September 2002, Issue No. 10
 
 
 
  ASEAN Adopts Uniform Policies to Develop ICT Sign Manila Declaration
Central Asian States Seek New Voice After UN Summit
ASEAN States Go Ahead with Liberalization Plan
Eurasian Economic Community Premiers Fail to Agree on Joint Customs, Tax Policies
 
 

Uighur Group Added to U.S. List of Terrorist Organizations
China: More Efficiency Urged for Money Policy
Stock Fund Law Expected
China Tightens Rules on Land Use
Water Law Streamlines Management
Rules on Foreign Investment in Listed Companies Drafted
China to Popularize Mandarin by 2010
Jiang Urges Focus on Re-Employment Efforts
China OKs Generic Anti - AIDS Drug
Experts Urge Changes to Corporate Law
China Implements New Copyright Law
Laws Revised to Meet Promises
Regulation Issued for Cultural Preservation
Hong Kong: Exco Briefing on Subversion Law
Regulations on Anti Money Laundering to Be Promulgated
Premier Urges Attention to Detail in National Tax System
Japanese Gov't to Clarify Terminology in War Bills
Current Monetary Policy to Remain as It Is
Gov't Drafts Public Protection Bill for Emergencies
Terror Law May Get Sharp Teeth
Gov't Froze 347 Terrorist-Related Financial Transactions
Public Safety Bill Added to Attack-Response Plan
Japan Expands Short-Selling Rules, Sets Guidelines for Banks
Cabinet to Call Shots on Deregulation Zones
Gov't to Raise Taxes to Curb Housing Speculation
South Korea: 5-Day Workweek to Start in July 2003
Increased Tax Deductions for Education Spending
Labor, Management Sabotage 5-Day Workweek System
Government OKs N.K. Aid Fund
N. Korea Declares Border City a Special Zone
Roh Moo-hyun to Enlarge Upon "Sunshine Policy"
Overall Tax Reform to Boost Growth
Summit Success as North Korea Opens Up
ASEM Vows to Support N.K. Reform

 
  ASEAN Seen to Forge FTA with Japan Ahead of That with China
Brunei: Childcare Programme
Indonesia: Coordinate Monetary Policy, Supervision
Govt Moves to Increase Spending on Education
Gender Equality Introduced in Citizenship Bill
New Copyright Law to Boost Local Software Industry
Malaysia: Biggest Slice of Pie for Education
Project to Raise Villagers' Income
Philippines: New AO Expands Doe Powers to Undertake Policy Reforms
New Education Policy Aims for Universal Primary Education, Gender Equality
Thailand: Bid to Cease Primary Level Entrance Exams
Bureaucratic Reform: Suspense
Viet Nam Govt Boosts Its Investment in Education
Competition Law to Be Laid Down in 2003
Government Works Hard to Root Out Opium Planting in Nghe An
 
 

Law Ministry Mulls Changesin Bar Council Act
Bhutan: Civil and Criminal Procedure Code for Police Officials
India: HC Can't Ask Govt to Alter Sentence--SC
Jana Rules Out Amendment to Civil Procedure Code
Delhi Govt's Legislation Derailed
National Policy on Adolescence Proposed
Sri Lanka: New Laws for Easier Local and Global Connectivity
National Policy on the Disabled
Maldives: Gayoom Calls for "Global Partnership" to Promote Development, Protect Environment
Nepal: State of Law and Order Will Decide Emergency Extension-- Gautam
Nepal: Move to Upgrade Criminal Justice
Pak Bar Council Slams New Media Laws
Ordinance for Election of FATA Senators Promulgated
Implementation of Industrial Laws Ensured-Dawood
SC Asks NAB to Obey Law
Cabinet Approved Labor Policy, IRO 2002
Legislation for Reforms in Universities Approved
Pak Passes Freedom of Information Ordinance

 
 

Central Asia: Militarization Could Come at Cost of Regional Stability
Eurasian Economic Community Premiers Fail to Agree on Joint Customs, Tax Policies
Council of Europe Sets Deadline for Armenia to Abolish Death Penalty
New Azerbaijani Directives on State Secrets Amended
Azerbaijan: Journalists Clash with Government over New State-Secrets Decree
Iran's President Fights Right Wing with New Laws
President Objects to an Item of the International Convention on Terrorism
Kazakhstan: International Compromise Sought on Investment Law
Draft Law on Computerization
Draft Law on State Regulation of Oil Production
New Law Envisages Transparency of Statistical Data
Uzbek Deputies Developing New Laws on Civil Society

 
  Australia: Justices Hammer Tampa Laws
Howard Defiant on Kyoto Rejection
Tougher Laws for Violent Crime
Water Reform Menace for States
ASIC Laws 'Over Top'
Micronesian Voters Keep Current Constitution
New Zealand: Judges to Go Under Spotlight
Court Ponders Intent of Law on Sentencing
New Minister Wants Action on Women's Policy
Developer Faces Mass Lawsuit
NZ Urged to Give Treaty Certainty in Law
 
  OECD Tax Center to Operate Until 2007
Former Soviet States Seen as Flawed But Capable of Reform
 
 

China: 'Healthy' CCP Axes 120,000 in Anti-Graft Drive
Civil Society Plays Bigger Role
Government to Trim Approval Procedures
China to Further Improve Government Efficiency
JAPAN: Tanaka Reelected Nagano Gov.
LDP Demanding Major Cabinet Changes
Suzuki-Linked Bureaucrat Denies Bid, Fund Illegalities
Koizumi to Reshuffle Cabinet Sept 30
Forum to Examine New Structural Reform
Lawmakers Call for METI to Lose Nuclear Administration Role
SOUTH KOREA: Commission Calls for Hearings for Ranking Officials
PM-Designate a Judge with Clean Image
Ex-Supreme Court Justice Named New Prime Minister
Inspection Focused on Draft Scandals
Chung MJ Officially Declares Presidential Bid
Lawmaker Alleges Corruption in Korea Life Deal

 
  Indonesia: Clean Water -- Clean Govt?
Good Governance to Secure Summit Outcome
Malaysia: View New System in the Long Term, Government Staff Told
Findings of Public Perception on Corruption to Be Revealed
PSD: Most Civil Servants Will Opt for Scheme
Civil Servants Must Clear Exams and Courses for Promotion
Philippines: People Still Trust Courts
Thailand: Verdict's Reversal Upsets Graft Panel
Veerapol Now Faces Court Battle
Thailand: PM: Don't Merge IT Agency
Ngos Seek Action on Graft
Social Security Uptake Disappoints Ministry
Viet Nam: PM Khai Wants New Cabinet to Put Policies into Practice
 
 

Bangladesh Set to Name New President
Bangladesh: Reshuffle Speculation Makes Ministers Wary
Bangladesh: New President Vows to Protect Constitution
Delhi Govt Seeks More Powers
India: Justice System Needs to Be Overhauled
New System of Central Excise Registration from Oct 1
Commission Releases Names of Ex-MPs Not Submitting Property Details
Nepal: District Election Officers Announced
Govt to Establish Procurement Authority

 
 

Opposition Leaders Say Azerbaijani Referendum Marred by Fraud
Georgian Parliamentary Deputy Demands Shevardnadze's Resignation
Kyrgyz Opposition Proposes Amending Composition of Constitutional Council
Constitutional Council Gets Under Way in Kyrgyzstan
Kyrgyz President Rejects Calls for Parliamentary Republic
Kyrgyz Constitutional Council Elects Opposition Figure as Co-Chairman
Reforms Carried Out in Presidential Administration of Kazakhstan
Karabakh President Sworn in for Second Term
Kazakhstan's President Says He Might Run for Further Term

 
  Australia: Health Care Costs Pass $60b Mark
Treasurer Moves to Curb Regulators
John Howard's New Hidden Weapon-- The Clerk Army
More Reforms Necessary-- APRA
Cooks PM Distances Himself from Adviser's Media Laws Threat
Cooks Development Board Chair Resigns
Government Outvoted on Health Committee
New Zealand: Police Expand Anti-Terrorism Unit
PM's Department Rebuked for Secrecy
PNG Anti-Corruption Campaign in New Phase
Papua New Guinea Police Commissioner Replaced
First Woman Elected to Lead Noro Town Council in Solomons
 
  Credit Unions to Face Stricter Supervisory Rules
Seoul to Host Asian Labor Conference in June 2004
Improving Labor Standards Crucial for Development - ADB Workshop
 
 

CHINA: Mayors Fight Traffic Jam with High-Tech Systems
Ruling on City's Public Affairs
China to Promote Computerized Governance
Google Is Back in China But Don't Try Asking Any Difficult Questions
Taiwan, China: Firms Toughen Internet-Use Policies
New Customs Inspection System Opens to Fight Smuggling
Japan: Corporate Governance Re-Examined: S&P
Certification to Separate Quality MBAs from Bogus Degree Holders
Firmer Self-Regulatory System Needed to Prevent Price Manipulation
Employers Prioritize English Proficiency
Consolidated Tax System to Be Introduced
Loyalty Management Essential in Modern Marketing: Bain & Co.
2 Daewoo Firms to Graduate From Workout Plan
KOTEC Head Calls for Risk Management System

 
  E-Learning Remains Big Question in Indonesia
Indonesia: Free Competition in Power Sector Will Begin in Batam
Laos: Communities to Manage the Environment
Malaysia: UN Official: Judges Need Human Rights Education
Singapore: Study Shows Glcs Have Done Better Than Non-Glcs
Gov't Role in Business Takes New Twist
Income May Launch Online Risk Exchange
Thailand: Students Slam New Style
Party Looks Online to Deliver Message
Viet Nam: President Praises Farmers' Poverty Reduction Efforts
 
 

National I-Card for Some States
High-End Technology to Make India a Knowledge Hub-- Nasscom
Pak's First Health Information Management System Set Up

 
  Workshop on Economic and Fiscal Policies in Astana
Uzbek Constitutional Court Discusses Improvement of Work
 
  Australia: States Go It Alone on Insurance
Housing System in Shambles
Fiji Among Seven Equator Prize Winners at World Summit
New Zealand: Government Sets Up Special Spin Team to Get Good News Out
 
  A Year Later, Central Asian Economies Have Not Changed Course
Strong Asian Performance Boosts Intertek
Seventh ECO Summit to Be Held in Istanbul on 13-14 October
ADB Warns of Downgrade for E. Asia Prospects
Asia-Pacific Offered Expertise as Johannesburg Followup
East Asia's New Rail Link: All Aboard
Mekong River Countries Stepping Up Cooperation in 10-Year Plan
WSI Internet Soars as Asian Women Take to the Net
September 11 Dealt Blow to Civil Society Development in Central Asian States
 
  Shanghai Launches Anti-Hacker Monitor System
Central Government to Invest 90 Billion Yuan in Tibet
Nortel to Provide Optical Ethernet Network in Southeastern China
China to Open Up Its Basic Telecommunications Sector
China's Economy to Grow at 8 Percent in 2006: Economists
IP Phone Numbers to Stir Japan Demand
China to Catch Japan by 2032: Survey
Young Japanese Leaders Join with the World Economic Forum to Launch "Blueprint For Japan 2020"

Japanese Colleges to Get State Funds to Find the Next Yahoo!
Detailed Plans Unveiled for New Asan City
Mobile Phones to Replace Credit Cards
North and South Korea Reconnect Rail Links
Workers' Tax Burdens Surge Since 1997 Crisis
 
  PM: Govt Will Protect Local Businesses
Laos: ADB To Support Northern Development Planning Project
Myanmar Strives for Industrial Advancement
Malaysia: Getting Set for Challenges in Global Economy
Indonesia: Government Provides 25% Discount for SME Debts
New IT Company Formed to Market RP's E-services
Philippines: BOC Set to Implement Full Computerization Program
Bayantrade Chief Asserts E-marketplace is Fastest Growing Sector in E-commerce
Administrative Tax Measures Lag
Penang Unveils K-ICT Blueprint
EC Pledges $98m for Development Efforts
P33.7-B Projects Okd by President
Singapore Telecom Plans $1.6B Cable
S'pore Start-up Pips Giants like Microsoft
UN Reps Declare Viet Nam Is on Right Development Track
Gov't Pounds Internet Users to Value Education to Fend Off Cyber Attacks
 
  Bangalore IT.Com Expected to Garner Business Worth $300 Million
Regional Cooperation Needed to Develop Water Resources: PM
Bhutan's IT Vision
India Still Ahead of China in IT
Bangladesh: Int'l Symposium on Population Begins
Certificate Distribution Ceremony of ITCN Asia 2002 Held
IT Companies Prefer Experience over Youth
IT Capital Cold to Online Bill Payment
Maldives: MNCCI Launches Website
Musharraf Approves $ 1.2b Project for Karachi--Mega Projects Being Completed at Fast Pace
Pakistan: Macro Economic Indicators Show Growth Since 9/11
Govt Enhanced Science & IT Budget by 1 Billion
$1.5m R&D Fund for Knowledge Industry
 
  Information Security in the State Sector
Helping to Rebuild Education System in Afghanistan
Uzbek Government Grants Privileges to Internet Providers
IMF Delegation in Uzbekistan to Assess Macroeconomic Situation
Central Asia Gas Pipeline Talks Revived
 
  Fiji's First Web-Based Radio Program Launched
Canberra Looks at $9b Insurance Plan
IT Specialists Fight Massive Pay Cuts
Women Dominate New Jobs Growth
Australia: Growth Hits Speed Bump
IT Consortium Gets Govt Backing
New Zealand: Long and Winding Road to Approval of Eastern Corridor
Electricity Shortages Tipped as Maui Declines
Help for Hearing on Internet
New Caledonia Joins Pacific Islands Forum Trade, Investment Meeting
Solomon: ICT-- Rural e-Mail Station Brings Farmers Access to Information
Pacific Prepares for Economic Partnership Negotiations with EU
Challenge to Papua New Guinea- Find a National Culture
Pacific Ywcas Get Help Bridging the Digital Divide
 
  ADB and MIGA Promote Foreign Direct Investment in Asia
APEC Finance Ministers Commit to 'Immense' Battle Against Terrorism Funds
Statement of Heads of Regional Development Banks
 
  BOC Ranked 1st Among Emerging-market Banks
Shanghai Sets Up Credit System for CPAs
China Unicom Launches Mega Flotation
China's Small, Medium-sized Banks Open to Private Shareholders
China: Bank Giant Looking to NPLs
Japanese Government Bond Auction Fails
Japan: Nation's Tax Revenue Down 17.4 %
Nikkei Index at Its Lowest in 19 Years
Central Bank in Japan Will Buy Stocks From Banks
China Surpasses US As World's Most Attractive Investment
Size of Public Funds Grows
Public Funds Ruled Out for Japanese Banks
Boj Takes Gamble to Avert Financial Crisis
IMF Calls on Japan to End Deflation within 18 Months
Banks Urged to Improve Financial Health
Bad Loan Trade Cause Huge Losses for State Agency
Budget Proposal Hits W111.7 Trillion
Koizumi Backs BOJ Bad-Loan Disposal Measures
 
  Singapore: Banks Wary of Extra Loans under New Lending Rules
Indonesian Risk Professional Association Established in Jakarta
Malaysia: Tough Competition in Attracting FDIs
Philippines: Anti-Poverty Bank for ASEAN Urged
Indonesia: Cleaning Up the Banks
Vietnam Acts to Boost Stock Market
Singapore to Boost Finance and Medical Hub Status
Banks Have to Do More to Step Up Security
UOB Joins Tie-Up to Invest in High-Growth China Firms
New Lending by Thai Commercial Banks Turns Positive
World Bank Earmarks $3bn Assistance for VN
MAS To Banks: Reinforce Internet Banking Security
 
  Pakistan: Domestic Debt Surged by Rs 135bn in 2 Years- SBP
Tax-Free Bonds to Be Launched on Oct 1
Reforms Stuck, India's Credit Rating Tumbles
Reserve Bank Likely to Unveil Big-ticket SLR Revamp Package
India: PM Holds Cabinet Meet on Disinvestment
Financial Implications of NAB-FIA Merger Ignored
Govt to Introduce Islamic Banking-Musharraf
Pak Improves Investment Potential
National Finance Commission Meeting Makes Progress
 
  ADB Issues Loan to Tajikistan for Landslide Stabilization
Total Foreign Debt of Kazakhstan Is Around $15 Billion
Kazakh Budget Parameters for 2003 Outlined
 
  Solomons Budget 'Blow Out' Continues
Visa Challenges RBA Reforms
New Zealand: Officials Confused de Facto Facts
Internet Banking a Reality in PNG
China Commits K4m Cash Grants to Papua New Guinea's 2003 Budget
Australia: Howard Consumer Levies Hit $1bn
 
  Private Money Flees Emerging Markets
 
  China: Private Trading Firms Play Big Role in Pudong
Japan: Majority of Voters Back Privatization of Road Entities
Gov't to Review Airport Privatization Plan
Hana-SeoulBank Merger Deal Wrapped Up
KEPCO Unveils Privatization Plan for South-East Power
Daewoo Executives Face Lawsuits
 
  Indonesia's Indofarma to Sell 51% of Its Govt Owned Shares
Malaysia: Private Hospitals Deny Raking in Profits
RP to Delay Petrochem Sector Liberalization
Philippines: DBP Assures Support for Gov't Logistics Program
Privatization Office Okays Sale of Gov'T'S 10% Stake N Malampaya Gas Project
 
  India: Proposal to Privatise Metro Airports
Key Privatizations Delayed
Sri Lanka: CPC Will Not Be Privatised - Karu Jayasuriya
Pakistan: Privatization Commission Invited Eois
 
  Azerbaijani President Signs Decree on Private Sector
Privatising Kyrgyzstan
125 Unprofitable State Enterprises to Be Liquidated in Uzbekistan
 
  New Zealand: Public Benefits of Private Cash
Telecom NZ Shares on Offer After Verizon Sale

ASEAN Adopts Uniform Policies to Develop ICT Sign Manila Declaration

MANILA (PNA) - For the first time, the Association of Southeast Asian Nations (ASEAN) countries have agreed to adopt a uniform policies and undergo collaborative projects intended to exploit fully the region's competitive edge in information and communications technology (ICT). These initiatives were the result of the 3rd Telecommunications Senior Officials Meeting (TELSOM) and 2nd ASEAN Telecommunications Meeting (TELMIN) held recently at the Makati Shangri-La. Also, the ASEAN ministers signed the Manila Declaration 2002, a cooperative pact to exploit the competitive edge of member-countries in ICT. Here for the TELSOM and TELMIN were Dato Haji Abdullah Bakar, Brunei Darussalam; Koy Kim Sea, Cambodia; Lukman Hutagalung, Indonesia; Khannguen Khamvongsa, Lao PDR; ATUK Dr. Halim Shafie, Malaysia; Khin Maung Oo, Myanmar; William Hioe, Singapore; Rianchai Reowilaisuk, Thailand; Gnguyen Minh Hong, Socialist Republic of Vietnam. Host was the Philippines through the Department of Transportation and Communications (DoTC) WITH Undersecretary for ICT Virgilio Pe?a as chairman. In the draft "Manila Declaration 2002,'' it was agreed that telecommunications has progressed into a broader ICT and is among the biggest engines of economic growth bringing in substantial trade and investment flow in the region, hence the need for cooperation among the ASEAN member nations. The Manila Declaration stated that the ASEAN leaders "are mindful'' that the rapid advancement and convergence of ICT "require sharing of information and experiences'' to create a "framework responsive to technology development amongst economies.'' The ministers acknowledged the importance of narrowing the development gap between the older and newer ASEAN members to achieve a "successful integration in the region.'' Pe?a said these initiatives aim to address five ICT-related issues, namely, establishment of regional information infrastructure; human resources development (HRD) especially for developing countries in handling this infrastructure; addressing digital divide and enabling universal access; promoting trade and investment; and promoting positive Internet use. The ministers likewise committed to create market conditions and formulate policies to foster competition in the ICT sector. In addition, they may forge partnerships in ICT activities, policy development and program implementation. The collaborative initiatives that were outlined in this year's TELSOM declaration are as follows" * Develop programs that will strengthen ICT human resources within ASEAN and retain within the region the skills to sustain growth and development of the ICT industry, Pursue the setup of an ASEAN Network Security Coordinating Council as a focal point for a well-coordinated management and information and network security issues including protection of misuse of ICT. Initiate discussions with the private sector on fair and more sustainable international charging arrangements for Internet services. Promote intra-ASEAN trade and investment through the identification and elimination of impediments, fostering pro-business policies on ICT trade and investment and establishing regulatory environments which are transparent, predictable and non-discriminatory. Accelerate the establishment of the ASEAN information infrastructure by strengthening the development of national information infrastructures of member countries and existing interoperability and interconnectivity, thus enhancing global competitiveness. Implement joint activities with the private sector, academe and other organization in the area of HRD and research and development (R&D) of ICT. * Collaboration between ASEAN ICT centers of excellence for joint R&D initiatives in software and content development in particular exploring the open source platform. Establish a database of best practices and applicable standards and frameworks related to the ICT sector to enhance ASEAN competitiveness. Facilitate transformation of ASEAN into a knowledge-based economy by improving the adoption and use of ICT products and services through universally accessible ICT networks. Undertake activities aimed at promoting positive use of the Internet through formulation of common regional guidelines and the development of websites for information exchange in areas such as e-commerce, e-learning, teleworking and e-community. Develop common ASEAN position to address international and regional telecom and IT issues of common concerns to World Trade Organization (WTO), World Intellectual property Organization (WIPO) and other organization. The next TELSOM will be held in Singapore. Aside from internal meetings, ASEAN telecom officials are also planning to hold joint consultative meetings with Japan, Korea and China. The ASEAN was established on Aug. 8, 1962 in Bangkok by the five original member countries, namely, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Brunei Darussalam joined on Jan. 8, 1984, Vietnam on July 28, 1995, Laos and Myanmar on July 23, 1997 and Cambodia on April 30, 1999. The ASEAN region has a population of about 500 million, a total area of 4.5 million square kilometers, a combine gross domestic product of US$737 billion, and a total trade of US$720 billion. (by Lynda B. Valencia)

