fund Team Up to Buy into Firms

The Brunei government and the Government Pension Fund have reached preliminary agreement to establish an 8.4-billion-baht matching fund to invest in companies undergoing debt restructuring with local banks and the state-run Thai Asset Management Corp. The Sultan of Brunei is expected to sign a memorandum to establish the fund next week during his state visit to Thailand. The Brunei Investment Agency will contribute two-thirds of the funds to the new matching fund, with the remaining 2.8 billion baht paid by the Government Pension Fund. A Finance Ministry official said the two investors would have joint management of the matching fund, with investment decisions considered on a case-by-case basis. ``Brunei is very confident in the prospects for the Thai economy. The contribution from both sides is estimated to start investing in some good deals in November,'' he said. The majority of investments are expected to be made in firms undergoing debt restructuring, including companies under the TAMC. The matching fund will also take positions in undervalued stocks through private placements. The fund is expected to generate an annual return on investment of 20% throughout its eight-year lifespan. The Government Pension Fund is one of the country's largest institutional investors, with assets topping 160 billion baht. The GPF has positions in two other investment funds, the Thai Opportunity Fund and the Thailand Equity Fund. The Thai Opportunity Fund has already invested two billion baht in listed firms, out of a total planned input of eight billion. The fund has also expressed interest in investing in state enterprises undergoing privatisation. The $500 million Thailand Equity Fund is under management by Cerberus Asia Capital Management. To date, the Government Pension Fund has contributed $5 million to the equity fund. (by Nuntawun Polkuamdee and Krissana Parnsoonthorn)

 

From http://scoop.bangkokpost.co.th/ 08/21/2002

Thailand Sets Aside Emergency Budget of 38bn Bath

BANGKOK: Thailand has set aside 38 billion baht, or $906 million, as the economic stimulus budget for the fiscal year 2002/03 in light of global economic uncertainty, Prime Minister Thaksin Shinawatra said on Saturday."As we expect to spend no more than 36 billion baht out of the total economic stimulus budget of 58 billion baht allocated for 2001/02, the cabinet approved on Tuesday for the leftover 22 billion baht to be carried over for the 2002/03 fiscal year," Thaskin said in a weekly speech on radio."As a result, the government will have a total 38 billion baht set aside as the economic stimulus budget for the 2002/03 fiscal year," Thaksin added. The national budget for the year from October 2002 to September 2003 has been set at 999.9 billion baht ($23.83 billion).Though Thailand is recovering from the 1997/98 Asian economic crisis, its exports are still suffering because of uncertainties in its main markets including the United States and Japan."We must be prepared so the Thai economy will be cushioned in case any crisis occurs," Thaksin said. "It is still uncertain whether the US economy would recover in the second half of the year. For Japan, its economy has not been changed."What is worrying is that the Latin American economy as many countries in that region have faced economic crisis," Thaksin added.State think tank the National Economic and Social Development Board raised its 2002 GDP forecast in June to 3.5 per cent to 4.0 per cent from 2.3 per cent in March, against 1.8 per cent in 2001 as domestic consumers led the recovery in Thailand.

 

From http://www.jang.com.pk/ 08/18/2002

Philippines: Gov't Oks Dollar-Linked Peso Bond Float Worth P7B

The government has approved the issuance of another seven billion pesos worth of dollar-linked peso bonds next month to raise funds to bridge the country's widening budget gap. The budget deficit rose to 119.7 billion pesos in the first half of the year. The amount was 50 percent more than the target for the period and 91 percent of the 130-billion-peso deficit ceiling for the year. National Treasurer Sergio Edeza said this was a good time to revive the dollar-linked bonds, which were first tried by the country last year, as the peso started acting up again. Also called a dollar hedge, the instrument offers yields comparable to interest rates on dollar-denominated Philippine debt papers. It provides a hedge against a volatile local currency since the bonds will be repaid by the government based on the prevailing peso-dollar rate at the time of the maturity. Edeza said the government was planning to tap the same group that underwrote last year's dollar-linked bond issue for the planned fund raising activity next month. The group is composed of Rizal Commercial Banking Corp., Multinational Investment Bancorporation and Deutsche Bank. The bonds, according to Edeza, will likely come in two- and three-year maturities but added that the government was also considering five-year dollar-linked bonds. He said this debt instrument could help stabilize the foreign exchange market since it was expected to drive big players away from the spot market. However, investors were lukewarm on the issuance of the first batch of the dollar-linked bonds last year saying that for them to profit from the debt notes, the peso had to drop to 56 to 1 dollar, which did not happen. The bonds are structured in such a way that when the peso weakens against the dollar at the time of the bond maturity, the investor gets more. But if the peso strengthens at the time of the maturity, the bondholder will get less from his investment. The dollar-linked instrument was one of the several peso-propping measures that Finance Secretary Jose Isidro Camacho proposed to the central bank when the local currency suffered from a bout of speculative attacks in the third quarter last year. The central bank said dollar-hedge bonds discouraged people from buying dollars at the spot market. "This new instrument behaves like a dollar investment so there, these people will no longer need to buy dollars at the spot market," said a Bangko Sentral official. (by Clarissa S. Batino)