From http://www.mb.com.ph/ 09/02/2002

Central Asian States Seek New Voice After UN Summit

The United Nations' World Summit on Sustainable Development ended in Johannesburg on September 4 without a bold statement, after leaders from hundreds of countries tried to gather issues from ecology to development into a worldwide action plan. For all UN members, and for the fragile former Soviet republics in particular, the existence of such a conference reinforced a truth that drives policy. The upcoming anniversary of the terrorist attacks on the United States emphasizes the same truth: to survive and grow, countries must control risks from within and beyond their borders. Since the ideology that fueled the attacks and the natural resources that threaten the ecology are both abundant in Central Asia, the summit raises questions about how Central Asian republics can help the world assess and mitigate risks. Those questions are even harder to answer than the ones that came up in the summit. Summit participants sought a formula through which poor nations like Uzbekistan and Tajikistan could achieve the living standards common in developed nations, without those nations' reliance on fossil fuels. More immediately, they sought to understand how chronic poverty inspires religious extremism and how extremism encourages terrorism. Participants often cited the Ferghana Valley, which runs through parts of Uzbekistan, Tajikistan and Kyrgyzstan, a prime example of the sort of place where poverty can link to terrorism. To prevent terrorism, as to prevent environmental disaster and encourage growth, the heads of these states may have to move aggressively against the risks of letting poverty fester. As many analysts in the past year have done, conference participants linked poverty to wider issues of democracy and human rights. Poverty-hit masses who live in undemocratic states cannot find any legal channels to express themselves democracy, and can come to see terrorist networks as the only agencies that can fight their own governments. Terrorist networks may encourage poor and politically repressed people to view violence as a form of dissent. When those networks reach international proportions, as al Qaeda has, they threaten democratic as well as autocratic states. So conference participants discussed ways to make poverty less stubborn. They established close links between citizens' wealth and the health of their environment. This logical path indicates why the conference could not produce any triumphal treaty. Even if countries committed themselves to democracy and sustainable growth, demented or homicidal terrorists would still be able to wreak havoc as long as they could find sympathizers to finance their work. So Central Asian governments, facing desperately poor populations may have to provide economic incentives to steer citizens away from extremism. This would entail land reform, programs to wipe out corruption and clarify investment climates, establishing independent courts and ending political persecution. The summit declaration emphasizes that "democracy, the rule of law, respect for human rights and freedoms, and achievement of peace and security are essential for the full achievement of sustainable development. Together these objectives are indivisible and mutually reinforcing." In Central Asia, selective use of legislation is common. To satisfy the spirit of the UN declaration and to discourage extremism from gaining political or financial strength, regional governments could bolster stability by streamlining the functions of the state apparatus and providing for multiparty democracy and pluralism. Unfortunately, the region's economic strategy does not necessarily imply a need for swift political reform. The Johannesburg summit's failure to force hard targets for worldwide adoption of renewable fuels must have gladdened delegates from Kazakhstan, Azerbaijan, Turkmenistan and other states that hope to reap profits from Caspian Basin energy exports. The region looks likely to provide oil and gas importers- including the US, India and China- with an alternative source of fossil fuels to keep the Persian Gulf states in check. Beyond the basin, Central Asia's potential for developing and exporting renewable energy seems modest at best. Tajikistan and Kyrgyzstan have developed some hydropower facilities, but the Johannesburg summit ended up leaving hydropower outside the category of renewable energy. [For more information, see the Eurasia Insight archives.] This semantic distinction hints at how remote an accord that could meaningfully include Central Asia remains. The call by the European Union to form a global coalition of "like-minded countries and regions" for solar and wind energy could motivate new alliances between Europe and countries without mature oil industries. It is undeniable, though, that Central Asia's poor citizens need more than renewable energy. Presidents in the region can cite their vast energy resources as pools of short-term growth. While they do, though, they risk contracting the so-called "Dutch disease," in which a country sinks its capital into a single resource at the expense of other sectors. As with the challenge of fighting poverty, each Central Asian economy must wring what economic benefit they can from their current system while steadily and visibly establishing a multifaceted, transparent and sustainable one to replace it. The complexity of that task makes it likely that globalization, the process by which companies bring jobs and growth to foreign countries, will be part of any broad economic advance. Many analysts say that the summit's procedures and lack of ultimate unity reflects the clash of different paradigms of globalization. Interventionist representatives like the Europeans tussled with Americans, who often view globalization as an alternative to certain forms of regulation. Both the share and role of Central Asia in this process have yet to be defined. Globalization does not spell the end of geography and ethnicity yet, and Central Asian republics will need to respect ethnic and historic interests in order to build stability. Yet the globalization of terrorism makes Central Asian presidents fearful rather than hopeful, and articulates international relations in terms of security. The summit offered no formula for reconciling security with sustainability and democracy. The need for more thought and debate on that crucial challenge will undoubtedly give Central Asia a more prominent voice in future summits.

From http://www.eurasianet.org/ 09/06/2002

ASEAN States Go Ahead with Liberalization Plan

The Association of Southeast Asian Nations (ASEAN) countries concluded on Friday the eighth transportation ministers annual meeting here, vowing to liberalize the movement of people and goods within the region. At the end of the two-day meeting, the ministers produced a memorandum of understanding (MOU) on air freight services, which has been hailed as the first step toward the full liberalization of air freight services in the ASEAN region. Indonesian Minister of Transportation Agum Gumelar said that the MOU allowed the designated airlines of each ASEAN member country to operate all cargo services up to 100 tons weekly with no limitations on frequency and aircraft types. "The results of the meeting will ensure and accelerate the mobility of people and goods within ASEAN countries, which could later boost trade, investment and tourism in the region," Agum told a press conference here. Also attending the press conference were ministers from other ASEAN countries, including Ling Liong Sik from Malaysia, Hla Myint Swe from Myanmar, Zakaria Sulaiman from Brunei Darussalam and Yeo Cheow Tong from Singapore. In their two-day meeting here, the ministers also agreed to simplify procedures on the movement of dangerous goods within the ASEAN member countries. Meanwhile, an official at the Ministry of Transportation acknowledged that in the past, procedures and requirements for the movement of dangerous goods within ASEAN were complicated, inhibiting the movement of such goods. An example of goods categorized as dangerous are explosives. So for the sake of accelerating the establishment of a free trade area, the procedures must be simplified, said Kalalo Nugroho, head of law and international cooperation at the ministry. "It includes the scrapping of unnecessary documents," said Kalalo said. However, the agreement could not be immediately implemented as the ASEAN countries still need time to draft new regulations before the agreement takes effect. The theme of this year's transportation ministers meeting focused on facilitating an Asian Free Trade Area (AFTA) within the region. AFTA was launched in January this year, with ASEAN founding nations like Malaysia, Indonesia, Brunei Darussalam, the Philippines, Singapore and Thailand lowering their tariffs on a wide range of products traded among them to below 3 percent. This year's meeting was also the first meeting between ASEAN and China's transportation ministers. China was represented by its minister of communications, Huang Zhendong. The involvement of China in this year's ASEAN transport ministerial meeting was a follow-up of the ASEAN and China Summit in Brunei in November 2001. In the summit, ASEAN and China agreed to set up a free trade area within 10 years, which could give birth to a market of 1.8 billion consumers and create the largest free trade block in the world. (by A'an Suryana)

From http://www.thejakartapost.com/ 09/21/2002

Eurasian Economic Community Premiers Fail to Agree on Joint Customs, Tax Policies

At a meeting in Astana on 20 September, the prime ministers of Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan failed to reach any agreement on the introduction of a single import tariff and other measures aimed at speeding up economic integration between their countries, RFE/RL's Kazakh and Kyrgyz services and Interfax reported. Tajik Premier Oqil Oqilov expressed his disappointment at the stalemate, arguing the "urgent need" for a transportation union among the five states. Russian Prime Minister Mikhail Kasyanov suggested that using Russian rubles rather than hard currency in trade between the five countries would accelerate economic integration, Interfax and akipress.org reported.

From http://www.rferl.org/ 09/23/2002

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Uighur Group Added to U.S. List of Terrorist Organizations

The East Turkestan Islamic Movement, or ETIM, has become the first branch of the Uighur separatist group to be added to the U.S. list of terrorist organizations. U.S. Deputy Secretary of State Richard Armitage publicly announced the decision during a trip to the Chinese capital, Beijing. "After careful study, we judged that [ETIM] was a terrorist group and that it committed acts of violence against unarmed civilians, without any regard for who was hurt," Armitage said. U.S. Embassy officials in Beijing, commenting on the decision, said that the Xinjiang-based group had been planning attacks against U.S. interests abroad, including the U.S. Embassy in Kyrgyzstan. An article published on 29 August in the U.S. newspaper "The Washington Post," reporting on the ETIM allegations, cited Kyrgyz Foreign Minister Askar Aitmatov as saying there was reason to believe the Bishkek embassy had in fact been targeted, but he gave no details. The U.S. decision came as a surprise for many Uighurs and international observers. Adding the little-known group to the U.S. terrorist list, they say, may have a negative impact on other Muslim Uighurs living in China's western Xinjiang province. Uighurs, who, according to the most recent Chinese census, number some 7.2 million people, have been fighting for independent statehood since 1759, when China invaded the Uighur Kingdom of Eastern Turkestan, which they later (1876) renamed Xinjiang, meaning "new territory." The largest Uighur revolt was brutally suppressed by Chinese communists in 1945. But various Uighur organizations in Xinjiang and abroad have continued their struggle for independence -- a struggle the Chinese government has tried to characterize as terrorist-based and a threat to international security. But Enver Can, president of the Munich-based East Turkestan National Congress, said Uighurs have never been religious extremists. Moreover, he said there are dozens of various Uighur organizations around the world, but that ETIM is virtually unknown. He questioned whether ETIM is even large enough to warrant classification as an independent Uighur group. "They are a small group of people who first fled to Central Asia, to neighboring Central Asian republics. After [governments there] began to deport some Uighurs back to China, the others who remained crossed to Pakistan and Afghanistan. There they received shelter and for different reasons, to settle their lives, they joined one group or another in Afghanistan," Can said. Can, like many of his fellow Uighurs, fears the U.S. decision to include ETIM on its list of terrorist organizations will prompt the Chinese government to step up its crackdown on Uighurs, suppressing their efforts at a national and cultural revival in the name of fighting terrorism. "Putting an almost nonexistent Uighur organization on a list of foreign terrorist organizations would mean for China that it has received a green light. Because, since 11 September, despite warnings by President [George W.] Bush and [United Nations Human Rights Commissioner] Mary Robinson, and despite the appeals of international human rights organizations not to misuse the international struggle [against] terrorism to crack down on Uighurs, China has been stepping up its military presence in East Turkestan [Xinjiang]. [They are] intimidating people; arresting, detaining, and sentencing thousands of Uiyghurs; and censoring very much religious freedom, burning books. All this means that China will do everything possible [to crack down on Uighurs] if it sees tolerance [for its actions] from the West," Can said. The U.S. decision on ETIM has caused serious concerns among international human rights organizations. Maya Catsanis, Amnesty International's press officer for the Asia-Pacific region, agrees that the inclusion of a nonrepresentative Uighur group like ETIM on the U.S. terrorist list may cause the already difficult plight of many Uighurs to deteriorate further. She told RFE/RL the Chinese government had already begun to use the international war on terrorism to justify its repression of Uighurs. Catsanis described how the situation of Xinjiang Uighurs has changed over the past year. "It certainly has gotten worse since 11 September. There are estimates that around 3,000 people were detained between 11 September and the end of the year. Scores of people, at least, have been sentenced to long prison terms for so-called separatist offenses. There have been several executions, although information about these executions is very difficult to obtain because the Chinese government is no longer publishing who was executed and when," Catsanis said. Catsanis said the U.S. government should be very careful not to let its own antiterrorism campaign give free rein to governments like China's to pursue their own campaigns against Uighurs and other groups looking for independence or the right to preserve their national and religious identity. "We certainly hope that the U.S. government will be vigilant in who it decides is a terrorist group and what is not a terrorist group. For the Chinese government, it is a bit of a coup, the labeling of this particular group. We would ask the U.S. government to be very, very, very careful on the information they receive about who is a terrorist and what it then does with that information. Because if it does proceed to ban other groups which are not terrorist, and indeed just people expressing their peaceful wish to secede, for example, from China, then it could signal a green light for the Chinese government to go ahead and increase its repression," Catsanis said. Uighur activists and human rights defenders express deep concern that unless the U.S. makes a clear distinction between ETIM and the broader Uighur nationalist movement, the Chinese government will step up its propaganda against so-called Uighur terrorism worldwide and increase its use of violence to crack down on any kind of dissent among Uighurs in its Xinjiang province. (by Zamira Eshanova/Bruce Pannier)

From http://www.eurasianet.org/ 09/01/2002

China: More Efficiency Urged for Money Policy

China should try to improve the efficiency of its monetary policy to maintain long-term economic growth of 6 to 8 per cent. Because the country's capital market is not mature, financial institutions play a major role in the movement of capital. But monetary policy is not very efficient and the implementation of the policy faces many barriers. As a result, the central People's Bank of China should try to improve the method of basic money supply. The central bank increases the basic money supply mainly through four channels: relending, foreign-exchange trading, rediscounting, and trading treasury bonds. Relending is an important channel to increase the basic money supply, although its importance has decreased because the foreign-exchange trading has expanded rapidly in recent years. But to optimize the structure of the finance industry and economic development, the central bank should focus on rediscounting and the trading of treasury bonds to increase the basic money supply. In recent years, foreign-exchange settlement has become another important channel for increasing the basic money supply. However, too much foreign reserves means more investment capital lying idle. The central bank should take full advantage of rediscounting to increase the basic money supply. Given the large amount of product stock, the imbalance between supply and demand, and the relatively high unemployment rate, the central bank should drop the ratio of banks' reserve deposits. The ratio should be dropped to 4 per cent from the present 6 per cent to expand the loan capacity of banks and the credit co-operatives. The fact that not enough commercial bank loans can be issued suggests that the central bank's policy to expand the basic money supply has met barriers. The government should rectify the credit situation and improve the ownership of banks and credit co-operatives to make monetary policy more efficient. The demand for basic money supply will surely keep on expanding in the coming years. LI ENQIANG, a senior researcher with the Macroeconomic Research Institute under the State Development Planning Commission.

From http://www1.chinadaily.com.cn/ 09/02/2002

Stock Fund Law Expected

The draft law on stock investment funds underwent a preliminary reading by the Standing Committee of the Ninth National People's Congress last week. The legal framework is crucial to the healthy development of the country's fledging fund industry, which is anticipating accelerated growth. After 10 years, there are 59 investment funds so far with 100 billion yuan (US$12 billion) of assets, accounting for 7 per cent of the country's capitalization of the domestic stock market. As large institutional investors, the funds are believed to play an important role in stabilizing the stock market - it has often been hit by sharp fluctuations. They are expected to create more investment alternatives for Chinese individuals who have deposited most of their funds in banks for a small interest return. But problems and even scandals have emerged in the fledging industry, including unstandardized operations and imperfect internal management. And some funds are engaged in short-term speculation of too many stocks, showing no sign of being responsible. They have hurt investors' confidence. The primary law for the fund industry will rebuild individual investors' confidence as it pays special attention to the protection of investors. The draft law demands that investment companies make a timely disclosure of information on major issues, including investment structure. The legislation will not only benefit domestic investors, but also provide legal foundations for foreigners as the country now allows them to set up joint venture fund management companies. The law still needs time, but as it has entered the legislation procedure, it is not expected to take too long. The sooner the better.

From http://www1.chinadaily.com.cn/ 09/02/2002

China Tightens Rules on Land Use

The Chinese Ministry of Supervision and the Ministry of Land and Resources issued a joint circular on Sep.2 as part of their fight against corruption involving the transfer of land-use rights. The circular says that all transactions on land-use rights for profit, such as tourism, recreation and real-estate development, should be carried out through a public listing, bidding or auction. "The practice is compulsory when more than two parties express an interest for the land-use right," says the circular. Information on the land in question should be published early enough so that as many potentially interested parties as possible can compete fairly. The base price should be kept secret for the sake of fair competition. "Government officials found having improperly disclosed the base price should be subject to administrative or criminal punishment," the circular says. A national inspection is due at the end of this year on the implementation of the circular.

From http://ce.cei.gov.cn/ 09/03/2002

Water Law Streamlines Management

Under China's newly revised water law, the country's vital water resources will be brought under integrated administration and management, it was announced at a press conference yesterday in Beijing. The revised law, strategically important in the quest for sustainable development, becomes effective on October 1. Water authorities throughout China will control water supplies, the construction of key water projects, and resource distribution and planning to optimize regional water resources, control pollution and create a water-saving society, a leading water official said at the press conference. The law was revised about a month ago by the 29th session of the Standing Committee of the Ninth National People's Congress, China's top legislature. Jing Zhengshu, vice-minister of water resources, made it clear at the press conference that, as of October 1, water authorities will be the "only dragon" - that is, the only boss -as far as the administration of water resources and water-related affairs is concerned. Urban citizens may also have to pay much more for the water they use because the new law allows advanced water pricing if users exceed their water quotas. Those causing water pollution or building projects in flood discharging channels will be either forced to improve the resources or remove such buildings as well as pay heavy fines of up to 100,000 yuan (US$12,048).

From http://www1.chinadaily.com.cn/ 09/06

Rules on Foreign Investment in Listed Companies Drafted

Sources from the state department said the authorities have drafted rules on foreign capital of buying stakes in domestically listed companies. The rules will be issued at an appropriate time. It is said the rules touch various aspects with strong maneuverability, including profitability computation of foreign companies at the time they acquired domestically listed companies and the ratio of foreign stake in sensitive departments. The rules are in fact a supplementary and improvement of previously issued rules by The Ministry of Foreign Trade and Economic Cooperation and The China Securities Regulatory Commission.

From http://ce.cei.gov.cn/f 09/11/2002

China to Popularize Mandarin by 2010

China will ensure that mandarin, the officially-endorsed standard Chinese spoken language also known as "putonghua" (the common speech), is commonly used throughout the country by 2010. By the middle of this century, China would fully popularize the spoken language, said Yang Guang, a senior official with the Ministry of Education, here Thursday. Since 1998, China has set the third week of September each year as the one to popularize mandarin, in an effort to standardize its official spoken language. During the event from September 15 to 21, China will stage advertisements, television programs, contests and art performances to promote the language. A survey by the China Remin University has showed that the popularization rate of mandarin is about 80 percent in urban China, as more than 90 percent of urban residents are willing to use mandarin. But that popularization rate is rather low in the remote areas and the places where minority groups live, according to the survey. Within two or three years, China's business hub of Shanghai will require its civil servants to hold a putonghua proficiency certificate, so as to remain in the civil service. China has thousands of different dialects in use among its 1.3 billion people. Mandarin, which is based mostly on the principal dialect spoken in and around Beijing, takes great efforts for people in southern China to master.

From http://english.peopledaily.com.cn/ 09/13/2002

Jiang Urges Focus on Re-Employment Efforts

Government departments must focus on several priorities in dealing with re-employment, Chinese President Jiang Zemin told a conference in Beijing on Thursday aimed at helping laid-off workers get jobs. The governments at various levels should work hard to develop economy, which would bring more job opportunities for laborers, said Jiang. In return, more employment would promote economic prosperity. Meanwhile, the country should attach importance to the development of labor-intensive industries while supporting the growth of hi-tech sectors. The governments should also back small and medium-sized companies, which are able to absorb more employees, he said. Enterprises dismissing redundant workers should create more job opportunities for them instead of throwing them out of society. Favorable policies and guidance should be given to surplus laborers in villages. Government departments must offer equal treatment, proper supervision and a sound service for the farmers who go to towns and cities for new jobs, Jiang said. Moreover, adequate measures should be taken to improve the social welfare system, which guaranteed the success of social reforms and re-employment efforts. Jiang said that the governments should increase financial support to help laid-off workers become employed again. It was a long-term work requiring patience, overall strategy and extensive cooperation to attain final success. All government leaders were required to devote their energy to the long-term strategic task, Jiang said. Workers laid off from state-owned enterprises had contributed to nation building and solving their job problems should be the most important task of the entire employment focus, Jiang stressed at the conference. He said it was "an unshirkable responsibility of all levels of the CPC, the government and the whole of society" to solve the re-employment problem for these workers well. Employment in China would remain an important issue over a long period owing to the gap between work opportunities and an oversupply of labour and the quality of some workers, Jiang pointed out. He said China faced a variety of employment problems, including job pressure in urban areas and surplus rural labor force moving to the towns. The crux of all these problems was the re-employment of laid-off workers, which had become a major issue with bearing on China's overall economic and social situation. The conference was convened by the CPC Central Committee and the State Council. Other top-ranking leaders Zhu Rongji, Li Ruihuan, Hu Jintao, Wei Jianxing and Li Lanqing, all members of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China (CPC), also attended the conference.

From http://english.peopledaily.com.cn/ 09/13/2002

China OKs Generic Anti - AIDS Drug

SHANGHAI, China (AP) -- A Chinese pharmaceutical company said Monday it has received permission from regulators in Beijing to make a generic copy of a powerful anti-AIDS drug patented in China by a U.S. company. Desano Shanghai will be allowed to make a low-cost version of dd1, a widely used drug that slows the effects of AIDS, said Li Jinliang, the company's deputy manager. Bristol-Myers Squibb holds a patent in China for dd1. A spokesman for the New York-based pharmaceutical company said it only covers the drug in tablet form. He said Desano Shanghai's generic version is exempt because it is a powder. ``They are free to make this,'' Bristol-Myers Squibb spokesman Robert Laverty said by telephone from New Jersey. Drug-patent lawyers, however, said the approval may be part of Chinese efforts to pressure foreign drug companies to lower their prices. They said Beijing has in the past allowed domestic production as a way of forcing foreign companies to the bargaining table. ``Many of these cases have been threats to foreign pharmaceutical companies,'' said Gary Gao, a lawyer at Duan and Duan Law Firm in Shanghai who has handled drug-patent cases. Li, of Desano Shanghai, refused to say how his company got permission. An official at the State Drug Administration who refused to give his name confirmed that it had given Desano Shanghai approval for generic production. Li said Desano Shanghai expects to get permission to produce two more anti-AIDS drugs, but wouldn't say which. Those approvals would allow it to make a generic version of the ``cocktail'' treatments -- groups of drugs given in rotating succession -- that have helped AIDS patients in the West. He said the Chinese-made cocktail would sell for about $600 per year. The cost in the United States is about $10,000 per year. China says it has more than 1 million people with AIDS, and Health Ministry officials said this month that the number could reach 10 million by the end of the decade if more action isn't taken. Last month, a Chinese manufacturer announced it will begin producing a low-cost, generic version of the AIDS drug AZT. AZT, originally made by Britain's GlaxoSmithKline, differs from dd1 because its Chinese patent has already expired.