 

From http://www.philnews.com/ 08/11/2002

Singapore: Banking Shakeup Is Taxing Ingenuity of Property Managers

New bank premises must be found, and old ones must be put to new use (SINGAPORE) So your favourite bank branch closed. But what happened to it and the other 136 branches that have shut since merger mania struck Singapore's banking sector? The former DBS bank branch at Great World City (and its long queues) have made way for Bread Talk (and even longer queues).And at Joo Chiat, a slimming centre now stands where a POSBank branch once did. As for the former POSB branch in Bukit Timah Plaza, its basement has been transformed into an aquapets store. But not all the premises vacated by banks are occupied - some stand empty and forlorn. The former OUB branch at Katong landmark Tay Buan Guan is deserted, as is the former OCBC branch at Joo Chiat.To recap, DBS Group has closed 89 branches since it acquired POSBank in 1998, UOB has shut 25 branches since its takeover of OUB, and OCBC has brought the shutters down on 23 branches since its union with Keppel Tat Lee Bank. DBS has 109 branches and 36 electronic banking centres, while UOB has 68 branches and OCBC 63. The turnover of branch premises may in future be quicker. In the past, banks preferred to buy shop space for branches, but now the trend is towards leasing.'For banks and companies in general, the logical thing to do in previous years with the property bubble and rising rents was to buy the property, lock in the cost and hopefully enjoy capital appreciation too,' said Kim Eng-Ong Asia Securities research head Seah Hiang Hong.'Now the bubble has burst. So they would rather lease than buy property which is incidental to their core business.' Jones Lang LaSalle (JLL) national director Goh Chak Boon said leasing gives banks the flexibility to move from location to location as their operational needs change. 'Owning the property means they would be faced with a disposal issue when they are done with using it,' Mr Goh explained. 'Leasing also doesn't tie down the capital, which can be used for better purposes. 'Branch premises could range from 1,000 sq ft to over 2,000 sq ft and cost from, say, $600,000 for a housing estate location to $3 million for a prime address, he added.A DBS Group spokesman confirmed the bank is moving towards leasing.DBS has hired JLL to help dispose of the space it owns. The bank has closed 12 branches this year - half of them owned, the other half leased. JLL is also tasked with finding locations for new DBS branches, like the one at HDB Hub in Toa Payoh. The DBS spokesman said most of the unwanted branch properties the bank owns are auctioned. One such property, at North Bridge Commercial Complex in North Bridge Road, was on the block at JLL's auction on Wednesday. The 1,302 sq ft shop was sold for $1.4 million or $1,075 psf. The opening price was $1.2 million or $922 psf. The 999-year leasehold shop is currently leased to Cheers supermarket. A UOB spokeswoman said most of the bank's rented former branch premises are returned to landlords when the leases expire. Premises owned by the bank are sold or leased if there are no immediate plans to use them.'The decision to sell or lease them depends on our long-term needs, the market response and market conditions,' she said. OCBC declined to comment on its plans for premises that used to house branches. (by Andrea Tan)

 

From http://business-times.asia1.com.sg/ 08/12/2002

CSFB Sticks to 5.6% Growth Forecast

CREDIT Suisse First Boston is keeping to its 5.6 per cent growth forecast for Singapore's gross domestic product in 2002, believed to be the most bullish in the market, and even more bullish than the official government estimates of 3-4 per cent, as it expects the economy to surge in the second half. Regional economist PK Basu said his expectation is based on the composite leading index (CLI), which he says rose to a strong 13.3 per cent year-on-year in the second quarter, and 6.8 per cent in the first quarter. The CLI leads real GDP growth by nine months. 'To us, this affirms that the economy is likely to accelerate further in the second-half, and we stay with our aggressive forecast of 5.6 per cent growth in real GDP for 2002,' he said. This implies that real GDP will grow close to 10 per cent year-on-year in the second half, he said. 'We do not consider such growth rates implausible because of the low base from last year - which, when coupled with signs of strong Asian and global demand, suggest that exports and manufacturing should accelerate sharply in 2002.'Mr Basu said he expects exports to grow in double-digits in the second half, aided by the strength of external demand suggested by the OECD leading indicators, ISM (Institute of Supply Management) new orders, and also declining unit labour costs. He expects manufacturing growth to peak in the third quarter before moderating in the fourth quarter of 2002, and said the financial services sector is likely to post positive growth through the next few months on the back of improved stockmarket turnover from the same period last year. (by Serena Ng)

 

From http://business-times.asia1.com.sg/ 08/26/2002

Budget Expected to Have Different Flavour

Budget 2003, to be tabled on Sept 20, will be viewed closely for measures to improve Malaysia's competitiveness and drive private sector demand. The budget is expected to remain stimulative and expansionary although the government has run a budget deficit for the past five years, and it would contain measures to help the domestic private sector take over as the engine of growth. Entitled Promoting a dynamic and resilient private sector, Budget 2003 will be a milestone for Malaysia. Not only because it is seen as crucial at a time when Malaysia tries to re-engineer in the face of heightened competition internationally, it is unique as the budget, to be presented in a month's time, will contain development plans for 2004. This will provide some indication as to how the government will mesh and implement a plethora of development plans on a two-year horizon instead of an annual basis. Furthermore, by giving government departments an extra year's lead time, the government believes the implementation of plans could be carried out without any delay. This would give the departments time to execute tedious tasks such as land acquisition and co-ordination. This announcement of forward plans would also help to ensure that public money is effectively used and filtered through the economy for the desired effect. Government officials have hinted, through comments in the media, that the budget would look towards improving the rate of foreign direct investment (FDI) into Malaysia and try to raise the level of domestic investments. FDI and domestic investment are an important source of not just income but also jobs for Malaysians as the country tries to deal with a high rate of graduate unemployment. "Getting private investment up will once again be a major concern for policymakers,'' said deputy director-general of the Institute of Strategic and International Studies Malaysia (ISIS) Datuk Zainal Aznam Yusof in a report. Minister of International Trade and Industry Datuk Seri Rafidah Aziz said last week incentives would be fine-tuned to attract new investments in the light of competition for fresh capital. Efforts would be made to sharpen domestic growth by focusing on local companies. Another key issue that could be addressed is the k-economy in Malaysia with the 10-year k-economy masterplan scheduled to be unveiled next month. Most talked about is the yearly expectation of direct tax cuts. Opinion on this matter is divided but a tax director of an accounting firm does not believe there would be any cuts. "This is the hardest thing to predict but I don't feel the government would cut corporate or personal income taxes,'' he said. "It needs the revenue.'' He does, however, think the government needs to announce something that can lift the business sector and the economy. "Businesses are not moving forward as much as the government would like them to,'' he added. Budget watchers say that should the government cut direct taxes like corporate or personal income tax, people should expect indirect taxes to rise. "The tax base here has been broadening, but it is still limited when compared with a pure value added tax system,'' said an economist with a local stockbroking company. "Furthermore, there is always concern that raising indirect taxes, in the absence of competition that keeps prices down, could lead to higher inflation.'' Tourism stands to gain a lot from the current budget as the sector has been a wild success so far as Malaysia is benefiting from an inflow of tourists from the Middle East and China. As the nation grapples with the reality of globalisation, education has come into focus. Here, it is acknowledged that improving human resource capabilities and skills of Malaysians would be help to ensure that Malaysia remains competitive and allow the country to move up the FDI value chain. There could be a slight hike in the price of petrol as officials have dropped hints that the government cannot continue subsidising petrol prices to the tune of RM6bil annually. Also on the list of budget watchers is the introduction of a schedule to reduce import duties for motor vehicles, in preparation for liberalisation in 2005 under the Asean Free Trade Area (Afta). Some analysts say some sort of schedule should be introduced, and the government should start reducing import duties as a move to erase uncertainty in the motor vehicle market. If a schedule to reduce import taxes is announced, the government may very well introduce an across-the-board increase in sales tax on cars to compensate for the loss of government revenue. Overall, budget watchers say it is time the government uses the budget to address structural problems in Malaysia. "Over the past few years, we have been fire fighting the economic slowdown. We should now look at how to prevent such fires from taking place,'' said an economist with a local brokerage. (by Jagdev Singh Sidhu)

 