From http://www.nytimes.com/ 09/16/2002

Experts Urge Changes to Corporate Law

An urgent revision of China's corporate law in accordance with international rules is needed to maintain the country's economic progress, legal experts say. "Without an effective corporate law, foreign capital as well as domestic capital will flow to other countries with the fastening international capital movement," said Liu Junhai, a legal researcher at the Chinese Academy of Social Sciences, during the 21st Century Commercial Law Forum, hosted by Tsinghua University at the weekend. Scholars from more than 10 countries and regions participated in the event, entitled "Corporate Law Reform Under Global Economic Competition." "Under the current corporate law there are too many limitations on investment, especially foreign acquisition in China, which has hindered the country's further attraction of foreign investment," Liu said. He said in principle, a ratification process concerning corporate activities should be replaced with a registration system, making it easier for investors and corporate managers to adjust their strategies. Wang Baoshu, a professor of law at Tsinghua University, said the legal threshold to establish a corporation is too high. While increasing the autonomy of corporate management, the revision of corporate law should also stress transparency of information to avoid corporate scandals.

From http://www1.chinadaily.com.cn/ 09/16/2002

China Implements New Copyright Law

Regulations aimed at strengthening the enforcement of an existing law on copyright protection have just come into effect in China. Under the law, anyone who has published works or produced audio and video programs on the Chinese territory has the right to apply for protection with the government administration. For people who use other people's works, they must make payments to copyright holders within two months, and anyone who infringes another person's copyright will be fined no more than three times their illegally-obtained business turnover.

From http://ce.cei.gov.cn/ 09/18/2002

Laws Revised to Meet Promises

As a key part of China's commitments to the World Trade Organization (WTO), China will rectify its legal system step by step to guarantee WTO rules are implemented effectively. In November 1999, the State Council began the clear-up of domestic laws, administrative regulations and policies that were at odds with WTO requirements. Since then, the National People's Congress (NPC), China's top legislative body, has revised 13 WTO-related laws. Similarly, some 37 administrative regulations were enacted or modified by the State Council during this period, and 12 were annulled. The number of newly created, amended and abrogated ministerial provisions was more than 1,000. At the end of last year, the Supreme People's Court also published a list of outdated judicial interpretations that were rendered redundant following China's WTO accession. It also produced new interpretations on the hearing of cases related to foreign trade. Moreover, local legislative bodies and governments have been required to abandon or modify their local regulations and policies that are against WTO requirements of non-discrimination and transparency. The change in China's legal rules is mainly concerned with trade, services, intellectual property rights and foreign investment. In a move to promote China's foreign trade following WTO accession, the State Council enacted the Regulations on the Import and Export of Goods, which took effect this year. The new rule scrapped some previous non-tariff measures like quotas and licences. The list of goods that are still under government control is required to be made public. The Law on Inspection of Import and Export Commodities was also amended by the NPC in late April. The amendments slap higher health and environment standards on imported and exported goods, and order inspectors to protect trade secrets. With regard to market access to services, China has promised to open more than 100 service sectors to foreigners, which far exceeds the promise of most developing economies to open between 1 and 20 service sectors. China has enacted and adjusted a series of service-related legal rules to ensure foreign investors in these service sectors can enjoy equal treatment. For example, the State Council last year made an all-round modification of the Regulations on the Administration of Foreign-funded Financial Institutions, which was created in 1994. In a bid to meet the standard of WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), China has amended some key rules on intellectual property this year, including the Law on Copyrights, the Law on Trademarks and the Law on Patents. The new copyright law underlined that computer software and the lease of films were independfent items of property subject to protection by law. The patent law stipulates that patent owners can go to the court if they are not satisfied with decisions made by the Patent Examination Commission on their patents. The trademark law provided special protection for renowned brands. All the three laws have intensified the punishment of activities that infringe on intellectual property rights, such as piracy. In accordance with the Agreement on Trade-Related Investment Measures (TRIMs), China amended three laws concerning foreign investment this year: the Law on Chinese and Foreign Equity Joint Ventures, the Law on Chinese and Foreign Contractual Co-operative Enterprises, and the Law of Foreign-Capital Enterprises. The three revised laws abandoned rules which hampered free trade such as requiring foreign investors to buy raw materials from China as far as possible, and having all or most of their products exported. The amendments also stipulated that partners of Sino-foreign contractual co-operative companies can choose to solve their disputes with either Chinese or international arbitration tribunals. The old law forbade seeking arbitration outside China. The revised investment-related laws are widely appreciated by investors from other WTO member economies which now enjoy a better legal environment when making money in China. In order to remedy unfair trade measures further, China has created new anti-dumping provisions and anti-subsidy provisions, which are in line with WTO procedures and are practical. China will continue to perfect the domestic legal environment to guarantee its promises to the WTO will be honoured. Currently, the nation is gearing up to finish making or revising certain rules including the Law on Insurance, the Provisions on Import and Export Tariffs and the Provision on the Protection of Intellectual Property Rights in Customs. It is noticeable that China has enacted special provisions on the record of local and ministerial regulations. The provisions require all ministries and local law-making bodies to submit their rules to designated recording agencies for examination. Any individuals and organizations can file written motions with the State Council to review local or ministerial rules that they think are at odds with the law. Such a supervision mechanism guarantees that disparities between China's legal rules and its promises to the WTO can be addressed in time.

From http://www1.chinadaily.com.cn/ 09/19/2002

Regulation Issued for Cultural Preservation

The Chinese capital of Beijing has designed a comprehensive plan for the preservation of historical sites and cultural relics dating back to several ancient dynasties. "The Protection Layout for Beijing as a Noted Historical and Cultural City" was issued recently as a joint effort by the Beijing municipal government, experts and scholars in various fields. The Protection Layout of Beijing, one of the country's six ancient capitals along with Xi'an, Nanjing, Luoyang, Kaifeng, and Hangzhou, is the most important cultural preservation document in the city's history. To preserve the city as a whole, the layout gives detailed requirements on 10 aspects, including the ancient city water system, the traditional city axis, the prestigious imperial palace, the world-famous "Hutong" or alleys, and ancient trees. Forty historical and cultural sites were selected and sorted out for special protection. They cover a total area of 2,617 hectares (6,467 acres), or 42 percent of the ancient city's main area. The 6.8-sq-km Forbidden City, the imperial residence of emperors during the Ming and Qing dynasties (1368--1911 AD), will be the main focus of the preservation plan. The municipal government of Beijing hopes to have the Forbidden City listed on the United Nations World Cultural Heritage after giving it a thorough facelift. The layout also focuses on the protection of rivers and lakes in and around Beijing municipality and on restoring them to their ancient magnificence. These rivers and lakes are deeply entwined in the city's evolution, according to experts. The layout also sets ceilings on the height of buildings to be built or rebuilt in the old city area, requiring a traditional cyan-and-gray color and sloping-roofs for all types of architecture. Moreover, the names of traditional streets and alleys will be protected and must not be changed arbitrarily, the layout added.

From Xinhua News Agency 09/21/2002

Hong Kong: Exco Briefing on Subversion Law

Secretary for Security Regina Ip will today brief members of the Executive Council on the consultation paper on Hong Kong's proposed ``subversion law''. The proposals, drafted in accordance with Article 23 of the Basic Law, are expected to be released for public consultation next month. Sources say the draft is ``less scary'' than some media reports have suggested over the past week, and changes can be made after the government collects views from the public. Reports have said the consultation paper will include proposals that could make expression of opinions an offence under the new law. But it's understood the SAR has managed to persuade the Central Government to allow Hong Kong to enact a subversion law based on ``lenient'' principles. Business tycoon Li Ka-shing, a former Basic Law drafter, last night came out in support of the government's move to enact the law. ``The SAR government has been set up for five years. Now is a proper time to enact laws under the Basic Law,'' he said at a Hong Kong Chiu Chow Chamber of Commerce function. ``I believe the legislation will not affect Hong Kong's investment environment. ''Article 23 of the Basic Law stipulates ``the Hong Kong SAR shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People's Government, or theft of state secrets, to prohibit foreign political organisations or bodies from conducting political activities in the region.'' It also prohibits local political bodies from establishing ties with foreign political bodies. The Frontier, however, has urged the government not to enact subversion laws and has even urged it delete the whole of Article 23 by seeking an amendment to the Basic Law. After meeting Secretary for Justice Elsie Leung about the legislation, Frontier legislator Cyd Ho said the party had asked Leung to clarify to the public the methodology of the consultative exercise and to provide an option in the consultation paper of not enacting the laws. ``The government should lay down the rules of the game when it starts the consultation exercise,'' she said. ``Whether it counts the quality or the quantity more, the government should make it clear, because in the past it is so used to distorting the consultation result to make it in favour of the government line. ''Ho said enacting laws should also be made a dispensable option in the consultation paper, saying she did not want to see people criminalised because of their words. ``Apart from that, I really hope the government won't repeat what happened on the anti-terrorism legislation which can criminalise people who have affiliation with terrorists or fail to report on terrorist activities,'' she said. In the end, the Frontier would like to see the Article 23 deleted from the Basic Law, Ho said.

From http://www.thestandard.com.hk/ 09/25/2002

Regulations on Anti Money Laundering to Be Promulgated

The People's Bank of China, the nation's central bank, is preparing the Regulations on Anti Money Laundering in Financial Institutions, according to the bank's Governor Dai Xianglong. Dai made the remarks during an anti money laundering conference, recently held in Beijing. "Relevant regulations concerning the administration of payment dealings reports, temporary regulations of suspicious forex, and large-scale capital in financial institutions will be established to improve the laws governing anti money laundering," he said. It's the first time that China's banks have held such a conference to discuss these issues. An analysis and supervision system of financial dealings and information communication mechanism will be established, in order to crack down on financial crimes such as money laundering. To date, the main focus of the institution has been to standardize account administration, strengthen forex management, and crack down on illegal banks. During the conference banks were urged to administer financial regulations such as the Regulations on the Real Name System for Personal Bank Accounts, and strengthen training on anti money laundering. In addition, international cooperation to crack down on money laundering and the financing of terrorist activities was also emphasized. China has so far promulgated a series of regulations to standardize financial dealings. The regulations, which have already been established by the People's Bank of China and State Administration of Foreign Exchange, include Measures on Account Administration, Measures on Domestic Forex Account Administration, the Circulation on the Administration of Large-scale Cash Payment, and Measures on Recordation of Large-scaled Cash Payments. Currently, the real name system for personal bank account is already being carried out. Commercial banks, on the other hand, have introduced their own regulations on anti money laundering. Mr. Dai pointed out that, "Commercial banks should prevent these financial crimes by improving and implementing the financial dealings system in strict accordance with the regulations, joining hands with the justice department to crack down on illegal money laundering." As a financial supervision institution, the People's Bank of China will monitor the implementation of the financial dealings system, maintain depositors' rights, and assist other departments to crack down on financial crimes. As early as September last year, the People's Bank of China set up a leading team on anti money laundering, to monitor such issues in China's banking industry. In July this year, a special institution was set up to supervise suspicious large-scale payments and financial dealings. Some commercial banks also established relevant departments to monitor anti money laundering through their own institutions.

From http://www.china.org.cn/ 02/25/2002

Premier Urges Attention to Detail in National Tax System

Strengthening the taxation levy and its management is an urgent task for local governments to increase revenue and push for sustainable and sound economic development, Premier Zhu Rongji stressed yesterday. Zhu also urged the need to cut down on unnecessary expenses and the duplication of similar projects. The moves are essential if the central government is to keep below its planned budget deficit this year, which stands at 308.9 billion yuan (US$37 billion), 50 billion yuan (US$6 billion) higher than last year's deficit. Zhu made the comments at a Beijing-based national conference on increasing revenue and cutting government expenditure. Levies on value-added tax, consumption tax, business tax, corporate tax and personal income tax are listed by Zhu as the main targets of the belt tightening. He said strict accounting and invoice management systems are required to be conducted by private companies. Tax evasion was a serious problem in recent years in some private and foreign-invested companies as well as State-owned enterprises in some key industries. Facing such a situation, Zhu urged the improvement of the taxation system and the strengthening of the relevant subsidiary systems, such as preferential policies on taxation for imported commodities. Meanwhile, Zhu said the duplication of similar projects in electrolytic aluminium, alloy iron and glass industries should be put to an end. He said small-sized coal mines and factories making steel, glass, paper and cement will continue to be closed and readjusted according to law. It is forbidden to use State funds to build city malls, administrative offices, training centres and interior high-grade entertainment facilities. Vice-Premier Li Lanqing said the public security, justice, auditing, banking, foreign trade departments and others should co-operate with the finance, taxation and customs authorities to achieve the goal of increasing revenue and reducing administrative costs. Zhu said despite the slow increase in revenue and fast rise in expenditure this year, China's economy has maintained a sound growth momentum amid a global slowdown. He said this year's overall economic situation is better than anticipated with remarkable achievements in some fields, establishing the solid economic base.

From http://www1.chinadaily.com.cn/ 09/17/2002

Japanese Gov't to Clarify Terminology in War Bills

TOKYO - The government has decided to clarify its definition of "a military attack" in planned war contingency bills amid criticism the envisioned legislation is ambiguous, government sources said Sunday. The sources said the definition of "a situation when a military attack is predicted" and "in a case of a potential danger of a military attack" in the bills will be clarified to respond to criticism from opposition parties and even some lawmakers in the ruling parties.

From http://www.japantoday.com/ 09/01/2002

Current Monetary Policy to Remain as It Is

NAGOYA (Kyodo) BOJ Gov. Masaru Hayami told a news conference here Friday that monetary conditions have eased sufficiently and he sees no need to inject additional liquidity into the banking system. "There is no need to increase fund provisions any further," Hayami said, commenting on the advisability of providing additional credit easing measures in response to stock market plunges. The central bank chief said Japanese banks are unlikely to be thrown into crisis even with the domestic stock market falling to recent lows. "The BOJ will maintain its bold, easy policy and continue to provide support on the monetary front to ensure an economic recovery will be firmly in place," Hayami told a meeting of local business leaders in Nagoya earlier in the day. However, he stopped short of saying if he thought additional measures were needed. The Japanese economy has almost stopped deteriorating, mostly thanks to an economic recovery abroad that began in early spring, he said, adding that domestic demand nevertheless remains weak. "Given that adjustment pressures from excess labor and excess liabilities are still strong, it will take more time for the Japanese economy to achieve a self-sustaining recovery," he said. But there are growing uncertainties over the world economy, he said, singling out the U.S. economy and its effect on the financial and capital markets in Japan and abroad. Largely reiterating comments made in a speech a day earlier in Osaka, Hayami said Japanese banks risk acquiring fresh nonperforming loans, given recent economic developments and ongoing economic structural reforms. "I think risks for banks of acquiring new bad loans are not small for the time being due to recent economic developments, structural changes and intensifying competition among corporations," he said.

From http://www.japantimes.co.jp/ 09/07/2002

Gov't Drafts Public Protection Bill for Emergencies

TOKYO - The government has drawn up draft legislation on protecting the public in planned war contingency bills to be discussed in an extra Diet session expected to start in mid-October, sources close to the case said Sunday. The public protection bill will contain 200 provisions including one stipulating local governments must develop plans to evacuate and rescue residents in case of foreign military attack, according to the sources. The government intends to put the bill's framework to the upcoming Diet, they said. The bill will also include compensation measures by the central government for damage caused by use of supplies and land provided by municipalities in war contingencies and says the central government will pay for public protection. The Cabinet Secretariat has been hearing the opinions of government ministries and agencies on the legislation. In early August, it ordered them to discuss basic ideas and draft bills for public protection in reference to the Disaster Prevention Basic Law. The bill will include the issuance of warnings in war situations, information-gathering and coordination involving multiple prefectures as the role of the state. In April, the government submitted to the Diet a set of bills to govern Japan's response to a foreign attack. The bills will allow the prime minister to instruct governors or mayors and make executive orders in their place in the event of a military emergency. Support for quick enactment, though, has fallen as some ruling coalition lawmakers claim too much of the emergency-measures bills remain vague, such as the definition of a military attack, or how people's rights can be legally limited in such attacks in light of Japan's war-renouncing Constitution. They have also criticized the set of three bills for failing to define how to evacuate people in the event of an attack.

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

Terror Law May Get Sharp Teeth

The government eyes new anti-terror legislation that could see Japanese troops in Afghanistan. Japanese troops, in addition to other support activities, could find themselves on the ground in Afghanistan under new legislation being considered, government sources said Monday. The basic plan for Self-Defense Forces activities under the current anti-terrorism law allows rear-area support for U.S. Afghan operations, but it expires in November. Some sort of new legislation is needed, especially if the United States undertakes its threatened military-backed ``regime change'' in Iraq. Citing a recent heightening of tension, including last week's attempt to kill Afghan President Harmid Karzai and the July 6 assassination of Afghan Vice President Abdul Qadir, the sources said Japanese Self-Defense Forces could be needed to fill the void if Washington redeploys its troops from Afghanistan to Iraq. Any attempt by the government to put SDF boots on the ground in Afghanistan would be generally controversial, and specifically run afoul of Japan's five-point peacekeeping principle, which requires a cease-fire agreement be in place, a condition not met in famously unstable Afghanistan. Tokyo believes the Karzai administration, established only in December, and the nascent democratization process could easily deteriorate if more terrorist attacks take place. If U.S. troops-now in Afghanistan as part of International Security Assistance Force (ISAF)-are redeployed, SDF members and other assistance would be required to augment international units to maintain stability in the country, Tokyo believes. Initially, the government thought the current anti-terrorism special measures law would suffice. Enacted last November, it allows the SDF to provide logistics support for U.S.-led operations against terror following the Sept. 11 attacks on the United States. Refueling U.S. Navy vessels at sea is one such measure. Indeed, Gen Nakatani, director-general of the Defense Agency, took this tack when he met U.S. Deputy Secretary of State Richard Armitage in Tokyo last month, saying, ``There is a high possibility of Tokyo cooperating if it is along the lines of the anti-terrorism law.'' However, the law covers only Tokyo's response to the Sept. 11 attacks, and officials decided a new law would be required for Japanese troops to be further involved-such as airlifting supplies to the landlocked nation. Ultimately, officials came to the conclusion it would be futile to try and stretch legal interpretations to allow a review of the basic plan to allow an SDF deployment this time around.

From http://www.asahi.com/ 09/10/2002

Gov't Froze 347 Terrorist-Related Financial Transactions

The government in the last 12 months froze 347 financial transactions of terrorist-related organizations, mostly those connected to the Taliban, officials said Wednesday. Tokyo has stepped up efforts to freeze terrorists' financial transactions as the international community has taken concerted efforts to deprive terrorists of funds since the terrorist attacks on the United States on Sept. 11 last year. Specifically, the government banned financial institutions from remitting money to accounts held by individual terrorists and organizations connected to them, in addition to banning contracts on deposits, fund trusts and loans with terrorists and their affiliated organizations. Of the 347 transactions, 322 were connected to the Taliban, former rulers of Afghanistan, while 25 transactions were linked to other terrorist organizations. In accordance with the U.N. sanctions against the Taliban, the government banned all transactions with organizations connected to the group. However, it later lifted the freeze on 13 transactions, including those with Afghanistan's central bank and Afghan government-affiliated financial institutions.

From http://mdn.mainichi.co.jp/ 09/11/2002

Public Safety Bill Added to Attack-Response Plan

The government has drafted legislation for protecting the public in the event of an attack that will be attached to war contingency bills to be discussed in an extra Diet session expected to start in mid-October, sources said. The public protection bill is expected to contain some 200 provisions, including one stipulating that local governments must develop plans to evacuate and rescue residents in the event of an armed attack on Japan, according to the sources. The government intends to submit the package to the upcoming Diet session, they said. The protection bill would also include compensation measures by the central government for damage caused by equipment used to defend against attack and for land appropriated from residents and municipalities in such emergencies. It says the central government would pay to safeguard the public when prefectural and municipal governments take measures to comply with the legislation. The Cabinet Secretariat has been hearing the opinions of government ministries and agencies on the legislation. In early August, it ordered them to discuss basic ideas and draft bills for public protection, using the Disaster Prevention Basic Law as a point of reference. The bill would also include the issuance of attack warnings, information-gathering and coordination involving many prefectures serving the function of the state. In April, the government submitted to the Diet a set of bills to govern how Japan would respond in the event of a foreign attack. They would place governors and mayors under the supervision of the prime minister, who would be able to issue executive orders in their place in the event of an emergency. Quick enactment of the bills fell through, however, because lawmakers in the ruling coalition claim too much of the legislation remains vague, including even the definition of a "military attack." Another lingering question is how people's rights can be legally curtailed in such emergencies in light of Japan's war-renouncing Constitution. Lawmakers have also criticized three of the bills for failing to spell out how people would be evacuated in the event of an attack. Mounting concerns were also voiced by a number of municipal governments that, since the war, have given little thought to such legislation. The central government will need a lot of time to sell the planned legislation to the public as well as local governments, and thus passage before the extra Diet session's expected late December close is not a given, experts say.

From http://www.japantimes.co.jp/ 09/11/2002

Japan Expands Short-Selling Rules, Sets Guidelines for Banks

TOKYO - Japan's financial watchdog enacted new short-selling rules today and was set to announce guidelines on how banks could trade securities to boost the nation's flagging stock market, an official said. The Financial Services Agency (FSA) implemented its pricing rule on short-selling by brokerages which finance such trades through three special companies that lend stocks and money to fund margin transactions. Until this morning, trades that went through the firms in Tokyo, Osaka and Nagoya were exempt from tightened rules adopted in March. But now only orders of below 50 shares placed by individual investors would avoid the regulations. The move closed a loophole initially intended to help individual investors, but was instead exploited by large institutional investors after the initial clampdown by the FSA on the market-depressing act of short-selling. We've heard that there were a lot of securities firms utilising this for their trading business,' said Shigeru Ariizumi from the FSA's financial markets division. 'And that's not what the original system intended.' In March, the FSA disallowed short sales below a stock's last market price when it was falling, to prevent bearish brokers from driving a share's value down further.