From http://biz.thestar.com.my/ 08/19/2002

State Bank Asks Ailing Stock Banks to Reduce Chartered Capital

(VET)- The central bank has issued a decision forcing ailing joint-stock banks to revise down their chartered capital, something which can lead to bank closures or mergers. Banks which are in the red for three consecutive years will be affected by Decision 797, which will take effect on August 12. This is the central bank's drive to reduce the number of poorly-performing banks, said Pham Thanh Binh, head of the central bank's Banks Department. The current regulations require joint-stock banks in Hanoi and HCMC to have at least VND70 billion in chartered capital, VND50billion in other cities and provinces, and VND5 billion in rural areas. Those failing to have as sufficient chartered capital as required will be compelled to shut down or merge with others. This is a strict requirement for joint-stock banks, but they still have leeway to meet it. "Many banks may fail to meet the requirement, but they will have three years to improve their performance," said Binh. "Many banks have not dealt with losses for years. When the new rule comes into force, they must use their chartered capital to cut losses." He said this rule should have come out three years ago, but the central bank wanted to provide sufficient time for banks to consolidate their financial positions. A Que Do Joint-Stock Commercial Bank official said his bank had racked up big losses for years but had been unable to solve the problem. "The new rule will place us in amore difficult situation," he said. The De Nhat Joint-Stock Commercial Bank (Ficombank), which has chartered capital of VND120 billion, has racked up losses of VND20billion. "We can use our chartered capital to reduce losses as the remaining chartered capital is still higher than the required level," said a bank official. He said his bank would hold an extraordinary meeting at the end of this month to find ways to increase capital and reduce losses.

 

From http://www.vneconomy.com.vn/ 08/08/2002

ADB to Lend Viet Nam $840m for Development

MANILA - Viet Nam will get US$840 million in soft loans from the Asian Development Bank over the next three years to 2005, the Philippines-based lender said yesterday.The money will support 16 projects, the ADB said in its latest Country Strategy and Programme Update.The three-year plan will support reforms in Viet Nam's financial and agricultural sectors, help develop the secondary education system and assist in promoting good governance.It will also support private sector development by fostering the growth of small - and medium-sized enterprises and will be used to help develop competitively-priced electrical power, the ADB added.The programme's focus would be in the central region, where many of the poorest Vietnamese live. Subregional projects, totalling $90 million, are part of the programme in line with the ADB's support for the Greater Mekong Subregional co-operation programme.Aside from the loans, the ADB expects to extend an average of $6 million a year in grants to support the programme. - VNS

 

From http://vietnamnews.vnagency.com.vn 08/24/2002

State Beefs Up Its Commercial Banking Sector

(VNS)- In a bid to beef up the State's commercial bank lending power, the Government has issued them with bonds valued at VND7.8 trillion (US$520 million). The bonds will supplement the bank's registered capital during 2002-2004. Deputy Minister of Finance Le Thi Bang Tam, said the bonds cannot be sold to the public but are owned by the commercial banks as one of their assets. "This is not to raise cash but to bring about an increase in the registered capital of these banks which will heighten their efficiency in capital mobilisation and the provision of loans within the economy," he said. The bonds are also supposed to boost the commercial banks' prestige overseas, giving them 8 per cent secured capital. The Government issued the bonds fearing a sharp rise in the amount of money in circulation could lead to higher inflation rates. "If the State were to provide a large amount of money, it could create risks for monetary policy, "Tam said. As part of the bond scheme annual interest payments will come out of the State Budget. With a total face value of VND7.8 trillion, a 20-year term and an annual interest rate of 3.3 per cent, interest is expected to be around VND6 trillion ($400 million). The interest will affectivity provide capital to the State commercial banks overcoming years. The prime minister has also given the banks the right to mortgage the bonds with the State Bank of Viet Nam if they need to solve financial problems. "However, any loans from the State Bank of Viet Nam will be controlled by the National Assembly and they will have to be coordinated with monetary policy," the deputy minister said.

 

From http://www.vneconomy.com.vn/ 08/05/2002

Viet Nam: Inflation Spectre Looms Following Bank Credit Expansion, Looser Money Policy

(VNS)- Following the central bank's loosening of monetary policy and continuous expansion in bank credit, observers are waiting with bated breath for the first signs of inflation. After the 4.2 per cent inflation of 1998, Viet Nam has consistently managed to keep prices under control. In 1999, inflation was just 0.1 per cent while in 2000, it actually had deflation of 0.6 per cent. In 2001, inflation was again a marginal 0.8 percent against a target of 5 per cent. Prices have gone up 2.8 per cent so far this year against a targeted 3-4 per cent. All that could change. In July, the Government approved an infusion of VND1039 trillion into five State-owned commercial banks, increasing their combined statutory capital by a quarter. Though the Government will issue VND7.84 trillion in 20-year bonds for the purpose, the banks' books will reflect the capital infusion. However, they can only pledge the bonds with the SBV after five years to raise any money. According to Finance Deputy Minister Le Thi Bang Tam, "this is a measure to control money supply and head off inflation." Meanwhile, the SBV has been given the green light to lend VND100 billion to the Industrial and Commercial Bank's training credit fund. The central bank is also set to increase money supply via the bill market. At commercial banks, the growth of loans have exceeded that of deposits so far this year. Following a relaxation of lending rules by the central bank at the beginning of the year, banks too have relaxed their stipulations for lending, with the result that lending has surged sharply. By July, balance out standing had risen 15.4 per cent and loans in Vietnamese dong increased 16.1 percent. Experts forecast that at this rate of growth, outstanding loans will climb 30 per cent in 2002, much higher than in the last few years. To facilitate this particular surge in lending activities, the central bank has pumped a large amount of money into the system. Through open market operations alone, the SBV pumped in over VND5,300 billion in the first six months, a huge figure considering it was just VND3,200 billion in the whole of 2001. However, most of the banks have again run out of liquidity now and hardly seem to participate in auctions of Government bonds and the Development Assistance Fund. Some still hold billions of dong worth of commercial paper, such as Government bonds and bank drafts, and find it hard to turn them into cash because of their low liquidity.