From http://business-times.asia1.com.sg/l 09/17/2002

Cabinet to Call Shots on Deregulation Zones

The Cabinet Secretariat will take sole charge of selecting areas to participate in a planned special structural reform zone system and deciding on deregulation measures to be offered to local governments for implementation, according to the government's basic policy on the system. The government's panel for the special structural reform zone plan, chaired by Prime Minister Junichiro Koizumi, is expected to officially approve the basic policy Friday. Based on this policy, the government will draw up specific deregulation programs early next month for implementation in the special zones. The government plans to submit the legislation necessary to introduce the system in the upcoming extraordinary Diet session. The idea of special structural reform zones was first proposed in December by Taro Aso, chairman of the Liberal Democratic Party Policy Research Council. The government's Council on Economic and Fiscal Policy incorporated the introduction of the system in its strategic plan unveiled in June to reinvigorate the economy. The basic policy states that the Cabinet Secretariat will discuss more than 400 proposals regarding special economic zones already submitted by local governments. The Cabinet Secretariat will be solely in charge of handling applications for special zones to be submitted by local governments and officially designating areas as special structural reform zones. The aim of having the Cabinet Secretariat take control of designating special structural reform zones and deciding on deregulation measures is to eliminate resistance from recalcitrant government ministries and agencies, observers said. The basic policy also stipulates that deregulation will cover a broad range of subjects, and that local governments in the designated areas will be free to choose from among several deregulation plans which plan to implement. Further deregulation will be considered upon request from the local governments. It states that the central government will not grant subsidies and other forms of financial assistance to local governments under the system as some of them have requested. The local governments need to exhibit an independent spirit, it added. The basic policy also calls on local governments to be responsible for solving problems raised by the introduction of a special deregulatory zone rather than simply depending on the central government.

From http://www.yomiuri.co.jp/ 09/18/2002

Gov't to Raise Taxes to Curb Housing Speculation

The government yesterday announced a plan to hike property tax and tighten capital gains tax rules in desperate efforts to bring rampant house speculation under control. Unveiling a new series of anti-speculation measures, the government also decided to develop two or three new residential towns around Seoul City to increase the supply of apartments. Subscribers to to-be-built apartments will not be able to sign up for additional apartments until five years after their first subscription. ``We've decided to take these steps in a stepped-up fight against speculators and stabilize the overheated housing market,'' said Kim Young-joo, deputy finance and economy minister, in announcing the measures. The steps were adopted during a vice ministerial meeting presided over by Vice Finance and Economy Minister Yoon Jin-shik. The government plans to strengthen the tax-exemption requirement for capital gains from house transactions in Seoul and six cities in Kyonggi Province starting next month. The six are Pundang, Ilsan, Pyongchon, Sanbon, Chungdong and Kwachon, where, alongside the capital city, apartment prices have recently surged on speculative buying. Single-home owners currently enjoy exemption from capital gains tax if they sell their house a minimum three years after buying it. The new tax exemption rules call for single-home owners to possess their house for more than three years and reside in the house at least one year. In addition, the government has decided to raise property tax and global land tax in order increase the financial burden of home ownership, thus preventing people from purchasing houses and apartments for speculative purposes. The envisaged tax hike will be enforced in the first half of next year. Tax authorities also plan to conduct extensive inquiries into 483 alleged speculators by the end of November, by tracing the source of money they used to purchase houses and apartments. Authorities threatened to begin the second round of tax probes late this year to crack down on speculators found to engage in tax evasion. The administration has also decided to speed up the development of residential complexes in Pankyo, south of Seoul, and Hwasong, southwest of the capital. It also pledged to build two or three other new residential towns near the capital city to supply more apartments to the public on a mid- and long-term basis. The government also promised to take action to force financial institutions to cut the extension of housing loans, saying that superfluous liquidity has been partly blamed for sparking real estate speculation. Loan-loss reserve ratios for loans secured by houses and apartments will be hiked in Seoul and the six other cities in Kyoggi Province, which were put on the watch list. Pension funds and other publicly managed funds will also be encouraged to actively invest in stocks to boost the local equity market, which is expected to absorb money from real estate speculators. The government also decided to build more apartments in northern Seoul in a bid to extinguish a heated speculative trend in southern Seoul. Under the anti-speculation measures, it would be almost impossible for subscribers of to-be-built apartments to sign up for additional unfinished apartments until five years after their first subscription. Stricter regulations were enforced before the 1997 financial crisis in order to prevent homeowners from subscribing to new apartments. But the government lifted the regulations rules in 2000 to promote a boom in the housing market under an economic stimulus package. Sources estimated that as many as 1 million of 1.9 million potential subscribers will be virtually disqualified from subscribing to new apartments.

From http://www.hankooki.com/ 09/04/2002

South Korea: 5-Day Workweek to Start in July 2003

Starting July next year, a five-day workweek system is expected to be implemented nationwide for the first time, with workers in the public and finance sectors as well as in companies with more than 1,000 employees being the first to benefit. However, the phased implementation of the system until 2006 excludes workplaces with less than 30 employees, and it has not yet been decided whether Sunday wages should be retained or not. Labor Minister Bang Yong-suk reported Tuesday to President Kim Dae-jung on the government draft for the five-day workweek system. After smoothing out differences with economy-related ministries, the Labor Ministry plans to present the bill to the National Assembly tomorrow. According to the draft, weekly working hours will be reduced to 40 from the current 44. The new standards will be introduced in four stages. The public and finance sectors as well as companies with 1,000 employees or more will be the first to adopt the new workweek system, starting in July next year. The system will expand from July of each following year to cover workplaces with 500 or more employees, then firms with 300 or more, 50 or more and finally to 30 or more. A separate presidential decree will be made for the system's application to smaller companies. The school week will be shortened accordingly, at an unspecified point when most of the small companies have taken the workweek. Last-minute differences on Sunday wages remain unresolved. The Commerce, Industry and Energy Ministry and other economy-related government bodies reportedly call for their abolition. But the Labor Ministry wants them to be kept for the purpose of avoiding a sudden drop in wage levels. The maximum paid overtime will temporarily be expanded from the current 12 hours per week to 16 hours, for the first three years. For the first four hours of overtime work, employees get 25 percent more than the regular wage. If they work a greater amount of hours, the current overtime bonus level of 50 percent will be retained. The holiday system will undergo a major overhaul. The 12 annual days off and seniority-based annual leaves of 10 to 20 days will be consolidated into a single vacation system. Workers can take at least 15 days off annually, not counting Saturdays or Sundays. Every two years of work grants the employee one more day of yearly leave, which cannot be longer than 25 days in total. Irregular workers are also entitled to leaves of up to 15 days a year. The government's bill is the result of two years of strenuous negotiations. Since talks at the Tripartite Commission, consisting of labor, management and the government, broke down July 22, the government decided to submit its own legislation. However, the bill is seen as leaning toward management on the key issue of maintaining wage levels, and strong labor protests are expected as a result. One of the bill's clauses stipulates that the total sum received by workers should not be reduced under the new system. Labor had demanded more specific and detailed enforcement measures. As a result of the new system, South Korean workers will officially have 138 days off a year, including weekends and other national holidays. That total is similar to Japan, which has 137 holidays. The U.S. has 163, and France 145. The state-run Korea Labor Institute estimated businesses would shoulder a 2-3 percent rise in manpower costs if the government's bill goes through. Despite approximately 70-percent popular support for the shortening of working hours, however, the legislation could have difficulties in the National Assembly. The opposition Grand National Party, which holds the parliamentary majority, said it would review the bill closely. (By Seo Soo-min)

From http://search.hankooki.com/ 09/04/2002

Increased Tax Deductions for Education Spending

The government decided yesterday to rewrite income tax law to allow wage earners to enjoy increased tax deductions on educational spending for their children as well as payment for insurance premiums. Starting next year, wage earners will receive a deduction of up to 5 million won in equivalent income per college student when calculating taxable income during the year-end tax refund application process. The deduction represents an increase from the current 3-million-won ceiling for college education spending. The sum will also be raised to 2 million won per elementary, middle and high school student and 1.5 million won per preschooler, from current figures of 1.5 million and 1 million won, respectively. With the upward adjustment, wage earners are expected to enjoy a 10-to-30-percent tax deduction in accordance with the size of their annual incomes. Wage earners will also be allowed to receive a reduction of up to 1 million won from their taxable incomes in return for payment of auto, accident and life insurance premiums. The current ceiling stands at 700,000 won. The government has also decided to tighten gift-tax exemption rules in a bid to prevent individuals from transferring wealth to their spouses in order to pay fewer taxes. Under the revision bill, married persons will be allowed to transfer a maximum 300 million won in wealth to their spouses over a 10-year period without paying gift taxes. Married couples are currently allowed to give each other less than 500 million won for 10 years without paying gift taxes. The Ministry of Finance and Economy said the bill will be presented to the National Assembly soon so that the toughened rules can be enforced starting Jan. 1. The ministry has come up with the revision draft following a ruling by the Constitutional Court on Aug. 29 that the current tax law, which levies taxes on the combined asset income of married couples, is unconstitutional. A ministry official said wealthy couples may move to partition their wealth equally in the wake of the ruling calling for imposition of taxes on husband and wives separately. ``We've decided to lower the maximum sum for gift tax exemption from 500 million won to 300 million won in a move to prevent married couples from excessively transferring wealth to their spouses to avoid progressive tax rates,'' he said. Combined asset income taxes have been imposed on income earned in the form of interest, dividend and rents since 1974.

From http://search.hankooki.com/ 09/06/2002

Labor, Management Sabotage 5-Day Workweek System

Far from the expectations that labor would welcome the five-day workweek plan, the government's bill has drawn and angry backlash from labor groups. In addition, business has made it clear that they will oppose the bill on a shorter working week. Union leaders are threatening massive strikes in the coming months to stop the government from implementing the revised labor law. The nation's two umbrella unions announced they would soon decide on a strike schedule. The Korean Confederation of Trade Unions (KCTU), said it would hold industrial meetings and hold a central meeting next Wednesday to decide on a future course of action to prevent the regressive revision of the labor law being passed. KCTU, which was recently involved in a rally at Kangnam St. Mary's Hospital in southern Seoul, said the strikes would peak in November and continue up to the presidential election the following month. The Federation of Korean Trade Unions (FKTU) arranged a press conference Monday at Seoul Station to declare its opposition to the government's plan and announce future protests. The government drafted its own revision of the labor law, including the introduction of a five-day workweek after years of government-management-labor union tripartite efforts failed to find a compromise acceptable to all parties. Union representatives are strongly against leaving smaller companies with payrolls less than 30 out of the five-day workweek implementation timetable, and opposed to employees not receiving payment in lieu of leave. A number of women's groups, including the Korea Women's Association United (KWAU) and Korean Working Women's Network, also made their opposition on the government's plan public. They said they oppose the government's retrogressive revision of labor laws such as making monthly menstrual leave an unpaid holiday and reducing the amount of annual leave. The nation's big business organizations said yesterday in a joint-statement the business community opposed the bill on the five-day workweek system that the government had submitted to the Assembly. Five business organizations - the Korea Employers Federation (KEF), the Federation of Korean Industries (FKI), the Korea International Trade Association (KITA), the Korea Chamber of Commerce in Korea and the Korea Federation of Small and Medium Business (KFSB) - noted they can hardly accept the number of holidays, the implementation schedule and accompanying salary changes in the government's bill, all of which they claim to fall behind global standards. "The shortened workweek has to be considered under conditions like whether it complies with that of advanced nations, whether it is designed to reflect the business conditions of companies and whether it will maintain the nation's industrial competitiveness," the statement said. "Under the bill, combined monthly and annual leave is set at 15 to 25 days, but if those holidays are added to the total annual holidays, including public holidays, the number would reach 136 to 146 days, longer than 129-139 days in Japan," the business interest groups' statement said. According to the bill, public and financial organizations, as well as companies with more 1,000 employees, will adopt the two-day weekend from next July. The system will be adopted by July 2006 by all companies employing more than 30 workers, but the business community claimed that it is too early for big firms to implement the system from next July, saying it must be delayed to 2005. "The government bill also breaks the internationally adopted labor rule of no work no pay, as it delays unpaid Sundays under the proposed five day workweek," the KEF added.

From http://www.hankooki.com/ 09/06/2002

Government OKs N.K. Aid Fund

The government approved Saturday the use of 201.4 billion won ($156.68 million) from state coffers to ship rice and fertilizer to North Korea. The fund will be used to provide 400,000 tons of rice on credit and a donated 100,000 tons of fertilizer to North Korea and organize reunions of separated families. Of the total fund, 127.2 billion won will be used for the purchase of rice, 4.8 billion won for the lease of cargo ships and 35.6 billion for other uses such as transportation and distribution. In addition, 29.2 billion won will be allotted for the purchase of fertilizer and 3.8 billion won for the cost of its delivery. The remaining 800 million won will be used for the fifth round of reunions of separated families expected to take place Sept. 13 at the North's Mount Geumgang, the ministry said.

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

N. Korea Declares Border City a Special Zone

SEOUL - North Korea announced on Thursday it had made the city of Sinuiju on its border with China a ''special administrative region'' -- move South Korean media said was the first step toward creating a new economic zone. The announcement in a terse report on North Korea's official Korea Central News Agency (KCNA) followed the impoverished communist state's introduction in July of price and wage changes analysts said represented tentative market reforms. The economic changes coincide with North Korea's most sustained diplomatic outreach since 2000, with a first-ever summit with Japan this week and joint work with South Korea on restablishing rail and road links between the rival states. Sinuiju is on North Korea's Yalu River border with China and is the final Korean peninsula stop on one of the two North-South railroads that are being restored. Without stating the purpose of the designation, KCNA said that the standing committee of North Korea's parliament, the Supreme People's Assembly, had decreed the city a special administrative region on September 12.''The region shall be directly put under the central authority as a special administrative unit of the DPRK,'' it said, using the acronym for North Korea's official title, the Democratic People's Republic of Korea. South Korea's Yonhap news agency said the move was ''the first step toward the creation of a special economic zone'' in North Korea along the lines of the coastal zones China set up in the 1980s to transform its economy. North Korean leader Kim Jong-il toured China's economic hub Shanghai in early 2001, and was later quoted by his Chinese hosts as being strongly impressed by the dynamism of the city. In July, Pyongyang scrapped ration coupons used for decades and boosted prices closer to levels on its burgeoning black market. The move prompted rice prices in the north to soar by 50 times. For the first time 22 million North Koreans face paying rent and up to 70 times as much for diesel and other basic commodities. Experts in the South say the North has also allowed farmers to cultivate abandoned plots of land privately up to a maximum size of 1,320 square metres (14,190 square feet).Drought and other natural disasters have ravaged North Korea since 1995, with estimates of the death toll ranging from 100,000 to several million.

From http://famulus.msnbc.com/ 09/09/2002

Roh Moo-hyun to Enlarge Upon "Sunshine Policy"

With inter-Korean relations on the fast track ahead of the Dec. 19 presidential election, major presidential contenders' policies toward North Korea are in the making. Millennium Democratic Party presidential nominee Roh Moo-hyun and independent contender Chung Mong-joon publicized their overall views toward North Korea at a forum on Tuesday, while the conservative Grand National Party's standard-bearer Lee Hoi-chang presented his policy at a seminar of conservative scholars late last month. The Korea Times offers a brief look at each candidate's differing North Korea policies, which will certainly be one of the hottest issues of the upcoming election, as well as an important factor in the peace process on the peninsula for the next five years.

From http://search.hankooki.com/ 09/11/2002

Overall Tax Reform to Boost Growth

The government should lower corporate and personal income tax rates if it wishes Korean companies to invest more and consumers to spend more. In addition, consumption taxes, capital gains taxes and special value-added tax should also be lowered. In short, there ought to be comprehensive overhaul of the entire tax code with an aim to reduce the overall tax burden. In this process, government officials should be discouraged from targeting specific activities or sectors in approving cuts. Instead, reductions should be across-the-board so that special interests are not served or that the misguided logic of some bureaucrat or politician does not guide the choices. And they should be permanent so that economic decision makers can build them into their long-term planning horizons. To its credit, the government oversaw a lowering of corporate tax rates this past January. Companies with an annual taxable income of more than 100 million won saw their taxes fall by one percentage point to 27 percent while those with lower income, 85 percent of corporate taxpayers, must pay a 15 percent levy. This lowered the average corporate tax rate to 23.6 percent, down from 28.5 percent in 1994. Meanwhile, the Korea Economic Research Institute (KERI) has for drastic cuts in corporate tax rates in response to increasing global tax competition. KERI proposed that the current corporate tax rate be cut by an additional 10 to 20 percent to allow Korean companies to be more competitive and to enhance overall growth prospects. This proposal should be taken seriously and implemented with great haste to offset further uncertainties in the global situation. Although Korea's corporate tax rates are not appreciably higher than most OECD members, they are less competitive with competitors in the region. For example, Taiwan's corporate tax rate is 25 percent while Hong Kong's is 16 percent and Singapore's levy is 25.5 percent. By comparison, Germany lowered its corporate income tax rate to 25 percent from 40 percent and Canada is moving towards a cut to 21 percent from 28 percent. However, the Ministry of Finance and Economy (MOFE) was recently joined by the Korea Institute of Public Finance (KIPF) to oppose further cuts. However, the both the MOFE and KIPF relied upon spurious logic in stating its opposition by suggesting that increased government spending is more effective than tax cuts. In the first instance, reduction of taxes on corporate income and capital gains would improve the bottom line for companies and boost stockholders' wealth. This would allow businesses and households to spend more. Better yet, both of them could add to the pool of savings so that there would be a natural decline in interest rates that could encourage long-term commitments of spending in other sectors of the economy. It is wrong-headed to suggest that greater savings is bad for durable growth. Concerns have been expressed over whether lowering taxes will obstruct the attainment of a balanced budget since they yield 16 trillion won, about 20 percent of total revenues. The government has pledged to achieve a balanced budget by 2003 to improve its fiscal horizon. It should not be forgotten that tax cuts create new growth dynamics that will raise revenues in later periods. As it is, the restructuring in the wake of the turmoil of 1997-98 led to an increase in corporate tax revenues due to improved bottom lines for businesses that led to more profits. In all events, some of the short-run shortfalls can be offset if Seoul rationalizes its budget expenditures to limit waste and corruption. Massive loss of public funds from bank restructuring is just another indication that politicians and bureaucrats use poor judgment in husbanding tax revenues entrusted to them. If one of the primary goals of policy makers is to induce sustainable growth, steps should be taken to streamline Korea's complicated taxation system. This would require eliminating earmarked taxes and "quasi-taxes" (allotments and contributions and special-purpose taxes) to encourage higher levels of investment. According to the OECD, Korea has a range of pseudo-taxes that obscure tax neutrality and hinder efficiency. Similarly, there could be greater haste in privatizing state-owned or controlled financial institutions and to eliminate red tape. Reduction of taxes is the right step towards long-term sustainable growth. Easing companies' tax burdens will improve profitability and help them gain a better competitive position. And when taxes on gains from capital investment are reduced, international investors will be more likely to make more capital available. By reducing individual income taxes, a lower tax burden will motivate employees to work harder. This would be a compensation for those in low- and middle-income brackets who bore the brunt of economic restructuring and will pay the bulk of the bills for Seoul's missteps. It is just this consideration that should draw the attention of politicians seeking to win electoral support. In the meantime, ignore bureaucrats and politicians who scream like stuck pigs whenever there is talk of lower tax revenues. American political humorist P.J. O'Rourke once remarked that giving additional money to government officials makes as much sense as giving car keys and whiskey to teenagers. History suggests that most teenagers are likely to be more prudent. (by Christopher Lingle)

From http://search.hankooki.com/ 09/15/2002

Summit Success as North Korea Opens Up

The historic North Korea-Japan summit has achieved significant breakthroughs. Pyongyang yesterday revealed the fate of 11 Japanese nationals it kidnapped 20 years ago and declared it was ready to talk to the United States. At the meeting with Japan's Prime Minister, Junichiro Koizumi, the North Korean leader, Kim Jong-il, also agreed to extend the North's moratorium on missile tests beyond next year, and indicated he would accept nuclear inspections. He also asked Mr Koizumi to tell Washington he was "open for talks". The US has named North Korea as part of its "axis of evil", with Iraq and Iran. Both sides gave ground on bilateral issues. For the first time, Mr Kim conceded the kidnappings took place, and revealed that four of the 11 people abducted were still alive and said they were free to return home. Mr Koizumi is also reported to have offered an apology for Japan's colonial rule of the Korean Peninsula between 1920 and 1945. They agreed to resume talks on normalising relations. Mr Kim apologised for the abductions and said he had punished those responsible. The kidnappings topped the agenda for Mr Koizumi, the first Japanese prime minister to visit the reclusive state. Many believed he had staked his political career on success at the summit. Mr Kim confirmed that of the 11 people abducted, six were dead from "natural causes or disasters", and the whereabouts of one other were unknown. North Korean agents kidnapped at least 11 Japanese nationals as part of its Cold War espionage against Japan. They were allegedly used as Japanese language teachers and their passports used to provide identities for North Korean spies. There were harrowing scenes when families of those kidnapped received news on their fate at a special Foreign Ministry briefing. Yesterday's summit began with Mr Kim calling for an end to hostility with Japan. "I believe the bilateral relations, which have left the two countries far apart, though they are geographically close, will become an old legacy of the 20th century." The Japanese had insisted the summit should be business-like. Ceremony was minimal. Mr Koizumi flew to Pyongyang yesterday morning, and was met by North Korea's number two leader, Kim Yong-nam. The talks, held at the Paekhwa Won - Garden of 100 Flowers - guesthouse, were expected to go for four hours, but concluded after only 2 hours. (by Shane Green)

From http://www.smh.com.au/ 09/18/2002

ASEM Vows to Support N.K. Reform

COPENHAGEN - Leaders of 25 Asian and European countries vowed Monday to provide support for North Korea's economic reform in order to help the reclusive communist country reach out to the international community. They also strongly condemned all acts of terrorism, but opposed a possible U.S. military strike against Iraq without consent from the United Nations. The leaders adopted the declarations for peace on the Korean Peninsula and for cooperation against international terrorism after holding the first debate session of the Fourth Asia-Europe Meeting (ASEM) that began its two-day run. North Korea's ongoing efforts to open up to the outside world, confront terrorism, and the current Doha round of trade liberalization talks dominated the biennial summit conference, which grouped 15 European Union (EU) nations and 10 East Asian countries, South Korean officials said. "Leaders encouraged ASEM partners to continue their efforts to engage North Korea in further exchanges and cooperation at the bilateral or multilateral levels, with respect to all aspects including economic reform," the Political Declaration for Peace on the Korean Peninsula said. The statement also said engaging the North in the international community through constructive dialogue would "greatly enhance the prospects for peace and security not only in Northeast Asia, but the world as a whole." North Korea recently started to introduce some elements of a market economy system. Its latest development is the designation of Sinuiju, a northwestern city on the border with China, as a new special economic zone with independent legislative, judicial and administrative authorities. The North has also been active in improving relations with South Korea and Japan. Pyongyang continued talks with Seoul in August after a long pause and held the first-ever summit with Tokyo last week, in which their leaders agreed to work together for the normalization of relations. The ASEM leaders applauded the proven commitment towards a series of inter-Korean cooperative projects, including the launching of construction work for the reconnection of cross-border railways and roads, and the visit by Japanese Prime Minister Junichiro Koizumi to the North, the declaration said. It also said the leaders agreed that holding a second inter-Korean summit would be of great value in sustaining the momentum in the peace process on the Korean Peninsula, and hoped that all outstanding issues, including nuclear and missile-related matters, would be resolved through dialogue. But they expressed concern over the explosive inter-Korean naval clash in the West Sea in June and stressed the need to prevent the recurrence of such an incident. In their declaration against terrorism, the leaders pledged to work together to combat terrorism but emphasized that "the fight against terrorism must be based on the principles of the U.N. charter and basic norms of international law." Speaking at the opening ceremony for ASEM in Bella Center, South Korean President Kim Dae-jung reported the recent developments on the Korean Peninsula and called for support from ASEM member countries for a project to create an "iron silk road" connecting the divided Korean Peninsula with Europe by rail. "The railroad will provide ASEM with a means to realize its ideal of creating a viable Eurasian community," Kim said in his speech. "The savings realized in transport time and costs will be enormous." Kim attended a luncheon and dinner hosted by Danish Prime Minister Anders Fogh Rasmussen and Queen Margrethe II, respectively, for ASEM leaders during the day. Kim arrived here Saturday after making a one-day stopover in the Netherlands. He met Koizumi on Sunday and will hold the first summit talks between South Korea and the EU before returning home Tuesday. ASEM includes the 15 EU nations, South Korea, Japan, China and seven members of the Association of Southeast Asian Nations - the Philippines, Malaysia, Indonesia, Singapore, Thailand, Vietnam and Brunei. The two-day ASEM will end Tuesday with the adoption of a chairman's statement. The next summit will be held in Hanoi, Vietnam, in 2004.