From http://www.vneconomy.com.vn/ 08/08/2002

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Public Accounts Committee Being Abolished

The ad hoc Public Accounts Committee (PAC) is being wound up as directed by the government. The government has directed it to wind up, as it is no more required, an official told PNS. The next PAC that will come into existence through a proper election to the National Assembly will also do accountability of the ad hoc body. The new PAC may look into the huge public money that was paid to its members during its existence and spent on its deliberations. The ad hoc PAC proceedings continued to hit headlines just for painting politicians and at times, civil servants, corrupt, prompting a senior government functionary to recently urge it to be cautious in giving such names to everyone nominated in the audit reports. The outgoing committee sent hundreds of cases of "corruption" and irregularities to the National Accountability Bureau (NAB) for initiation of references, but the NAB did not take up even a single case for serious investigation and framing of proper references to be sent to any accountability court for trial of the delinquent persons. What the ad hoc PAC talked about in its references to the NAB were just administrative irregularities instead of corruption, a NAB official recently told PNS. The ad hoc body was mostly kind enough to bureaucrats as it was dominated by retired civil servants, who had already enjoyed official perks and privileges for many decades, but had taken it as a mission to blacken the face of politicians. More than once, the PAC was locked in acrimonious fights with certain political leaders, who, at times, militantly asserted in public view that the committee's proceedings were meant to bring a bad name to them. Even in an elected government, the PAC serves as a tool of the incumbent regime to hit at its political opponents. The ad hoc PAC also did the same job instead of doing any worthwhile work to be emulated by the next elected body.

 

From http://www.paknews.com/ 08/09/2002

India: Inflation Rises to 2.73%

NEW DELHI: Captains of Indian industry said on Sunday that the worst drought in a decade was likely to shave up to one percentage point off gross domestic product growth. An increase in food prices, meanwhile, pushed the wholesale inflation rate higher. Inflation touched 2.73 per cent in the week ending July 20, compared to the 2.48 per cent of the previous week. According to a snap poll by the Confederation of Indian Industry (CII): ''With the delay in monsoons and the declaration of drought in many states, growth of the overall economy is likely to end up between 5.0 to 5.4 per cent.'' Prior to the drought, industry had predicted that the economy would grow by six per cent. The government has already said the drought is the worst in 12 years and warned that the impact on agricultural production could bring overall GDP growth down by 0.5 percentage points. While 54 per cent of the poll respondents felt that sales growth would be between 10 to 20 per cent in the current fiscal, a significant 48 per cent said profits for their companies would also fall in this range. Inflation could rise further in the weeks ahead because of the impact of the drought. The index for the food articles group rose by 1.2 per cent to 180.5 from 178.4 for the previous week, because of higher prices of fruits and vegetables and coarse grains, the data showed. Prices of pulses and edible oils, however, declined and the index for manufactured product group rose by 0.1 per cent. ''These prices will also go up as the full impact of the drought becomes clearer in the coming weeks. The inflation rate is expected to go up to 3.0-4.0 per cent,'' said D H Pai Panandikar, director-general with the RPG Foundation, an economic think-tank. Inflation levels have been hovering at a 20-year-low in the past six months as demand for goods has been low. Foodgrain stocks, which are presently at record levels, have also kept food prices from rising. Thirteen of the country's 29 states have been declared drought-stricken. With rising inflation, companies are now worried that rural demand will take a beating.

 

From http://timesofindia.indiatimes.com/ 08/04/2002

New Audit Fraud Panel Head

NEW DELHI: Minister for finance and company affairs Jaswant Singh has constituted a high-level committee to look into certain issues pertaining to company accounts and auditor-company relationship. The committee will be headed by former cabinet secretary and ambassador to the US Naresh Chandra. It will have prominent citizens, representing professionals from the corporate sector, accountancy, company secretaries, financial institutions, besides economists. The committee has been set up at a time when the corporate world has been troubled by disclosures regarding accounting practices of some global corporates. These issues, however, have been of concern to India even before the accounting irregularities had been reported. Well before these developments, the department of company affairs has been considering reforms required in this area and has been debating proposals in this respect, an official release said.

 

From http://timesofindia.indiatimes.com/ 08/21/2002

Sri Lanka: Inflation to Go down Further - CB

The Central Bank (CB) expects that inflation would further decline in the second half of 2002 following the reduction of petroleum prices and reduction of prices after implementation of the VAT today. CB officials at a press conference yesterday said they expect the Commercial Banks to reduce interest rates by 1 % to 3 % following the reduction of overnight Repurchase (Repo) and Reverse Repurchase rates last week. "We want to make downward adjustments to the interest rate structure in order to induce more investments and stimulate economic growth," Director Economic Research Dr.A.G.Karunasena said. Addressing the media at the Central Bank, he said that taking advantage of the downward adjustment in the inflation and stability in the financial market, the CB took a decision to adjust the interest rate structure. "All the short term bank rates are below 13 per cent now", Dr.Karunasena said. The Central Bank, reduced the overnight repurchase rate and reverse repurchase rate by 100 basis points from 11.50 per cent to 10.50 per cent and from 13.75 per cent to 12.75 per cent last week. The private sector credit demand would be high due to the slash in the interest rates which will boost investment, he added. Meanwhile, the CB plans to issue a 12 year bond for the first time in the country. The interest rate of this bond could be around or little less than 13 per cent. "We believe insurance companies, provident funds, pension funds, etc will invest in this long term bond," Superintendent of the CB Public Debt Department K.G.D.D. Dheerasinghe said. (by Jayantha Sri Nissanka)

 

From http://www.dailynews.lk/ 08/01/2002

Govt to Retire 290 Billion Debt

Federal Government plans to retire 290 billion rupees worth of foreign and domestic debt in the current financial year. The government has also allocated 290 billion rupees for debt retirement in the current budget. Officials say that despite the repayment of debt the foreign exchange reserves of the country are further expected to grow to 8 billion dollars in 2002-3. At present foreign exchange reserves of the country are little over 7 billion dollars.

 

From http://www.paknews.com/ 08/03/2002

ADB Backs Computerized System to Help Develop Capital Markets in Bangladesh

The Asian Development Bank (ADB) approved today an equity investment of up to US$526,000 equivalent for a 10 percent stake in a new company to establish an automated depository system in Bangladesh. A central depository is an electronic book system to record the title and any transfer of securities ownership. "Computerizing the post-trade processing of securities transactions will help modernize the bourses and pave the way for further development of the capital market," says ADB investment officer Peter Marro. In turn, it is hoped this will generate more local and foreign investor confidence and improve fund mobilization and contribute to economic growth. The company setting up the computerized system is the Central Depository Bangladesh Limited (CDBL). The total project cost is estimated at US$5.26 million. Other investors include local and foreign banks, the stock exchanges in Dhaka and Chittagong, and other financial institutions

 

From http://www.adb.org/ 08/15/2002

 

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Uzbek Gov-T to Revise Tax System, Profit Tax to Be Reduced

At present the share of fiscal, obligatory withdrawals into consolidated budget of Uzbekistan exceeds 35 percent of the GDP.In the world the norms of tax withdrawals into the budget are much lower: in the USA - 26.1 percent, Japan - 22.6 percent and Germany - 29.2 percent. The international practice shows that exceeding these limits leads to reduction of the rates of growth of manufacture and production of GDP as a whole.Proceeding from this, the government has entrusted the General Economic Complex of the Cabinet of Ministers, Finance Ministry together with State Tax Committee and other interested ministries and departments with introducing gradual reduction of tax withdrawal levels when developing the draft of the state budget for 2003 and the subsequent years.Within one month offers should be submitted to the Cabinet of Ministers on reducing the rates of profit tax and reduction of tax burden as a whole.

 

From http://www.uzreport.com/ 07/30/2002

Wages to Double in Turkmenistan

In February 2003, Turkmenistan's wages will double, President Saparmurad Niyazov told the 12th session of Khalk Maslakhatly (People's Council) in the Eastern city of Turkmenabad, formerly Chardzhou, on Friday. The raise will be effective in all enterprises and organizations and in both state-run and private businesses. At the moment, the country's wages average a monthly 600,000 manats ($115 at the official exchange rate and $30 at the black market rate).