From http://www.koreaherald.co.kr/ 09/24/2002

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ASEAN Seen to Forge FTA with Japan Ahead of That with China

Because of the complementary economic relations of ASEAN and Japan, ASEAN is expected to forge a free trade area (FTA) deal with Japan ahead of the proposed FTA with China. Trade and Industry Secretary Manuel A. Roxas II said the consensus at the close of the 34th ASEAN Economic Ministers Meeting in Brunei held last week was to achieve the FTA with Japan in less than ten years. The proposed ASEAN-China FTA was proposed to be realized within ten years from the time the Framework Agreement is signed in November this year. The Philippines has favored an ASEAN-China FTA by 2012. "There was a strong clamor among ASEAN members to forge closer economic partnership that may include elements of an FTA and realize this as early as possible," Roxas said. Roxas said the relationship between ASEAN countries and Japan is perceived to be complementary. "The Philippines' agricultural products, for example, do not pose a direct threat to the agricultural sector of Japan. They are our potential market," Roxas said. On the other hand, ASEAN was apprehensive that China's huge agricultural sector might overwhelm the largely agricultural-producing ASEAN countries. Under the Early Harvest concept, wherein both ASEAN and China will choose products where tariffs can be lowered earlier, China has already pushed to limit the list to HS Chapters 1-8 (mostly unprocessed agricultural products) and is willing to consider on a product basis goods under HS Chapters 9-24 (processed agricultural products). Meanwhile, ASEAN countries, particularly the Philippines, are not keen on the proposed closer economic partnership (CEP) with Australia and New Zealand given the region's experience on the harsh non-tariff barriers imposed by these two countries. Trade and Industry Secretary Manuel A. Roxas II, who attended the 34th ASEAN Economic Ministers Meeting said that many ASEAN members urged Australia to ease non-tariff barriers. "I was pleasantly surprise," said Roxas said of the ASEAN countries reaction to the proposed CEP with the Common Economic Relations (CER), the economic alliance with the Australia and New Zealand. According to Roxas, the discussion was lively as many ASEAN exporters have to contend with the stiff sanitary and phytosanitary standards of the Australian market. (by Bernie Cahiles-magkilat)

From http://www.mb.com.ph/ 09/16/2002


Brunei: Childcare Programme

Dr Lyn Fasoli is spearheading a pilot training programme at International School Brunei for learning support staff to become qualified childcare personnel. The course is also available to students who wish to pursue careers in childcare. As parents return to work, under-school-aged children are being looked after in a range of more and less desirable situations. Most are cared for in private, unregulated arrangements such as in-home amahs or baby sitters. These arrangements assist parents to meet their working responsibilities, educational opportunities and to pursue their careers. This is especially the case for mothers. Without this , many mothers would be disadvantaged. But how well do these arrangements meet the needs of the young children themselves? Who benefits from the form of childcare received by the majority of young children? A regulated centre-based childcare service has been introduced in many countries in response to this issue. Regulation of childcare offers the potential for ensuring that young children receive high quality care in their early years. (by Md Ezam)

From http://www.brunei-online.com/ 09/23/2002

Indonesia: Coordinate Monetary Policy, Supervision

According to Central Bank Law No. 23/1999, Bank Indonesia (BI) will no longer be responsible for supervising banks by the end of 2002. This task will be transferred to a separate agency responsible for the supervision of all types of financial institutions, including banks, insurance agencies, securities companies and pension funds. There is an ongoing process to establish the Financial Services Authority, although its establishment might not be on schedule due to the amendment process to the law.Particularly in banking supervision, an agreement has been reached between BI and the government about authority allocation. Basically, the central bank continues to have the authority to supervise the macro-banking system, while the Financial Services Authority would supervise banks individually or the micro-banking system. The central bank concentrates on the monetary policy and payment system. The Financial Services Authority would focus on the banks' compliance in following prudential banking regulations and sound banking examinations. This allocation of authority reflects an apparent separation between the central bank and the Financial Services Authority in banking supervision. When the separation is accomplished, the remaining question will be how can the monetary policy and micro-banking supervision be synchronized to achieve sustainable monetary and banking stability? The broad objective of a monetary policy is to achieve stable prices. Price stability means that changes in the general level of prices in the economy are relatively small and gradual, or in other words, prices do not rise much from month to month and from year to year. In practice, price stability equates to low and stable inflation. Central bank conduct on the monetary policy fits within some sort of regime, such as money targeting, exchange rate targeting or inflationary targeting. The policy can be implemented by open market operations, determination of interest rates and minimum reserves requirements. The aims of micro-banking supervision are to insure banks comply with banking law and regulations; to examine the soundness of banks; and to prevent bank management from undertaking excessive risks to the disadvantage of existing depositors and creditors. The expected magnitude of micro-banking supervision is banking stability, in which banks have good quality assets and liabilities, adequate liquidity and capital solvency. Monetary policy and micro-banking supervision are closely related. The transmission mechanism of monetary policy instruments, e.g. the effect of short-term interest rates on inflation, flows largely through the intermediation of the banking system. Tradeoffs between monetary stability and micro-stability of the banking system could occur when there is a conflict of interest between the monetary policy and the micro-banking supervision. For example, in a period of high inflation or exchange rate volatility, in the view of the monetary authority, increasing the interest rate is a proper policy to decrease the circulation of money, reduce inflation or to stabilize the exchange rate. While from the view of micro-banking supervision, a higher interest rate could have an adverse effect on banking stability due to the possibility of it deteriorating the banks' quality of assets, profitability, liquidity and solvency. On the other hand, the monetary authority would prefer to conduct an expansionary policy by providing more funds to the economy and speeding up its recovery, hence it might demand a temporary relaxation of the bank's lending standards. These tradeoffs occurred during the nation's financial crisis in 1997 and 1999. Will a separation between macro-banking (the monetary policy) and micro-banking supervision be more effective in resolving the tradeoffs or, in the worst case, to resolve the financial crisis? How can the monetary policy and micro-banking supervision be synchronized? These questions are very difficult to answer due to a lack of empirical evidence or test cases in Indonesia. However, the practice conducted in the United Kingdom, where, since 1997, there has been a separation between the Bank Of England as the monetary authority and the Financial Services Authority as the micro-banking supervisor, could become a conceptual framework. In the UK, synchronization between the monetary policy and micro-banking supervision is carried out by the Tripartite Standing Committee arrangement that was established under the 1997 memorandum of understanding between the authority, the treasury and the Bank of England. The memorandum not only contains the allocation of authority, but also the assurance of a smooth and reliable flow of information and crisis management protocol. Ensuring a smooth and reliable flow of information is maintained by regular meetings among representatives of the three institutions in the committee. So far, the committee has worked very well in enabling a much fuller and quicker exchange of information and views. The arrangements have proved highly valuable in helping the UK to respond quickly to the events of Sept. 11. In the immediate aftermath, a lot of business was switched from New York to London, which required a rapid response to the regulatory changes and adaptation to UK's market infrastructure. For the most part, those changes were smoothly handled under a tripartite overview. In crisis management protocol, the Bank of England and the Financial Services Authority are committed to informing each other as soon as they consider that there is a threat to financial stability. Based on the allocation of authority, the Financial Services Authority is the sole prudential supervisor; hence, an assessment of solvency would largely depend on it. The Bank of England would automatically take the lead in managing threats to monetary stability. Both institutions would manage the situation and coordinate the authorities' response and share the responsibility. The form of the response would depend on the nature of the event and would be determined at the time. In all cases, the Bank of England and the Financial Services Authority would immediately inform their course of action to the treasury, to give the minister of finance the option to accept or refuse the action. Thereafter, they would keep it informed about the developing situation. For a long time, the UK has benefited greatly from a well-capitalized banking system and its good track record in macroeconomics and price stability has strengthened the fundamentals of the UK's financial market in general. For Indonesia, where stability in the monetary and banking systems remain fragile, the separation between the monetary authority and micro-banking supervision has to be absolutely guaranteed by a solid collaboration among the central bank, Financial Services Authority and the government. A tripartite arrangement as implemented in the UK could be a suitable model for it. (by Fajar Hidayat)

From http://www.thejakartapost.com/ 09/03/2002

Govt Moves to Increase Spending on Education

The Ministry of National Education and legislators are demanding a hundred percent increase in the 2003 education budget, from Rp 13.6 trillion (US$15.2 billion) as proposed by President Megawati Soekarnoputri, to about Rp 26 trillion, saying the rise is crucial to achieve the goals of national education." The President had earlier proposed to increase the budget from the current Rp 11.2 billion to Rp 13.6 trillion, but it is still not enough to meet even the minimum requirement to support development in the education sector," Minister of National Education Abdul Malik Fajar said here on Monday after a hearing with House of Representatives Commission VI on people's welfare. The hearing on Monday was held to set up a schedule for the deliberation of the national education bill. The ministry and legislators expect to approve the bill in May next year. "If this country is determined to develop the education sector for the sake of the people as amended by our Constitution, I hope the House will consider raising the budget to about Rp 26 trillion," Malik told The Jakarta Post after holding a hearing with House Commission VI. The House has yet to agree to Megawati's proposal for the Rp 13.6 trillion budget, which is only 4 percent of the 2003 state budget. The proposed increase, made last month at her state address on the eve of the anniversary of Indonesia's independence, is far below the 20 percent mandated by the fourth amendment of the Constitution. Article 31 of the amended 1945 Constitution stipulates that the state shall give priority to education by allocating a minimum of 20 percent of the total state and regional budgets for the country's education. Legislator Heri Achmadi of the Indonesian Democratic Party of Struggle (PDI Perjuangan) said the Commission had assigned the House's Budget Commission to increase the education budget to Rp 24 trillion, even though "the amount is not significant compared to the number of Indonesian children who need to receive education." "If the government could allocate some Rp 23 trillion in bailout funds for Bank Mandiri, why did it fail to propose a higher budget for education?" asked Heri, also deputy chairman of House Commission VI, referring to the largest state-owned bank. According to Malik, the increase proposed by his ministry and legislators will help improve the quality of education, including in the restive areas of Aceh, Ambon and Poso in South Sulawesi that need special attention. Even in Java, which is close to the seat of the central government, the picture is not at all rosy. In Garut, West Java, for example, some 272,000 students have been forced to sit on the floor because some 70 percent of the furniture at the regency's 1,500 elementary schools has been damaged due to poor maintenance and natural disasters. The regency needs around Rp 60 billion to rebuild 450 school buildings. Farther from Jakarta, the picture is even bleaker. In Kendari, Southeast Sulawesi, elementary school students in remote Tangkuna regency have to collect Rp 2,000 every month to pay for their teachers' salaries in an attempt to attract more teachers there. Poor pay, remote locations and inadequate facilities have scared teachers away from places like Tangkuna. Currently, there are only three teachers there for around 100 students. Prolonged conflicts have further worsened the situation. In Aceh, more than 100,000 school-age children have missed school over the last three years due to the armed conflict between security forces and the Free Aceh Movement (GAM). According to data at the Aceh Education and Culture Office, 160 private and state elementary and high schools have been badly damaged since 1999 and none have been repaired so far. Worse, the government has failed to guarantee the safety of teachers in Aceh. The Aceh chapter of the All-Indonesia Teachers Association (PGRI) reported last week that 50 teachers had been killed and 200 others physically assaulted in the past two years. During the three-year sectarian conflict in Maluku, thousands of students attended classes in makeshift structures in refugee camps because their schools had been damaged. (by Muninggar Sri Saraswati and Tiarma Siboro)

From http://www.thejakartapost.com/ 09/17/2002

Gender Equality Introduced in Citizenship Bill

Hopes are running high that the new citizenship bill will solve disputes over citizenship, particularly for women and children, as it recognizes the principles of gender equality. The bill, together with the latest draft law on immigration, was assessed on Wednesday by government officials, experts and non-governmental organizations (NGOs) in order to collect more input before its submission to the House of Representatives for further deliberation. It allows a male foreigner who is married to an Indonesian woman to change his citizenship to Indonesian, while an Indonesian woman married to a foreigner has the right to retain her citizenship and to decide on the citizenships of her children, who are under the age of 18. "These clauses have been made possible because we have adopted the principles of gender equality in the draft," Minister of Justice and Human Rights Yusril Ihza Mahendra said after opening a workshop to review the two drafts that his ministry sponsors. He said the old law passed in 1958 needed revision because it was obsolete and made under the 1950 Constitution, while the country upholds the 1945 Constitution. Indonesia recognizes the principle of ius sanguinis, whereas the citizenship of a child is the same as his parents. There are many legal disputes between divorced couples of Indonesian women and their foreign ex-husbands over the citizenship of their children. The resolution is considered unfair as children were given their fathers' citizenships, although the children were in the custody of their mothers. Another breakthrough in avoiding an unclear citizenship status in the draft was the introduction of dual citizenship for children of Indonesian parents born in a country, which recognizes every birth in the territory as their citizen. "When the children reach a particular age, say 18, they have the right to decide which of the citizenships they will keep," Yusril added. The draft also allows individuals to restore their Indonesian citizenship that was lost involuntarily for other reasons, such as a political situation, marriage or foreign adoption. An Indonesian may lose their citizenship if they join a foreign military institution, voluntarily taking an official position in a foreign institution or joining a public election in another country, with the exception of Indonesians studying abroad in countries that impose a military draft on foreign students, such as Singapore. Procedures to obtain Indonesian citizenship The following procedure pertains to foreigners who possess a permanent stay permit and a work permit and those who intend to regain Indonesian citizenship: 1. Submit an application to the Ministry of Justice and Human Rights through the district court. 2. The application will be assessed by an interdepartmental team comprising officials from the ministry's Directorate of Public Institutions, Directorate of Immigration, the National Intelligence Body and the State Secretary. 3. The minister of justice and human rights will hand the result of the assessment over to the President, who will later issue a decree legalizing the new citizenship. 4. The new citizen will take an oath at the district court. (by Tertiani ZB Simanjuntak)

From http://www.thejakartapost.com/ 09/19/2002

New Copyright Law to Boost Local Software Industry

The adoption of a new copyright law, that will take effect next year, will encourage more creativity, development and investment in the local software industry, key players said on Thursday. Richard Kartawijaya, an executive of the Association of Indonesian Software and Telematic Developers (Aspiluki), said the association's 180 members were preparing moves to anticipate the lucrative domestic market, with more protection. "The industry is promising here. Actually, our technicians and products have entered the international market. But most of them are reluctant to open businesses in Indonesia due to the rampant piracy," he told a media briefing here. Under the amended Law No. 19/2002 on Copyrights signed by President Megawati Soekarnoputri in June, those involved in software piracy are subject to a maximum punishment of five years imprisonment and a maximum fine of Rp 500 million (US$55,493). The law will come into effect in June, 2003. Richard added that currently there were around 400 software houses in Indonesia, 60 percent were located in Jakarta and 10 percent in the West Java capital of Bandung. "Their quality of products can be categorized as magnificent," he told the media briefing. The media briefing was held by the Directorate General for Intellectual Property of the Ministry of Justice and Human Rights, together with Aspiluki and the Business Software Alliance (BSA), a multinational association grouping big software companies such as Adobe, Apple Computer, Compaq, Dell, IBM, Intel and Microsoft. During the briefing, they announced that they would hold a seminar on the "Importance to Foster Creativity in A Competitive and Conducive Atmosphere by Using Legal Software" on Tuesday. BSA representative for Thailand and Indonesia Jonathan Selvasegaram said the presence of the new law showed that the government was serious in addressing software piracy, which was still rampant. Last year, Indonesia was named the third ranked country involved in software piracy in the world after Vietnam and China. Quoting a 2001 survey, Selvasegaram said nine out of 10 computers in Indonesia use unlicensed software. The high rate of the use of pirated software is equal to $79 million, added BSA Vice President and Asia Pacific Director Jeffrey J. Hardee. Computer users in Indonesia are mostly businesses with a small number of personal users. Software piracy takes many forms, such as the copying of programs by users exceeding the quota allowed by the license holder, the installment of unlicensed programs to new hardware by the seller or the copying of programs available on the internet. Richard argued that most of the piracy culprits were aware that such practices were a crime against intellectual property but, up to now, the existing law categorized the crime merely as a petty crime and failed to deter the culprits. The new law, nevertheless, categorized piracy as a serious crime, with threat of a five-year jail term and Rp 500 million fine. Selvasegaram said that even with the new law, BSA would not take drastic measures but take the role to educate computer users on software copyrights. "The users should be aware that the use of legitimate software will give more benefit to the business," he added. (by Tertiani ZB Simanjuntak)

From http://www.thejakartapost.com/ 09/20/2002

Malaysia: Biggest Slice of Pie for Education

THE Prime Minister has proposed the setting up of an Education Savings Fund to finance higher education in Budget 2003. Datuk Seri Dr Mahathir Mohamad, who is also Finance Minister, said the fund would help meet the parents' future educational expenses of their children. "The Government will provide a matching grant for every ringgit saved by children from low-income families with an initial allocation of RM1bil. "I hope this programme will cultivate a savings culture among children,'' he said. Education once again received the largest share of the pie - RM29.6bil or 27% of the Budget allocation. Dr Mahathir said although education had the largest allocation, the amount appropriated for the National Higher Education Fund Corporation was insufficient. He said added that although to date RM4.5bil had been allocated, benefiting 380,000 students, the programme required an additional RM3.5bil for the period up to 2005. "Therefore, a loan programme will be created through financial institutions to provide loans for students. Financial institutions will be required to channel a portion of their loan portfolio for higher education,'' he said. Dr Mahathir also said pupils from poor families would receive aid next year. He said the Government would spend RM470 per pupil for food supplements, textbook loans and school uniforms annually. "To reduce the burden of poor families, the Government will provide a one-off allocation of RM120 in cash per student to buy their school paraphernalia (including uniform). This will involve an annual expenditure of RM87.8mil and will benefit 730,000 students," he said. Dr Mahathir said the Government was also considering providing poor students with tuition vouchers so that "not only students will benefit, diligent teachers will also be able to earn additional income.'' He also announced that single session schools would be increased and integrated schools introduced where students could choose from three streams - Pure Sciences, Technology and Islamic Studies. He said RM850mil would be allocated to implement the single-session schools. Dr Mahathir said the Government had decided to implement the teaching of Science and Mathematics in English in schools. For this purpose, he said, the Government would provide an RM5bil allocation for a period of seven years from 2002 to 2008. He said a large portion of this allocation would be for training teachers, providing a launching grant for schools and teaching and educational aids, apart from basic facilities and physical infrastructure, including ICT. Dr Mahathir said private institutions would be allowed to hire foreign lecturers to promote Malaysia as a centre of excellence in IT education. Education Minister Tan Sri Musa Mohamad described the allocation for education as "very workable." "Although the amount is still lower than what we proposed to the Treasury, we are very happy with the allocation given. It is the highest in the history of the country," he said.

From http://thestar.com.my/ 09/21/2002

Project to Raise Villagers' Income

THE Government will introduce a "One Village One Industry" programme for the rural community, especially for the traditional farmers and fishermen. This would allow them to earn salaries as well as invest and own the industries, which would be professionally managed. They would be involved in the development of small industries, which would require between 10 and 100 workers. The programme would enable rural communities to work at specific hours to ensure the production of quality and marketable products. Their income would be increased with the re-planning of villages, complete with retail and coffee shops as well as other facilities and small factories to produce the products. The allocation for rural development has been increased by 36%, with RM2.56bil for infrastructure facilities. It would be used to build and upgrade major roads, village roads and bridges and to provide 90% of rural folks with electricity, water, health, education, housing and telecommunication facilities. A total of RM270mil would be used to complete 111 rural roads and to build 289 new ones while RM600mil would be spent to construct 6,000 village roads. An additional RM30mil has also been allocated to repair nearly 1,400km of village roads. The Government has allocated RM300mil to carry out 720 projects for electricity supply benefiting 103,000 households while RM250mil has been set aside to provide water supply to 84,000 households nationwide. In addition, a sum of RM10.3mil has been provided under a programme for water supply and rural environmental cleanliness. The Government would also spend RM289.7mil to construct, upgrade and repair 76 rural clinics while eight hospitals, 13 health clinics, 60 rural clinics and two training schools for nurses, would be fully operational.

From http://thestar.com.my/ 09/21/2002

Philippines: New AO Expands Doe Powers to Undertake Policy Reforms

A newly-issued Administrative Order (AO) 38 is out to expand and build up the powers of the Department of Energy (DoE) in pursuing policy reforms in the sector - particularly in the oil and power industries. The AO, signed by President Arroyo last August 23, provided the creation of two new bureaus that will specifically focus on the concerns of the oil and power industries - the Electric Power Industry Administration Bureau (EPIAB) and Oil Industry Administration Bureau or OIAB. Under the AO, the EPIAB will be tasked to supervise the restructuring of the electric power industry, with a view to establishing a competitive, market-based environment and encouraging private sector participation. The EPIAB will also formulate plans and programs that would ensure adequate, efficient and reliable supply of electricity and as well as implement programs and strategies on rural electrification. The oil industry bureau, on the other hand, will formulate and implement policies, programs and regulations on the downstream oil industry including the importation, exportation, stockpiling, storage, shipping, transportation, refining, processing, marketing and distributon of petroleum crude oils, products and by-products. The OIAB will also be tasked to strictly monitor developments in the downstream oil industry. The functions of these two new bureaus used to be handled by the Energy Industry Administration Bureau (EIAB). In issuing the AO, President Arroyo pointed out that the energy department's role shall be strengthened to cope with the developments in the implementation of policies in line with the laws set forth for the energy industry, including the Downstream Oil Deregulation Act, Philippine Clean Air Act and the Electric Power Industry Reform Act. Republic Act 7638 or the Department of Energy Act of 1992 created the department from only being an office called Office of Energy Affairs under the Office of the President. However, the AO will provide for the institutional strengthening of the energy department by redefining the functions and services of its bureaus, service units and offices, does not amend, supersede, nor nullify the functions as provided in RA 7638 or in other laws giving additional functions to the DoE. "The enactment of several laws related to the energy sector has indeed expanded the functions of the DoE. There is, therefore, a need to rise above the challenges brought about by the liberalization of the country's oil and power industries in order to fully serve the public's interest as well as the investors in these areas," Energy secretary Vicente Perez Jr. said. (by Myrna M. Velasco)

From http://www.mb.com.ph/ 08/31/2002

New Education Policy Aims for Universal Primary Education, Gender Equality

The Asian Development Bank (ADB) today approved a new Education Policy aimed at providing all children and adults in the Asia-Pacific region with equitable access to an education that will empower them to break out of the poverty cycle and participate effectively in national development. The policy underpins ADB's support for the United Nations Millennium Development Goals, which include enrolling all children in primary school, promoting gender equality and empowering women by 2015. Since investment in education is essential to ADB's overarching goal of poverty reduction, the policy focuses on efforts to promote educational development. The efforts aim to alleviate the drastic situation in the Asia-Pacific region, where: 75 percent of the world's illiterates live, two thirds of them women; Millions drop out of primary school because of poverty and half of all children never make it to secondary school; Nearly 40 percent of children under 5 are malnourished and unlikely ever to achieve their potential. ADB's average annual investment in education has been nearly 6 percent of its total annual lending since 1991. Since 1970, it has invested US$5.3 billion in education sector development, two thirds of this since 1991. ADB plans to invest over US$1 billion in loans for education projects in the period 2002 to 2004. The new priorities are to reduce poverty, enhance the status of women, and provide skills for pro-poor sustainable growth. To support this, the policy will give particular attention to increasing equity and access, improving quality, strengthening management, mobilizing resources, strengthening partnerships, and applying innovative technologies, especially ICT (information and communications technology). These goals will be applied in each education sub sector. In literacy and nonformal education, there will be more support for innovative and responsive programs, particularly in collaboration with NGOs; Early childhood development programs will also be expanded, with an emphasis on low-cost, community-based provision; Basic education priorities include ensuring equitable access and resource allocation, improving quality, and strengthening community development; Secondary education investments will emphasize cost-sharing, private sector provision, and special programs to increase access by the poor and women; Higher education projects will enhance the role of the private sector and strengthening government capacity to monitor standards, and to support NGO-led provision of skills training in income-generating activities for poor women. "ADB support for education at all levels will concentrate on policies and activities that directly contribute to overall programs of poverty reduction," says Akira Seki, Director-General of ADB's Regional and Sustainable Development Department. "However, the balance of investments across education sub sectors will be determined according to a particular country's situation." The policy paper paves the way for the preparation of education sector strategies and road maps for each country, to translate policy principles into specific strategies and investment plans. ADB's earlier education sector policy paper in 1988 emphasized the importance of investing in primary and secondary education in the context of broader human and social development.

From www.abd.org 08/30/2002

Thailand: Bid to Cease Primary Level Entrance Exams

The Catholic Education Council and National Education Commission will ask cabinet to require primary schools to abandon academic entrance exams in favour of development tests. Council member Brother Meesak Wongprachanukul said the parties would like to see the change take effect from 2007 for the sake of children's natural development. ``Without a clear policy from the government, schools will remain unaware of the negative impact of exams on young children and continue to use the wrong method to recruit pupils. ``Parents rush their children to tuition, and kindergartens force academic knowledge onto pupils rather than encouraging their physical and emotional development,'' he said. Primary schools should admit children unconditionally and without exams. If applicants outnumbered seats, children would be selected with development tests based on activities, interviews and questionnaires. The clergyman said that primary schools under the Education Ministry had scrapped entrance exams for first-grade pupils, but most private schools and university demonstration schools had not followed suit. Some well-known private schools did end entrance exams this year, including St Gabriel's, St Dominic's, Assumption Bang Rak and Assumption Thon Buri. St Dominic's assistant director Suthana Tangtrakul said his school had started choosing first-grade pupils on the basis of activities and interviews, and was now admitting more lively and self-confident pupils. Visit Srivichairat, director of St Gabriel's school, said parents were happy with the new method in which children underwent tests of their creativity, human relations and intelligence. The change was also influencing tuition schools to replace academic courses with development-based programmes, he said. Porntip Yawapraphas, a teacher at the Kasetsart University's demonstration school, said her school had replaced exams with intelligence tests. Entrance tests were necessary, because the school had as many as 4,000-5,000 applicants a year. Politicians often pressured the school to admit particular pupils. They threatened to limit its budget allocation if the school resisted, she said. (by Sirikul Bunnag)

From http://www.bangkokpost.com/ 09/14/2002

Bureaucratic Reform: Suspense

After racing the bureaucratic reform bill to the Royal Palace on Tuesday, the Thaksin government yesterday ensured an opposition petition that raises questions about the legislative draft was processed at a snail's pace. As of late yesterday, the petition was still being thrown back and forth between House Speaker Uthai Pimchaichon and his deputy, Somsak Prissanananthakul. It has yet to be countersigned and forwarded to the Constitution Court. The government was pinning its hopes on early royal approval of the bill in order to scupper the opposition's last-ditch efforts to delay its enactment by raising constitutional questions. The Democrat-led bloc, on the other hand, wants its petition to formally reach the court before His Majesty the King signs the bill into law. Uthai, recuperating from a mild heart complaint in Chon Buri, frustrated the opposition by at first stating that Somsak could sign the petition on his behalf and then changing his mind. Opposition representatives were camped in front of Somsak's parliamentary office all day, and even though at one point they managed to get the deputy House speaker's signature on the petition, they were kept waiting by Uthai's flip-flop. "This seems like an illegal or even unconstitutional conspiracy to block our petition," said Democrat Withaya Kaewparadai, who was summoning his party's legal experts to discuss the government's tactics. Jurin Laksanavisit, the opposition's chief whip, insisted that the petition was in fact formally submitted to Parliament before the bill was sent to the Royal Palace on Tuesday evening. "Moreover, it took only 10 minutes for Parliament to deliver the bill to palace officials, but we have been waiting all day for our petition to be signed and sent to the Constitution Court," he said. "The government's shadow is hanging over the House of Representatives. The foot-dragging by the House speaker is tantamount to failure to perform his constitutional duty." Senator Kasem Rungthanakiat (Surin) said if it was indeed a conspiracy between the government and parliamentary officials to stall the opposition's petition, which was drawn up in accordance with people's rights under the Constitution, an impeachment campaign could be launched against the Thaksin administration. Uthai was said to be stalling the matter further by seeking consultation with legal aides. According to a source, he was "not sure" if the petition could still be processed, as the bill had already been sent to HM the King. Constitution Court President Issara Nititanprapas, however, said that as long as the bill had not been officially signed by HM the King, the court could deliberate on its constitutionality. An urgent court session could take place as early as today once the petition has been forwarded from Parliament. The bill would empower the government to issue royal decrees to transfer the power and jurisdiction of ministries and departments in order to facilitate the large-scale bureaucratic reform the administration hopes to kick-start on October 1. As royal decrees do not need to be endorsed by Parliament, the opposition says this clause goes against constitutional principles of checks and balances between the executive and legislative branches. Another contentious clause would allow ministers affected by the dissolution and transformation of ministries to remain Cabinet members as they waited to be reassigned. The opposition says this could violate constitutional rules on the appointments of ministers, which need to be countersigned by HM the King.

From http://www.nationmultimedia.com/ 09/26/2002

Viet Nam Govt Boosts Its Investment in Education

Some VND24.6 trillion, or 16.4 per cent of total Government spending next year, will be allocated to education and training to meet increasing demand. Around 22.1 million students will be enrolled during the 2002-2003 academic year, an increase of 2.4 per cent over the previous year. The number of kindergarten students looks set to increase by 9.5 per cent, primary and secondary school students by 0.4 per cent, vocational school students by 69.6 per cent, and university students by 6 per cent.

From http://vietnamnews.vnagency.com.Vn/ 09/05/2002

Competition Law to Be Laid Down in 2003

HA NOI - In a further push towards business policy reform and international integration, Viet Nam will have its first competition laws late in 2003 or early in 2004, Deputy Trade Minister Le Danh Vinh said in a press briefing yesterday. Having completed the fifth draft, the Ministry of Trade will submit the competition law for Government perusal this December, said Vinh, who is also the head of the compiling committee for it.The law will be put for further discussion and revision, before it is presented to the National Assembly for approval, expectedly in October next year. The Ministry of Trade has placed the latest draft for discussion with UN officials at a two-day conference on competition law and policy this week. "The Competition Law draft is of very high quality, and it will be a challenge to get approval as well as to implement it effectively," said UNDP Senior Economist Robert Glofcheski. While many countries have separate laws such as Competition Law, Anti-trust Law, and Law against Unfair Competition, Viet Nam will incorporate all these aspects in its Competition Law, according to Vinh. With nine chapters, the law lists four comprehensive ranges of practice as against competition. The law will seek to prevent businesses' anti-competition agreements, abuse of market dominance or monopoly position, concentration of economic powers and unfair competition. The law will also proscribe enterprises in public utility or State monopoly sectors from abusing their status, or operating beyond their assigned authority, affecting competition and consumers' interests. The competition law will introduce competition in many sectors where State-run monopolies are currently in place, helping reduce prices and enhance quality of goods and services, Vinh said. It also signals the consistency in Viet Nam's policy of pursuing a multi-sectoral market economy, which have fetched remarkable success to local agriculture and seafood industries, he added.

From http://vietnamnews.vnagency.com.vn/ 09/14/2002

Government Works Hard to Root Out Opium Planting in Nghe An

NGHE AN - The Government's efforts to root out opium plants in the central province of Nghe An are believed to have paid off, although changing the long-standing custom of the area's ethnic minority residents has not proven easy. Before 1992, the province was home to more than 4,500 households, in 23 communes that grew about 3,200ha of opium plants - most of which were in Ky Son District, which alone had 3,000ha in 16 communes. A US$3.8-million pilot project run by the State and the United Nations that sought to eradicate the plants by supporting ethnic minorities to grow other trees from 1995 to 1998 saw initial success. Since then, the State has poured VND1-2 billion annually to buy seedlings for local residents. Another VND200-400 million from the local budget has been given to those living in a difficult state to farm and raise animals. Many farmers have opted to grow Tam Hoa plums and raise cows and fish, which turn a profit. However, life in some villages is still cash-strapped, and they are not resolved to abandon the opium trade. Some villagers are disheartened when their fruit trees produce no high economic value. Tam Hoa plums, for instance, are ripe only for a short time - if the traders can not enter the villages to buy them because of heavy rain, tonnes of fruit will go to waste, greatly affecting the income of growers. Local authorities have had to work harder to prevent people from returning to the opium trade, and many are using the mass media to encourage them to get rid of the opium plants. This year the provincial television provided tapes in Mong language to make the laws accessible to locals. In addition, the district's working teams have made local visits to motivate villagers to focus on production. "We encounter lots of difficulties in encouraging people to eradicate the opium trade," said Moong Van Nghe, head of the provincial ethnic and mountainous department. "We have to build up careful plans for every step, as ethnic minority residents live in communities and with old customs," Nghe explained. Meanwhile, their educational attainment is very low compared to urban and non-minority areas. And village heads are considered as those having highest authority and prestige. That in mind, the provincial People's Committee and cadres from relevant agencies often hold talks with village heads to help them understand the law and the harmful effect of drugs. Their efforts eventually reap success. However, local authorities are aware that more work must be done until local residents totally understand the need to avoid re-planting opium plants. The plants replacing opium must be ones providing high economic returns. On the other hand, investment is needed to develop infrastructure of the mountainous areas. The province has supported locals a good deal to help them stay out of poverty. They have been given medicines, seedlings and books for their children. In addition they receive subsidies worth VND100 million for the transport of plums - one result of which has been the consumption of more than 200 tonnes of plums. Under this year's plan, VND15 billion will be spent on irrigation and reclaiming the water rice fields in Ky Son. Also, the second phase, which will cost of the $2.3-million, of the UN project is being carried out in the district to help locals boost their socio-economic situation. Construction to upgrade local transport is underway, as well.

From http://vietnamnews.vnagency.com.vn/ 09/20/2002

TOP

 

Law Ministry Mulls Changesin Bar Council Act

The Law Ministry is contemplating bringing some important changes in some provision of the age-old Bar Council Act to upgrade legal and judicial systems. "We want to make the important institution a more democratic and neutral body as per demand of the different bars, senior lawyers and other professional bodies of the lawyers," said Law Minister Moudud Ahmed yesterday. The Bar Council Act, which was enacted in 1972, provides for enrolment certificate of the lawyers, control of the professional behaviour, discipline and qualifications of the lawyers. Suggestions put forward by different bars, other professional bodies and senior lawyers include election procedure and recasting the enrolment committee. A ministry source told UNB that the demands, which are identical, include increase in the number of members of the council, direct election to the post of vice-chairman, nomination of judges and academics to the enrolment committee along with elected council members. Under the existing law, present council comprises 15 members. The Attorney General is ex-officio chairman of the council while seven national and seven zonal members are elected by the lawyers across the country. And a vice-chairman was elected from among the 14 elected members. The council forms several committees, the most important one being the enrolment committee that gives enrolment certificate to the fresher in legal profession. Suggestions also include election of zonal representatives by the zonal lawyer-members of the Bar Council. The present enrolment committee comprises five members. Demands raised by the bars are for two members to be nominated by the Chief Justice from among retired or sitting judges as well as inclusion of the Attorney General and two others from among the council members and also from academics. Suggestion is also for increasing functional powers of the Chairman. To a question, Law Minister Modud Ahmed admitted to receiving suggestions from different bars and individual lawyers and said these were being considered. He said the ministry is not in a hurry and it would take up the issues with the Bar Council, different bars, senior lawyers and other professional bodies of lawyers. Moudud said changes in the Bar Council Act are required to enhance efficiency of the lawyers and of the judicial system.

From http://www.dailystarnews.com/ 09/09/2002

Bhutan: Civil and Criminal Procedure Code for Police Officials

Speaking to over 50 police officials attending a three-day workshop on the Civil and Criminal Procedure Code of Bhutan, the Chief Justice, Lyonpo Sonam Tobgay said, "Police officers and the judiciary have an important role to ensure fair justice to everybody." The Chief Justice added, the law must encourage virtue and prevent vice and immorality. Addressing the officers the chief of police, Colonel Wangdi Tshering said that this would help police officers in carrying out their duties according to the laws of the kingdom. The Code upholds the due process of law, where trials and inquires are fairly conducted, arrests and searchers are properly done. In Trashigang for the first time district court officials and the police are also discussing the code. Discussions focused on the judicial procedures of arrest, summons, trials and judgments including the role of police in these procedures. The Civil and Criminal Procedure Code of Bhutan drafted by the high court, was adopted during the 79th session of the National Assembly in 2001.

From http://www.kuenselonline.com/ 09/10/2002

India: HC Can't Ask Govt to Alter Sentence--SC

NEW DELHI: The Supreme Court has held that the high courts could not order the state governments to commute the sentence of a convict at their sweet will, pleasure, whim or fancy. Quashing a Delhi HC order, which had asked the Delhi government to commute the sentence awarded to a person in a food adulteration case, a Bench, comprising Justice Doraiswamy Raju and Justice S V Patil, said discretion of commutation of sentence rested with the government and it was not for the HC to order it.

From http://timesofindia.indiatimes.com/ 09/06/2002

Jana Rules Out Amendment to Civil Procedure Code

CHENNAI: Union Law Minister Jana Krishnamoorthy on Sunday ruled out the possibility of bringing in yet another amendment to the Civil Procedure Code, saying that the legislation relating to this had already been passed by Parliament. "I do not think there is a possibility to bring further amendments to CPC. I also wonder whether it will be in accordance with Parliamentary practices," he said, replying to questions at Meenambakkam airport, on his arrival from Delhi to participate in a private function here. Responding to a question on the charges of some Congress leaders that Tamil Nadu Chief Minister and AIADMK leader Jayalalithaa was keen on moving closer to BJP, so as to extricate herself from the TANSI case, now pending in the Supreme Court, he said, "As law minister, I cannot comment on it". "It is her view", he said to another question on Jayalalithaa's outburst that the Cauvery River Authority (CRA) meeting had been convened on Sunday only to help Karnataka.

From http://timesofindia.indiatimes.com/ 09/08/2002

Delhi Govt's Legislation Derailed

NEW DELHI: The Delhi state government's decision to bring a separate Bill on Metro Rail has come a cropper with the Centre making it mandatory for all legislative proposals to be sent to the Lieutenant-Governor for approval before they are introduced in the legislative assembly. As the state government's Bill would be contradictory to the Centre's Bill on the same subject, there are little chances that it would be approved by the L-G. Despite realising this, the state government has decided to draft the legislation and send it to the L-G. It would propose guidelines on operation and maintenance of the Metro. Delhi state transport minister Ajay Maken said the city government's Bill on Metro may not be tabled in the Delhi legislative assembly, but it would still serve its purpose. ''In their Delhi Metro Railways (Operation and Maintenance) Bill 2001, the Centre has circumvented the role of the Delhi state government,'' he said. ''Our Bill will not have any legal standing as compared to the Centre's Bill on the same subject, but we would still send it to L-G for the sake of moral accountability to the people of Delhi,'' he added.

From http://timesofindia.indiatimes.com/ 09/17/2002

National Policy on Adolescence Proposed

NEW DELHI: The second most populous country in the world has around 260 million adolescents - individuals between the age group of 10 and 19 years, as per the WHO definition - which accounts for about 23 per cent of its population. In order to address the problems faced by adolescents and to transform them into an asset for the country, the Planning Commission has for the first time felt the need for formulating a national policy on adolescents in India. The Commission, in collaboration with the Urivi Vikram Charitable Trust (UVCT), a non-governmental organisation (NGO) working for the empowerment of young adults, has endeavoured to draft a policy framework for adolescents in India. A core group led by former education secretary Anil Bordia has been constituted to recommend various schemes for the betterment of adolescents. The schemes, when finalised, will be incorporated in the 10th Five Year Plan. Recently, the UVCT, in association with the Commonwealth Association of Media Persons for Social Development (CAMP), organised a regional meet on 'A National Policy on Adolescents' in Delhi. The purpose of the meet was to create an environment in which experts from various fields and young adults could interact and address the problems faced them. The meet was presided over by Planning Commission deputy chairperson K C Pant. Pant said adolescence was an age which was full of promise and pitfalls. According to him, adolescents should be provided the right channels to utilise their energy and achieve their goals. The efforts for formulating a national policy on adolescents had, in fact, begun in July 1999, when the UVCT along with some government agencies, NGOs, and representatives from the United Nations, came forward to prepare a forum towards a 'National Policy for the Young Adults'. The forum made some recommendation to the Planning Commission in December 2000, which was immediately approved by the Commission (by Naheed Ataulla).