 

From: http://www.cacianalyst.org/ 08/09/2002

 

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Credit Card Reform to Save $360m

THE Reserve Bank of Australia has held out the promise of lower retail prices and interest rates for the nation's 10 million credit card users from its reforms to the $89 billion card industry. The reforms, described by consumer advocates as the biggest changes to the banking system since deregulation in the 1980s, effectively have stripped the banks of their ability to set wholesale prices for the card industry. Instead the RBA will develop a new pricing model it claims will bring savings of $360 million a year. Combined with further changes to the system, consumers could be saving $1 billion annually by 2006, the RBA says. Treasurer Peter Costello welcomed the reforms and urged the banks to pass on the savings. Mr Costello also is urging the RBA to introduce more banking reforms - covering automatic teller machine and EFTPOS fees - when the credit card changes are introduced in July. The key RBA reforms announced yesterday are: changes to the cost formula for bank interchange fees (the fees charged between cardholders' banks and retailers' banks for processing transactions); allowing retailers to pass on to consumers the merchants' service fee charged by banks, and; ending restrictions that prevent competitors emerging. The RBA reforms immediately sparked threats of legal action by the card companies and warnings the changes could bring down the card system. Mastercard senior vice president and general manager for Australasia, Leigh Clapham, said the central bank's prescriptions would have devastating effects on the economy. "If the Reserve Bank is allowed to proceed with its announced changes then, instead of positive reform, Australia will have fewer payment alternatives, more expensive payments, lower consumer spending, a shrinking economy, and increased unemployment," he said. The reforms are a major blow to the banks and credit card companies, which have lobbied for three years to head them off. ANZ Banking Group, the country's largest card issuer, said it would bear one third of the cost of the reforms and warned its 2003 annual net profit would fall $40 million as a result. However Stan Moore, policy director for the Australian Retailers Association, said the changes represented a win for retailers and consumers. "It is going to be hard to reflect the changes in the price of baked beans, but our view is that given retailing is such a competitive market any cost savings to retailers would be . . . be passed on to consumers," Mr Moore said. In one compromise on interchange fees, the RBA appears to have headed off the banks' threats to cut or withdraw interest-free periods on credit card purchases. Justifying its reform plan, the RBA said consumers were paying "more for retail payments than necessary" because the banks steered consumers to credit cards at the expense of cheaper methods, such as debit cards. Credit card usage in Australia has boomed since the mid-1990s when banks introduced loyalty schemes that reward card users for amounts spent. Total spending rose by $13 billion to $88.7 billion in the year to June, while outstanding balances on bank-issued credit cards reached $21 billion. RBA Governor Ian Macfarlane said the reforms would leave the structure and safety of the card market intact, but would improve efficiency. Mr Macfarlane also promised the reforms would "promote genuine competitions on credit card interest rates". He said new entrants could cut credit card interest rates in the same way mortgage lending specialists had forced banks to lower home loan rates in the 1990s. (by Andrew White and Sid Marris)

 

From http://www.theaustralian.news.com.au/ 08/28/2002

New Zealand: Bank Pauses as Global Outlook Points to Gloom

Acting Reserve Bank Governor Rod Carr left interest rates unchanged yesterday and is "not at all certain" any further rises will be needed. "My judgment is we can afford to pause, to wait and watch," Carr said. What has given the bank pause is the "storm warning" from the global economy, especially the risk to the world recovery posed by the steep falls in share prices. "A weaker world will do some of the work monetary policy would otherwise have had to do," Carr said. Although the economy's resources are stretched, following three years in which growth has averaged an above-trend 3.5 per cent, and core inflation indicators are all pointing close to 3 per cent, there are recent signs that the economy is losing momentum. They include some moderation of growth in retail sales, a slowdown in activity in the housing market and lower consumer and business confidence. "As a result we are not treating the potential need for a further rise in interest rates as urgent, or at all certain," said Carr. The bank's projections still include some increase in short-term interest rates, to around 6.25 per cent in the first half of next year. That would imply one or two more 25 basis point increases in the official cash rate, which is 5.75 per cent. But that is a much more modest increase than was foreshadowed in the previous monetary policy statement in May, which had 90-day bank bills averaging 7 per cent through next year. Carr yesterday emphasised the highly conditional nature of such projections. One economist who thinks the bank has done its dash in terms of raising rates is Deutsche Bank chief economist Ulf Schoefisch. There was sufficient evidence the economy was losing momentum, he said, while the world outlook was more likely to worsen than improve. Another factor is forthcoming changes to the policy targets agreement (PTA) between Finance Minister Michael Cullen and the new governor, who is expected to be appointed next month. "The changes to the PTA will most likely instruct the Reserve Bank to be more willing to use the full width of the target range," Schoefisch said. "The central forecast scenario released today shows inflation retreating to around 1.75 per cent over the course of 2003." The Reserve Bank says that assessing the likely path of inflation requires assessing the inflationary response to economic growth. "This is not simply a mechanical exercise of identifying a certain growth rate or speed limit for the economy beyond which inflation will emerge." The economy's ability to grow without inflation has been boosted by a surge of net immigration (though it expects that to taper off) and by a rise in the participation rate - the proportion of people of working age who are either working or actively seeking work. But the bank notes that its inflation forecasts over the past year have proven optimistic. "Although the economy's ability to grow without generating inflation has proven stronger than we thought, so too has its actual growth performance." And it cites three different measures of core inflation - which filter out one-off or unusual price movements or price changes that monetary policy should not respond to, such as international oil prices or fruit and vegetables. All three are close to 3 per cent. (by Brian Fallow)