From http://timesofindia.indiatimes.com/ 09/22/2002

Sri Lanka: New Laws for Easier Local and Global Connectivity

The Government plans to establish a class licence scheme for international telecommunications gateways and to fully liberalise local and international leased lines. The class licence scheme will include requirements for non-discriminatory operation of gateways, licence fees that will not impose undue burdens on the operators and may include guarantees against violation of licence conditions. The new arrangements will lead to wider customer choice, lower prices, better quality and faster network rollout. "This decision signifies the government's clear commitment to ensuring that the citizens of Sri Lanka and businesses will reap the full benefits of a choice of high quality, low cost means to connect to the world," said Kumar Abeysinghe, Secretary of the Ministry of Mass Communication. "Unless we liberalise, we cannot create jobs for the youth of this country through call centres and other IT enabled services," he added. Abeysinghe said that "the market opening will ensure that Sri Lanka maintains a competitive position in international telecom services that will assist all businesses, attract additional investments in IT-enabled services and help the several millions of Sri Lankans living abroad to keep in touch with their families." The Government has provided assistance to the Telecommunications Regulatory Commission to establish an interconnection regime that will ensure that domestic network operators are fairly compensated for their role in international communications. The more domestic subscribers there are, the more international calls will be made to Sri Lanka, resulting in additional termination revenues among other benefits. The new interconnection regime that will be developed by international consultants will address several shortcomings and will ensure that the international gateways will be fruitfully integrated into the overall telecom sector. The provision of domestic and international leased lines will be completely liberalised including the carriage of voice. The Telecommunications Regulatory Commission will investigate the de facto monopoly of undersea cables and formulate recommendations for ending the monopoly. Although satellite access has been more or less liberalized since 1999 in Sri Lanka, the Government intends to formalise the liberalisation to eliminate the necessity for approvals for obtaining satellite capacity. "The Government's focus on competition and deregulation is critical to realisation of the Prime Minister's vision of making Sri Lanka a regional hub," Abeysinghe said

From http://www.dailynews.lk/ 09/03/2002

National Policy on the Disabled

The Social Welfare Ministry plans to introduce a National Policy on the Disabled. Social Welfare Minister Ravindra Samaraweera has appointed a 12- member Committee to draft a National Policy on Disability. Social Welfare Ministry Secretary Ms. Viji Jegarasasingam told the "Daily News" yesterday that the Ministry is seeking the assistance of Ministries, institutions and other agencies for chartering of this new policy - the first time such a concept has been introduced in this country. The concept of equality, the protection of fundamental rights and responsibilities and removing barriers for marginalised groups (disabled females, children and youth) will be some of the main subjects covered by the draft. The public is invited to send views and suggestions to the Ministry of Social Welfare, 5th Floor, Sethsiripaya, Battaramulla. The National Secretariat for the Persons with Disabilities was established under the provisions of the Protection of Rights of the Persons with Disabilities Act.No.28 of 1996. The committee consists of Cyril Siriwardene, S.L. Hettiarachchi and Anil Jayawardene representing those who have mobility, visual and communication disability respectively, Ms. N.G. Kamalawathie representing women who have disability, H.P.N.Lakshman representing the interests of children and youth, E.M.G. Tillekeratne, Chairman, Ceylon Association for the Mentally Retarded, Prof.Nalaka Mendis, Executive Director, National Council for Mental Health, G. Galekotuwa from NGO sector with extensive experience of Community Based Rehabilitation (CBR), Kalyananda Thiranagama, Executive Director, Lawyers for Human Rights and Development, W.H.A.Soysa, Additional Secretary representing the Secretary, Social Welfare and Ms.Yamuna Chithranganee representing Social Services. The committee is chaired by Dr. Padmini Mendis, a National and International consultant on disability. (by Nadira Gunatilleke)

From http://www.dailynews.lk/ 09/25/2002

Maldives: Gayoom Calls for "Global Partnership" to Promote Development, Protect Environment

MALE (HNS) - President Maumoon Abdul Gayoom on Tuesday called for a "global partnership" to promote development while at the same time protecting human welfare and the environment. "There is no alternative to respecting mother earth and forging a global partnership for promoting development and protecting human welfare," Gayoom told a meeting of over 100 world leaders at the World Summit on Sustainable Development in Johannesburg, South Africa. Time may not be on our side, but science and technology and wisdom can be made to be, and so can be simple common sense, said Gayoom who was appointed Vice President of the heads of state and government meeting at the World Summit on Sustainable Development which started Monday. "Like those in Noah's great ark, we are all in this together," he stressed. "We are not seeking a miracle. The world has the resources and the capability to protect our planet and promote the well-being of all humankind." Gayoom called on humanity to "put words into deeds" and to implement the action plan adopted by the Rio Earth Summit ten years ago. For that to happen, the Agenda 21, the Kyoto Protocol on climate change and the Barbados Action Program along with the Millennium Development Goals must be honored, he said. "I do believe that urgent international action, backed by a strong political will, can still save us from self-inflicted calamity," he said. Gayoom highlighted the environmental calamities occurring almost everywhere in the world today. He pointed to the worst floods over 200 years recently inundating the heart of Europe and the populous areas in Asia and South America, and the severe droughts and famine in Africa and Asia causing "untold misery to millions." "As if this was not enough, a two-mile thick cloud of pollutants, known as the Asian Brown Haze, is threatening the lives and the health of humans and all forms of life in our (South Asia) region," he said, adding that since nothing like these events has ever been on record, that surely something must be "utterly wrong." "I regret that every time I speak at a forum like this on the global environment or sustainable development, I have to express some very disturbing thoughts. Believe me, I have no other choice," he said. He elaborated that "the last ten years since Rio have been the most disappointing." The achievements are far outnumbered by the failures -- the dashed hopes, the missed chances and the empty pledges that litter the road since Rio, he said. Globalization has increased in pace and scale, with the promise that a rising tide of prosperity will "lift all the boats," the President said. "Sadly, most still remain moored to poverty, faced with the threat of sinking," he said. Gayoom highlighted that over 1.2 billion people still live in "absolute poverty", and that nearly three billion people do not have access to safe sanitation. Evidence of human induced climate change is compelling, and regrettably, the world still draws 90 percent of its commercial energy from fossil fuels, he said. He highlighted that carbon dioxide levels are now at their highest in over 400,000 years, with the 1990s as the warmest decade recorded. This has resulted in 11 percent of world's reefs now "permanently lost" as over the last century the mean sea level has risen 10 to 20 centimeters, putting low lying nations at "great risk." "Time, the most precious non-renewable resource, is running out. How long can we pretend not to see it?" Gayoom asked. "The outlook, indeed, is alarming." He said that the only question that has to be answered is "do we have the will?" "I put the question to you once again: Do we have the will?" he asked.

From http://www.haveeru.com.mv/ 09/03/2002

Nepal: State of Law and Order Will Decide Emergency Extension-- Gautam

Minister without portfolio Rishikesh Gautam said Sunday that if the law and order situation goes on deteriorating then the government would be compelled to extend the state of emergency. Speaking at a program organized by the Reporters' Club in the capital Sunday, Gautam said the government was committed to hold the forthcoming elections in a free, fair and impartial manner. There have been conflicting views in the government regarding the extension of the emergency. Prime Minister Sher Bahadur Deuba during his trip to Belgium told the EU officials that emergency would be lifted during the polls. But other Ministers in the Deuba cabinet have been hinting that the decision on emergency extension has not been made yet. The third phase of emergency declared in May came to an end on August 28. Following the expiry of emergency there have been a flurry of bomb attacks on commercial centers and politicians. The Maoists attacked a vehicle-reconditioning center in Teku Sunday morning and damaged 22 vehicles. Attacks have been there every day after the emergency lapsed last week.

From http://www.nepalnews.com/ 09/02/2002

Nepal: Move to Upgrade Criminal Justice

Head of a five member committee, Attorney General Prem Bahadur Bista, Thursday submitted a report to the government recommending a new and unified criminal offenses and procedural code. Receiving the report, Law Minister Narendra Niwang said the government will table the report in bill form in the next session of parliament. The Bista committee suggested "drastic changes in the existing criminal justice administration" in the updated code after compiling old laws and acts on criminal offenses. The Bista committee was formed last September.

From http://www.nepalnews.com/ 09/06/2002

Pak Bar Council Slams New Media Laws

ISLAMABAD: Condemning the introduction of code of ethics for the country's media, Pakistan Bar Council has said there was no need for promulgation of the defamation ordinance as it would affect the freedom of the press. "Since the remedy with regard to criminal liability was available under Sections 499 and 500 of Pakistan Penal Code, there was no need of promulgation of the proposed ordinance as it would amount to multifarious mess of laws and would also have the effect of curtailing the independence and freedom of press," PBC's Legal Reforms Committee said after examining the draft law referred to it by the government for comments. According to three ordinances, approved by the Pakistan Cabinet on Aug 31 to regulate the functioning of the press, journalists will be proceeded against libel and slander in a court of law for defamation and if found guilty would have to pay a minimum of Rs 50,000 for publishing defamatory material and undergo simple imprisonment for three months if they fail to pay it. While approving the new laws, the Pakistan government claimed that the draft of these laws related to press were approved in consultation with the All Pakistan Newspaper Society, Bar Councils, Council for Islamic Ideology, Law Ministry and Shariat Court. The PBC also condemned yesterday the Legal Framework Order by President Pervez Musharraf amending Pakistan's Constitution saying it was aimed at "perpetuation of dictatorial rule," local daily Dawn reported.It said the Committee was of the considered view that the military government had no right to amend the constitution, even on the pretext of having been empowered by the Supreme Court to do so.

From http://timesofindia.indiatimes.com/ 09/03/2002

Ordinance for Election of FATA Senators Promulgated

ISLAMABAD (PNS): President Gen. Pervez Musharraf Monday promulgated the Senate (Election) (Amendment) Ordinance 2002 paving the way for direct election of members of Senate from the Federally Administered Tribal Areas (FATA). The Ordinance is, in fact, further amendment to Senate (Election) Act 1975. The Ordinance shall come into force at once. Simultaneously, though an Order No. 25 of 2002 Chief Executive has enjoined upon the candidates from FATA for the Senate to qualify the Article 62-63 and all other legalities and moralities to become member of the august upper house parliament.

From http://www.paknews.com/ 09/10/2002

Implementation of Industrial Laws Ensured-Dawood

LAHORE (PNS): Federal Minister for Commerce and Industries, Abdul Razzak Dawood has announced that government has planned to set up a compliance initiative board to ensure enforcement of laws relating to industry, commerce, imports and exports in letter and spirit saying that the work on the plan is underway on fast track basis. He was addressing a press conference on Thursday in the office of Export Promotion Bureau. He informed that the objective behind the establishment of the board is to prepare the departments concerning industries, commerce and exports to face the situation resulting from the full fledged implementation of WTO at the outset of 2005. The board will create awareness among the concerned quarters about the laws, he remarked. He maintained that the leading multinational companies deal with those Pakistani companies which are abiding by the laws of international standard. This is the need of the hour that the maximum factories should enforce these laws to boost the exports of the country, he stressed. About the composition of the board he said that it would comprise representatives of garments, leather products and other industries in addition of representatives of labor ministry, environment ministry and interior ministry. He held that all the quotas will be abolished after January 1, 2005 to create the congenial atmosphere for export competitiveness in the country. All the companies will be out to ensure improvement in the quality of their products at that time, he noted. This can be possible only if these laws are enforced, he pointed out. Responding to questions from journalists he said that the representative of the interior ministry has been included in the board in the face of the launching of custom trade partnership in US in the wake of possible terror attacks. The participation of interior ministry is must to meet this requirement, he indicated. When asked the impact of enhancement in exports on the life of common man he said that it is creating more job opportunities for the people adding that government was taking positive steps to ensure bolster up exports.

From http://www.paknews.com/ 09/13/2002

SC Asks NAB to Obey Law

ISLAMABAD (PNS): The Supreme Court on Wednesday expressed dismay over approach of the National Accountability Bureau (NAB) towards the disposals of appeals in accountability references. A bench, comprising Justice Munir A Shaikh, Justice Iftikhar Muhammad Chaudhary and Justice Faqir Muhammad Khokhar, took strong exception to the assertion by NAB counsel Afzal Siddiqui that the remissions in prison sentence to an accused could not be given. Senior advocate Akram Sheikh appeared on behalf of Khan Muhammad Mehar, who has been awarded 10 years rigorous imprisonment and Rs 140 million fine in an accountability reference. He submitted before the court that the petitioner had already served out his sentence and he was before the court only for the suspension of punishment of fine. The counsel for the NAB opposed the contention of the petitioner's counsel and submitted that Mehar had only served two years RI and it would be a mockery of the law if he was released now. He further submitted that the petitioner was also not entitled to any remission in the sentence. When Justice Munir A Sheikh observed that the petitioner might be given remissions before the promulgation of the presidential ordinance that barred such remissions, the NAB counsel submitted that even those remissions were not allowed to the petitioner. To this Justice Munir A Shaikh said the court will not allow such approach by the NAB. Justice Shaikh added that when the Federal Investigation Agency (FIA) was created by late Bhutto, people out of fear used to say that anyone whose case went to the FIA was bound to lose his life and now it was the same impression about the NAB. He said that the court had given its judgment about the FIA that it was an investigation agency and it was not entitled to punish the accused persons. Justice Shaikh observed if remission in sentence is allowed under the law then it must be given. The NAB counsel unconditionally withdrew his comments. Justice Sheikh said that if NAB wanted to keep the petitioner in jail then it should file a petition for the enhancement of the sentence. He further took note that appeals in accountability cases were not being heard by the high court benches. He also questioned as to why there are only two benches at high court that sit only for two days. Justice Faqir Muhammad Khokhar observed that delay was also caused by the appellants. Justice Iftikhar Muhammad Chaudhary said that special benches could be created for quick disposals of appeals. Justice Khokhar observed the apex court can also monitor the progress of disposal of cases on these benches. The court asked the NAB counsel to come up with the calculation of remissions with the help of jail authorities on next hearing on September 25.

From http://www.paknews.com/ 09/19/2002

Cabinet Approved Labor Policy, IRO 2002

ISLAMABAD: The Cabinet Saturday approved the Labor Policy 2002 and the Industrial Relations Ordinance 2002. It is almost after a period of three decades that a new labor policy has been approved and the most important legislation governing the industrial relations within a country has been revised. The IRO are important milestones in the overall reform agenda of the present government. The Labor Policy 2002 and the Industrial Relations Ordinance (IRO) have been finalized after evolving consensus through extensive dialogue with all stakeholders including workers, employers, Provincial Government and various Federal Ministries/Division. The main thrust of the present policy is to replace the traditional adversarial relationship with a mutual trust relationship between the employer and employee. Therefore, it focuses on strengthening bilateralism through promotion of social dialogue and supporting bilateral bodies such as Workers Employers Bilateral Council of Pakistan (WEBCOP). The highlights of the policy and action plan are to consolidate and simplify labor laws, human resource development through vocational training, addressing occupational safety and health issues, provision of improved social safety net to workers and quality education to workers' children, combating child labor and bonded labor and inter-ministerial coordination to address the challenge of globalisation. The revision of the Industrial Relations Ordinance 1969 as Industrial Relations Ordinance 2002 is a significant step towards the rationalization and simplification of labor laws envisaged in the agenda of the Labor Policy. IRO 2002 has been drafted in the light of input received from all stakeholders, most importantly the workers and employers.

From http://www.paknews.com/ 09/22/2002

Legislation for Reforms in Universities Approved

ISLAMABAD (PNS): Federal Cabinet on Saturday accorded approval for enactment of laws to introduce reforms in the universities across the country. The meeting of the cabinet was held here under President General Pervez Musharraf and was attended by all the four provincial governors. The cabinet decided that restructuring of all the universities in public sector will be carried out and new laws will be formulated in this regard. A new model university ordinance will be promulgated for all the universities at central and provincial level. The steering committee for higher education will ensure implementation of the plan to be worked out in this direction. Briefing reporters about the meeting, Minister for Science and Technology, Dr Atta-ur-Rehman said the president wants that there should be improvement in the prevailing conditions of the universities and reforms are inevitable to achieve this end. About increase in the financial grant to universities he said that it has been increased from Rs 1 billion to Rs 8 billion. The powers of vice chancellor and the administration have been divided, he added. Giving more details, he said that a board comprising sixteen members would be set up for the appointment and dismissal of the Vice Chancellor. The whole educational system will be streamlined therefore, University Grants Commission has been abolished Higher Education Commission constituted. Commenting on Model University Ordinance he said that under this ordinance, the autonomy and independence of the universities will be ensured besides creating an environment for the promotion of standard and higher education. The vice chancellor will be vested with more powers and he or she will also act as the Chief Executive, he remarked. Spelling out the characteristics of the ordinance he said that following the promulgation of this ordinance a change will set in the educational condition of the students and standard of the education. It will lead to improvement in the condition of the teachers and the administration of the universities, he continued. Chairman Steering Committee for Education, Shams Lakha said that the cooperation extended by the federal ministers, governors and vice chancellors in suggesting the steps to ensure promotion of higher education is highly appreciable. The Education Minister said informed that additional seven billion rupees will be spent on the universities in the next three years and government will meet all the expenses of universities functioning in the public sector. The universities will have to face no difficulties in fulfilling their requirements owing to enhancement in funds and these will be able to continue their educational activities in conducive environment, he assured. Regarding the appointments and other matters of the universities he said that all the appointments in the universities would be made on merit and in transparent manner. The salaries of the teachers will be determined in conformity with their performance, he disclosed. Pleading the merits of the reforms he said that reform government is bringing in will benefit the students and government will extend financial assistance to the deserving candidates' aspirant for seeking education. They will be provided equal opportunities to seek education with other students. He held that the needy students would be granted scholarships adding that the funds have been allocated for this purpose. Government will meet their tuition fee and expenses on the books and other expenditures. The students access to the career management, jobs and industries will be ensured for the first time. He maintained that the research activities would be promoted which have been earlier neglected. Research Endowment Fund will be set up in this regard which will work under Higher Education Commission, he revealed. In order to improve the working of the sate- run-newswire agency Associated Press of Pakistan (APP), the Federal Cabinet Saturday approved its up-graduation as corporation. The Information Board with Federal Information Secretary as chairman will run the affairs of the Corporation. The Board will consist of ten members including five from the government and five from the private sector. Secretary Information Anwar Mahmood told the media men in the PID Media Center that every effort would be made to improve the efficiency of the Agency internally and externally.

From http://www.paknews.com/ 09/22/2002

Pak Passes Freedom of Information Ordinance

ISLAMABAD: Pakistan has passed a Freedom of Information ordinance, 2002 that seeks to ensure improved access to public records and public accountability besides approving independence and autonomy for the state-owned new agency, Associated Press of Pakistan (APP). The federal cabinet met here on Saturday and approved the Freedom of Information ordinance, 2002, which requires each public body to ensure that all records are kept properly and the public provided access to them. According to officials, the Cabinet chaired by President Pervez Musharraf also approved the conversion of the Associated Press of Pakistan (APP) into an autonomous corporation to streamline, improve and enlarge it as a public information medium. Under the new structure, APP would be managed by a Board of Directors with five members each from the public and private sector. The secretary of Pakistan's Information department would chair the Board, which would also include media professionals, academics and President of CPNE, the apex body of Pakistan Newspaper management. The acts and subordinate legislation, such as rules and regulations, notifications, by-laws, manuals would be duly published later, the officials said.

From http://timesofindia.indiatimes.com/ 09/22/2002

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Central Asia: Militarization Could Come at Cost of Regional Stability

The international war against terrorism has resulted in the countries of Central Asia focusing more on military preparedness and increasing their military cooperation with the U.S., Russia, and China, among others. While this is viewed by many as a necessary response to immediate threats, RFE/RL examines whether this militarization could contribute to the destabilization of the region in the long term. Prague, 3 September 2002 (RFE/RL) -- The states of Central Asia are modernizing their militaries as part of the global campaign against terrorism. Uzbek President Islam Karimov was quoted by Interfax last week as telling journalists that he plans to cut the country's armed forces by up to 15,000 men by 2005 to create what he described as a more "mobile and highly professional" army. The move followed Kyrgyzstan's plan to complete the process of forming an entirely professional army over the next two to three years. In early August, the Kazakh Defense Ministry announced that Washington will be providing financial assistance to help modernize its military, while the U.S. ambassador to Tajikistan said Washington plans to provide training to the Tajik Army. For the most part, this modernization is taking place with outside assistance, from the U.S., Russia, and China, in particular. These countries are investing tens of millions of dollars in the region not only as part of the war against terrorism but also to realize their own economic and geopolitical interests. But analysts say this military buildup could come at a cost to regional stability and to the resolution of long-term problems, such as poverty. Stephen Blank is a professor of national-security affairs at the Strategic Studies Institute at the U.S. Army War College in Pennsylvania. Blank noted the military cooperation the Central Asian governments are receiving from a variety of suitors. "You have the growing effort among Central Asian states to build larger militaries to deal with terrorism and to spend much more money as a result on militaries, and thus to get training and assistance and advice from a number of states from NATO, from the United States, in particular, [and] from China. Obviously, the Russians are also trying to build military linkages to Central Asia," Blank said. Blank said that in many cases, the motives for providing this military assistance are as much economic as geopolitical. "Russia is selling weapons to Central Asia in a way to subsidize its own defense industry and to try to re-establish a unified defense-industrial sector throughout the entire former Soviet Union. The Russians are so desperate to sell weapons to anybody that they are selling the weapons to Central Asia at below the cost of production," Blank said. Moscow, which maintains 20,000 troops in Tajikistan, is eager to revitalize its military ties to the region. Russia and Tajikistan are negotiating a plan to establish a military base for Russia's 201st Division near Dushanbe. Kyrgyzstan and Russia signed an agreement in June on the status of Russian military personnel, as well as a memorandum on the leasing of Kyrgyz military facilities. The U.S., however, is challenging Russia's historical influence in the region by also nurturing close military partnerships with the Central Asian states. Uzbekistan and Kyrgyzstan are providing military bases for use by U.S. troops supporting operations in Afghanistan, while Kazakhstan and Tajikistan have opened their airspace. China is also providing military assistance to Kyrgyzstan, Uzbekistan, and Kazakhstan, Blank said, while also seeking to prevent them from assisting Uighur separatists in the western Chinese province of Xinjiang. Kazakhstan and China reportedly signed in March an agreement under which Beijing will provide the Kazakh armed forces with $3 million worth of assistance, including communications and special-forces equipment. Alex Vatanka is editor of "Jane's Sentinel: Russia and the CIS," a security-assessment publication based in London. Vatanka believes the increased militarization in the region is also a result of a need by the Central Asian states to strengthen their own military forces. "There is that fundamental need [by the countries of Central Asia] to create indigenous armed forces, not necessarily so much in terms of arms production but at least in creating a coherent and effective, or at least functional, armed forces with proper doctrines," Vatanka said. The militarization of the region comes at a cost, however. Analysts note that an emphasis on military solutions to the region's problems with terrorism, such as that posed by the Islamic Movement of Uzbekistan (IMU), removes the focus from the underlying causes for the extremism. In the case of Uzbekistan, Vatanka said, "In the long term, the issue of how you spend the nation's resources is obviously going to be a problem for President [Islam] Karimov to consider because, on the one hand, he's trying to pacify the IMU and the grassroots support for the IMU on the ground, while at the same time not really tackling the issues that lead to increased support for the IMU, i.e., poverty." Analysts say more weapons in the region could increase the likelihood that countries would resort to the military option in border or water disputes, for example. "I can't really see any of the Central Asian states having any, for instance, say, territorial ambitions that could lead to interstate conflict in the region. But you cannot discount the possibility that one day there could be issues that could lead to conflict within these Central Asian states," Vatanka said. For example, the International Crisis Group, based in Kyrgyzstan, recently noted in a report that Uzbekistan carried out military exercises that looked to some in Kyrgyzstan like practice runs aimed at capturing its Toktogul water reservoir by force. Blank spoke to RFE/RL about the dangers of militarization in the region. "First of all, [this is] an attempt to put a priority on military solutions to political problems, and placing the priority on military threats, which unfortunately is the case. And you see this in a variety of ways. Of course, there's the war on terrorism, which is a response to the terrorism and insurgency that you've had in Central Asia if you're going back to 1999. That's the most obvious case. But others are Iran's attempts to use gunboat diplomacy in the Caspian, and Russia's rejoinder by its massive military exercise in the Caspian, which is clearly targeted, among other things, at Iran," Blank said. Blank also pointed to the possibility that military assistance and arm sales to Central Asian governments will be used for the purposes of domestic repression. He also said the flow of weapons and money into the region's defense sectors will only add to the so-called "Kalashnikov culture," in which many members of the region's armed forces, police, and government are believed to be involved in corruption, especially the drug trade.