 

From http://www.nzherald.co.nz/ 08/15/2002

Australia: CBA Defends Job Cuts

THE Commonwealth Bank of Australia has said it was being open in announcing job cuts at the same time as its $2.6 billion net profit for the financial year. The job cuts were part of the bank's responsibility in running a competitive organisation in the long term, CBA chief executive David Murray said today. The job cut news came yesterday, as CBA reported an 11 per cent rise in net profit to $2.66 billion for the year to June 30, 2002. That was up from $2.40 billion in the previous year. "It means essentially that we're in good shape in difficult times," Mr Murray told Channel 9. "On one level it's good news that we're travelling okay, but our position on jobs is about the responsibility that we have to make longer term decisions for our competitiveness." The bank had the same responsibility as other companies in running its organisation to be competitive in the long term, he said. "We might have said nothing about jobs yesterday, but that would not be open and transparent," he added. "We don't do it that way." The bank did not plan to downgrade branches or make radical changes, he said. Mr Murray also urged other companies to follow CBA's lead in dropping executive options schemes and phasing out directors' retirement benefits. "I hope so," he said, when asked if he expected other companies to follow. "I think for large publicly listed companies executive options schemes are too dilutive to shareholders and they can create super gains that always carry the risk we saw in the United States of driving the wrong behaviours. "We can have restricted shares that are far less dilutive to shareholders and I believe that's a better structure."

 

From http://www.theaustralian.news.com.au/ 08/22/2002

 

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Efforts to Speed Up Dynamic Pacific Private Sector Get Funding

The Asian Development Bank (ADB) has agreed to provide a US$300,000 grant to formulate a strategy to develop a dynamic private sector in its Pacific member countries. A strong private sector is vital to long-term economic growth and improved quality of life, a bank statement said. But despite efforts by development agencies, the response from the Pacific countries has generally been slow, it said. The new strategy aims to facilitate ADB interventions to improve the business environment, generate opportunities, and catalyze private investment. It will also provide guidance on how to: * implement governance in the public and private sectors, * and foster financial intermediation, public-private partnerships, and subregional cooperation. Said Robert Siy, Jr., Director of ADB's Pacific Operations (Division 2): "To be globally competitive, Pacific countries need to have a healthy private sector that serves as the engine of innovation and growth. "They need to create an environment that attracts the private sector to invest and enable the countries to prosper." The bank said the project will produce: - assessments of, and strategies for, the development of the private sector in four selected Pacific countries (representing at least one country from each of the bank's subregional groupings), - a regional assessment of the private sector, - and a private sector development strategy for the Pacific. The project aims at developing a consistent, holistic policy and institutional framework that will help overcome the underlying, impeding factors, the bank said. The project will develop approaches and instruments to address the constraints. The focus will be on finding subregional solutions through dialogue with the governments, other development institutions, and the private sector, it said.

 

From http://www.pacificislands.cc/ 08/02/2002

Strategy for Dynamic Private Sector in the Pacific

MANILA, PHILIPPINES - The Asian Development Bank (ADB) has agreed to provide a US$300,000 grant to formulate a strategy to develop a dynamic private sector in its Pacific member countries. It regards a strong private sector as vital to long-term economic growth and improved quality of life. The strategy aims to facilitate ADB interventions to improve the business environment, generate opportunities, and catalyze private investment. It will also provide guidance on how to implement governance in the public and private sectors, and foster financial intermediation, public-private partnerships, and subregional cooperation. "To be globally competitive, Pacific countries need to have a healthy private sector that serves as the engine of innovation and growth," says Robert Siy, Jr., Director of ADB's Pacific Operations (Division 2). "They need to create an environment that attracts the private sector to invest and enable the countries to prosper." The project will produce assessments of, and strategies for, the development of the private sector in four selected Pacific countries (representing at least one country from each of ADB's subregional country groupings), a regional assessment of the private sector, and a private sector development strategy for the Pacific. Despite efforts by development agencies to define policy and institutional settings and to establish an environment conducive to the private sector, the response from the Pacific countries has generally been slow. The project aims at developing a consistent, holistic policy and institutional framework that will help overcome the underlying, impeding factors. The project will develop approaches and instruments to address the constraints. The focus will be on finding subregional solutions through dialogue with the governments, other development institutions, and the private sector.

 

From http://www.adb.org/ 07/31/2002

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