From http://www.rferl.org/ 09/03/2002

Eurasian Economic Community Premiers Fail to Agree on Joint Customs, Tax Policies

At a meeting in Astana on 20 September, the prime ministers of Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan failed to reach any agreement on the introduction of a single import tariff and other measures aimed at speeding up economic integration between their countries, RFE/RL's Kazakh and Kyrgyz services and Interfax reported. Tajik Premier Oqil Oqilov expressed his disappointment at the stalemate, arguing the "urgent need" for a transportation union among the five states. Russian Prime Minister Mikhail Kasyanov suggested that using Russian rubles rather than hard currency in trade between the five countries would accelerate economic integration, Interfax and akipress.org reported.

From http://www.rferl.org/ 09/23/2002

Council of Europe Sets Deadline for Armenia to Abolish Death Penalty

A Council of Europe delegation that recently visited Yerevan set a deadline of June 2003 for Armenia to ratify Protocol No. 6 of the European Convention on Human Rights, parliament Foreign Relations Committee Chairman Hovhannes Hovanisian said on 12 September, RFE/RL's Yerevan bureau reported. That protocol bans the death penalty in all circumstances except in times of war. The Armenian parliament passed amendments earlier this summer to the Criminal Code that would allow for handing down the death penalty for crimes committed before the amendments came into force (see "RFE/RL Newsline," 21 and 25 June, 8 and 9 July, and 22 August 2002). The move was made in response to public pressure to execute the five gunmen who shot dead eight senior officials in the Armenian parliament in October 1999.

From http://www.rferl.org/ 09/13/2002

New Azerbaijani Directives on State Secrets Amended

President Aliev has ordered the Azerbaijani government to draft within one month a new law on state secrets, zerkalo.az reported on 13 September. Aliev has also amended the controversial directives issued last month aimed at precluding publication of information that contains state secrets (see "RFE/RL Newsline," 29 August and 3 September 2002). Specifically, Aliev shortened from seven days to 48 hours the period within which a specially created commission must respond to media outlets' queries as to whether specific information constitutes a state secret. He also abolished that commission's right to demand that editors disclose on demand the source of their information.

From http://www.rferl.org/ 9/13/2002

Azerbaijan: Journalists Clash with Government over New State-Secrets Decree

The publication of a new presidential decree on state secrets at the end of August led to immediate protests from journalists in Azerbaijan. The decree, a supplement to the country's six-year-old state-secrets law, raised concern on three counts. First, critics say, it required journalists to ask a presidential commission whether or not sensitive material is a state secret before publishing it. The commission has a week to respond, which journalists say is another problem, since articles could cease to be timely if the media has to wait seven days before publishing. Perhaps the greatest worry is that the decree appeared to give the commission the right to demand that journalists reveal the sources of their information. Following a meeting between government representatives and journalists recently, President Heidar Aliev today issued a new decree that looks like a partial victory for the press. For starters, the decree shortens the committee's response time to 48 hours. Perhaps more importantly, it clarifies that the committee can only request, not demand, that journalists reveal their sources. John Boit is director of the Baku office of Internews, a U.S.-based nongovernmental organization working with the media. He said he is still concerned about the original decree, which he said could have a "chilling effect" on journalism in Azerbaijan. "It is a step toward self-censorship, at the very least, and full censorship, at the very worst. If a journalist has to come to the government to ask permission to print something, I think that that is already an affront to free media, and so that absolutely cannot be allowed," Boit said. Arif Aliev, the head of the Yeni Nasil (New Generation) Journalists Union, said the decree will make it "very difficult for journalists to work." Aliev said the government's official list of subjects that could be considered state secrets is too broad, and includes everything from military and security issues to communication, transport, and economic and trade matters. The union leader said journalists understand that governments have a legitimate need to protect state secrets, but added that it is not the media's job to guard them. "We accept that there are state secrets, that governments should have their secrets. But the government itself must keep those secrets. That is their responsibility, and in this [decree], the responsibility was partially transferred to journalists," Arif Aliev said. The government's top legislative expert said the media's fears are overstated. Shahin Aliev, who directs the Department of Legislation and Legal Expertise in the Office of the President, said the decree may actually make journalists' jobs easier. The decree does not impose new restrictions on journalists, he said, but gives them new rights. "First of all, this new regulation [does] not create any obligation for the journalists. There are not any obligations. If [a] journalist [has] any doubt that this information may be [a] state secret or maybe not, he [has] the right to appeal to this special commission, the state-secrets commission. But if journalists are sure that this information [is] not [a] state secret, or if he knows that it is [a] state secret and he wants to publish it, nobody can stop it. And [in] this case, he will have full responsibility," Shahin Aliev said. Shahin Aliev met leading journalists soon after the presidential decree was published to try to allay their fears. He said the edict does not give the state-secrets commission the legal power to demand that journalists reveal their sources. "I explained to the journalists that it is just [a] moral obligation, it is not [a] legal obligation. The mechanism which exists in the decree is a kind of goodwill from the journalists' side. Of course, journalists can refuse to [reveal] their sources, and in this case, the commission will appeal to the court," Shahin Aliev said. The new edict issued by President Aliev turns that clarification into law. President Aliev's decree today also orders the cabinet to draft a new law on state secrets in order to comply with Azerbaijan's international obligations. The cabinet is also rewriting the list of subjects that can be considered state secrets, Shahin Aliev said. Both documents should be ready within a month. Such promises do not reassure Boit of Internews. "I am still very wary of any list of state secrets, and I think it also depends on the wording of a document like that. If it's still very broad wording, then still that document could be used against journalists in cases where, for instance, information would not normally be considered a state secret. So I am still very, very concerned about the list of state secrets and how that could be used and applied against journalists." Local journalists, too, are keeping a close eye on the progress of state-secrets legislation. One media union is planning to demonstrate outside the president's office on 16 September. Arif Aliev of the New Generation union, for his part, said complaints from journalists and international organizations have kept the decree from being implemented so far, but that if it does go into effect, the union will appeal for help from international organizations and join the protests, as well. (by Richard Allen Greene)

From http://www.eurasianet.org/ 09/15/2002

Iran's President Fights Right Wing with New Laws

In a dramatic move drawing attention throughout Central Asia, Iranian President Mohammad Khatami submitted two bills to Parliament on September 24 that could curb the political power of Iran's clerics. The first bill will expand the President's constitutional powers at the expense of the clerics' veto power. The second would make elections more direct. The embattled Khatami pledged in an August 30 press conference that he would take a new approach to his feud with clerics and their right-wing sympathizers in Parliament. "I am announcing today that the President must be able to perform his duties within the framework of the constitution," he said at the time. Maneuvers by the Parliament have stalled Khatami's efforts to broaden Iranian democracy, reformists say. The president himself said he had made his decision to introduce the two bills after his warnings had been repeatedly ignored by the conservatives. In his press conference, Khatami singled out the hard-line Guardian Council, a 12-member watchdog group appointed by the country's Supreme Leader or Ayatollah, for a showdown over the two bills. "The Guardian Council should not reject the bills because they are logical and none of them are against the Constitution or the Islamic law," he said, "unless it intends to violate the Constitution." He said he had repeatedly warned them of the violations, but "unfortunately I have had no success," he added. "My warnings have been ignored, and the president's duties, which are clearly stated in the Constitution, have been suspended." Observers say this is the first time in Khatami's two-term presidency that he has so explicitly and forcefully confronted his opponents. According to parliamentarian Elahe Koolai, who supports the bills, Khatami is basing his strategy on article 113 of the constitution. The article, which states "it is the President's duty to ensure the implementation of the constitution and the prevention of its violation," may leave a reformist president with few other tools. According to Koolai, since no mention is made of how a president can stop the putative violations, obstructionists have been able to thwart the democratic process. Guardian Council spokespeople have openly said that no reformist candidate will be able to enter the next parliamentary elections in 2004. The Guardian Council has also effectively vetoed a broad category of laws that would have sharpened secular power. Many legal and constitutional experts agree that one of the Iranian constitution's primary tensions comes from its dual power structure, which invests political power in both the democratically elected president and the cleric-appointed Guardian Council. The constitution says it bases itself on the need to submit to God's commands, which would seem to imply that holy men enjoy extensive authority. If the secular president's bid to expand his powers succeeds, or if the Guardian Council blocks it, the political stalemate between reformists and traditionalists figures to change dramatically. If the first bill passes, the president would be able to fire the head of Parliament or of the judiciary. If it fails, judging from earlier remarks he has made, Khatami might seek other alternatives, up to and including resigning his post. Leaders of the reformist-dominated Parliament mentioned referendum and mass resignation as other options under consideration. Though Vice President Mohammadali Abtahi strongly defended the bills shortly after presenting them to parliament, some conservative outlets had condemned them before September 24. The rightist Kayhan News called the president's "new approach" a "dangerous precedent for the country. Surprisingly, some writers invoked the idea of American influence, even suggesting that the United States' Central Intelligence Agency had a hand in drafting the bills. American President George W. Bush branded Iran part of an "axis of evil" in January, and his government has declined to speak supportively for Khatami in his battle with the rightists. Most reform parties have come out in support of the bills, with the Islamic Iran Participation Front showing particular enthusiasm. The president's younger brother, Mohammed Reza Khatami, leads the party, which dominates the reformist wing. Members of the reformist party, after imprisonment of their colleagues and seizure of their publications, had promised a showdown with conservatives in coming months. Speaking to news organizations on September 24, the younger Khatami again warned that the reformists might "leave the Establishment" if hard-liners block the presidents' proposed bills. The Islamic Iran Participation Front has failed to fulfill its promises in the face of the unified conservative bloc, severely straining the reformists' popularity. They are hoping that the president's new combative mood will bring new vitality to their cause. Though the bills will probably clear Parliament, it is hard to predict where they will go. Some pragmatic members of the right have not spoken out against the bills, perhaps biding time until Khatami's term ends or the population grows disgusted with legislative wrangling. Months may go by before the Guardian Council deliberates, rejects and returns the bills to Parliament for revision. The Expediency Council and the Supreme Leader, both tied to the Right, have every constitutional right to weigh in and prolong the process. Many conservative leaders are now favoring this path, believing it will defeat Khatami's effort at little political cost to themselves. In that scenario, Khatami would have to ramp up his confrontation with conservatives, and observers do not know if his political will is large enough for that challenge. Events beyond Iran may also affect the public appetite for reform. If the United States or United Nations begin attacks on Iraq or if tensions escalate between Tehran and Washington, the conservatives may seize whatever political advantage Khatami's boldness has given to the reform movement.

From http://www.eurasianet.org/ 09/24/2002

President Objects to an Item of the International Convention on Terrorism

Today, on 11 September at a plenary session of mazhilis the deputies agreed unilaterally with the president's objections concerning the law "On Kazakhstan joining the international Convention against financing terrorism", KZ-today correspondent reports from Astana. Nursultan Nazarbaev, president of RK, forwarded a letter to the Parliament, in which he supported the necessity of joining this Convention. At the same time the head of state observed that separate provisions of the Convention do not fully comply with the national interests of the Republic. In particular, to protect the interests of the country the president proposed to add the following item to the law "On Kazakhstan joining the international Convention against financing terrorism": Kazakhstan does not consider itself restricted by provisions of item 1, article 24 of international Convention against financing terrorism. Item 1, article 24, provides that in the case of a dispute between the Convention member countries concerning interpretation thereof, which cannot be settled by means of negotiations, it will be resolved in arbitration. In the case that the dispute is not settled within 6 months, any of the parties can apply to international court. President of RK considers that, taking all obligations against financing terrorism, Kazakhstan must have an opportunity to settle occurring disputes not only through the court, but by means of negotiations as well. Passing of international Convention against financing terrorism provides a legal basis for international investigations, arrests and court persecutions of individuals, involved in financing terrorism. Today around 40 countries of the world have signed the Convention. After discussing the president's proposal by the mazhilis deputires it will be considered in the Senate and the final decision must be made at a joint session of both chambers of parliament.

From http://www.gazeta.kz/ 09/11/2002

Kazakhstan: International Compromise Sought on Investment Law

A new version of Kazakhstan's proposed investment law shows the results of long negotiations with foreign companies and an effort to compromise on their most serious concerns. The latest draft of investment legislation, published this week by the American Chamber of Commerce in Kazakhstan and the U.S. Commerce Department, suggests that Astana is trying to calm a controversy that has troubled foreign oil companies for over a year. After 15 months of debate, Kazakhstan is continuing to craft an investment statute that would limit breaks for foreign firms that were granted under 1994 legislation in the early days of independence. The new law, which has passed through countless drafts, has been bogged down for months. Officials have argued that changes must be made to curb unfair advantages for foreign companies and create opportunities for Kazakh businesses. But investors are concerned that the law could be used to reopen their contracts and bar access to international arbitration for disputes. The 1994 law allowed foreign investors to take disputes to international arbitration bodies, if they chose to do so. But last year, the government proposed that disputes should be transferred outside Kazakh courts only with the consent of "the state body." In February, a group representing foreign companies appealed the entire draft law to the International Center for Settlement of Investment Disputes, Kazakhstan television reported. The latest version of the law, dated 19 June, tries to finesse the issue, saying that "the settlement of disputes shall be carried out...at courts of the Republic of Kazakhstan, as well as at international arbitration courts as agreed by the parties." It does not say specifically that state approval would be required for any international appeal. Instead, the language leaves it open to interpretation by making it vague as to whether agreement is needed only on the choice of international courts. The phrasing varies only slightly from the original April 2001 version that met with protest. The issue has been followed closely because of Kazakhstan's success in attracting some $15 billion in cumulative investment, primarily to the country's huge petroleum fields. But as the country's success has grown, so have the doubts. Since last year, the government has pursued a series of complaints against foreign oil majors, saying that some have done too little local hiring and contracting, while others have broken environmental rules. Kazakh officials also point to generous investment "preferences," such as tax and customs breaks, that were written into early contracts. They argue that big companies are now making excess profits because Kazakhstan has since cut its tax rates for all firms. But Kazakhstan has also created a powerful monopoly called KazMunaiGaz to manage all its oil, gas, and transit interests. Analysts believe that the draft law is aimed more at gaining power over the growing oil business than distributing wealth. Many foreign companies have quietly renegotiated their contracts under pressure to give back some of their more generous incentives. But they have also insisted that the new law must not compromise "contract stability." The latest draft would limit any new tax preferences to five years. In recent months, President Nursultan Nazarbaev and Foreign Minister Qasymzhomart Toqaev have repeatedly pledged that existing contracts will remain intact. But concerns have remained about provisions that would make it easier to nationalize property or override contracts, or to deny recourse outside Kazakh courts. Under the draft law, contracts could be altered in cases of new international treaties or laws enacted "in order to provide national and ecological security, health care, and ethics." It does not define or limit the terms. Doubts about legal protections have been aggravated by recent trials of dissidents and closing of newspapers in the worst rash of repression in the past decade. Speaking last week in Astana, the president of the European Bank for Reconstruction and Development, Jean Lemierre, praised the investment environment but added that "the practice of passing laws in Kazakhstan has provoked a number of questions among investors," according to Interfax. Lemierre spoke following a meeting of a foreign investors' council. In response to questions about the rule of law, Nazarbaev said: "Naturally, I am sad that there has been talk recently that the pace of democratic reform in Kazakhstan is slowing down. I don't think that is the case." He added, "There is no way that Kazakhstan is going to turn away from democratic reforms, because this is the way that Kazakhstan has selected as the way of its economic and political development." Although business and democratic rights are often dealt with separately, investors are likely to become uneasy with the recent trends in Kazakhstan because both are affected by the balance between legal protections and government power. In the case of the draft law, vague language may not be reassuring in an environment which seems to be protecting power at the expense of legal rights.

From http://www.eurasianet.org/ 09/14/2002

Draft Law on Computerization

A working group of mazhilis of parliament of RK started considering the draft law on computerisation, KZ-today was advised in mazhilis press service. Discussing this draft law by the government is due to the development of national IT & T infrastrusture and Kazakhstan's entry into the world information system. This document is the first normative legal act in this area. Especial emphasis in the draft law was made to define status, types, order of forming and using information resources.

From http://www.gazeta.kz/ 09/17/2002

Draft Law on State Regulation of Oil Production

Tomorrow, on 24 September within the Committee for economic reform and regional development, the working group of mazhilis of RK will start considering the draft law on State regulation of oil production and turnover for separate oil products, KZ-today was advised by mazhilis press service of RK. According to the press service, Zeinulla Kakimzhanov, minister of finance is supposed to participate there.

From http://www.gazeta.kz/ 09/23/2002

New Law Envisages Transparency of Statistical Data

The ninth session Oliy Majlis (Uzbek Parliament), second convocation, will consider the new edition of the Law on State Statistics, Narodnoe Slovo reported. The existing law was adopted in 1993. According to Tamara Rogoznikova, deputy head of State Statistics Department under the Macroeconomics and Statistics Ministry, within the past nine years ownership forms in the national economy and management structure have notably changed, new relations between government bodies and private sector have emerged. The state statistics should become an obligatory element of the society's information system and provide the economy and the public with data on real economic situation. Development of the new law is also one of conditions of Memorandum on economic and financial policy issues signed between Uzbekistan and the International Monetary Fund in December 2001. According to Roznikova, the new bill determines organisational order of state statistics and regulates legal relations concerning gathering, generalisation, distribution and storage of statistical information on social and economic situation of the country. The law determines the obligatoriness of a systematic development of a long-term programme of statistical work with indication of strategic directions of statistical activities. The law provides creation of Statistical Council under authorised state statistics body. It can include representatives of ministries, departments, scientific and business circles and the public. The structure will serve to provision of statistical information to users, increase of efficiency and trust of statistical system. The bill outlines main principles of functioning of statistics system in accordance with recommendations of the UN Statistics Commission. These are principles of reliability and objectivity of statistical data, openness of statistical information, its availability and equal opportunity for all users to receive statistical data. An important principle is also to observe transparency in statistics - all methods used for gathering information and calculations should be open. The bill has been worked out with consideration of the principle of confidentiality of statistical data (prohibition of disclosure of information supplied by respondents to statistics organs). All data submitted by economic subjects can only be used in statistical purposes for preparation of statistic reports. While elaborating the bill Uzbek experts took into consideration the expreience of foreign countries, model law of Eurostat (statistical body of the European Union), as well as recommendations of the International Monetary Fund and the World Bank.

From http://81.29.68.227/ 08/28/2002

Uzbek Deputies Developing New Laws on Civil Society

More than 10 laws regulating development of civil society will be renewed and developed in Uzbekistan, Narodnoye Slovo reported. Such decision has been adopted at the session of sub-commission for civil society of the Oliy Majlis (parliament) Commission for democratic reforms and civil society. Seven working groups have been created for preparation of bills and renewal of existing laws.

From http://81.29.68.227/ 09/17/2002

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Australia: Justices Hammer Tampa Laws

THREE High Court judges lashed out yesterday at the Howard Government's tough new post-Tampa laws, arguing that they interfered with the court's independence. "We are here to do justice and you want to take that away from us," Justice Michael Kirby told federal Solicitor-General David Bennett QC, representing the Government before the court. Mr Bennett was responding to arguments from lawyers for the wife of asylum-seeker Ali Bakhtiyari and another man, that new laws banning appeals to the High Court against immigration tribunal decisions were unconstitutional. While it is difficult to predict the final positions the seven judges will take, the reservations expressed yesterday suggest the Government's asylum-seeker strategy could be dealt a major blow by the nation's highest court. One senior legal observer described the exchanges between the judges and Mr Bennett as "the biggest bunfight between the executive and judiciary the High Court has seen for years". The Government has accused asylum-seekers of using appeals to the Federal and High courts to delay their deportation. In the lead-up to last year's federal election, the Coalition - with Labor's support - inserted clauses in the Migration Act specifying that decisions of the minister, department or tribunals "must not be challenged, appealed against, reviewed, quashed or called in question in any court". Justice Michael McHugh said yesterday the Constitution banned parliament from "legislating so as to unreasonably interfere with the judicial power of the commonwealth". "This is the Constitution we are dealing with . . . it's not a Dog Act," he said. Justice Mary Gaudron demanded to know why the new laws banned the High Court and its judges from identifying parties in immigration cases, when the same provision did not extend to news reporting. Justice Gaudron's judgment is likely to be her last before she leaves the court in February. Given the high-profile nature of the cases, and the public's right to know and understand her decision, Justice Gaudron said, she "might find it sensible, practicable, desirable to use the names of these people in my judgment". "Can you give me a note (explaining) by what power the Government can direct me about how I may write my judgments?" she asked Mr Bennett. "For my part, I can see no power of the parliament to direct me." Roqia Bakhtiyari's lawyers argue that the post-Tampa laws breach section 75(v) of the Constitution, which allows people to seek judicial review of ministers' decisions in the High Court. The new laws also place a 35-day time limit on any immigration appeals to the High Court. Experts argue the time limit was placed in the Migration Act in case the High Court ruled it could still review immigration decisions. But Justice Kirby said the 35-day limit in effect deprived visa applicants of their rights to go to the High Court. Many asylum-seekers could not speak English, were in detention and could not readily access lawyers and, when they did, received poor advice, he said. "We've had enough cases to know that happens," Justice Kirby said (by Benjamin Haslem).

From http://www.theaustralian.news.com.au/ 09/05/2002

Howard Defiant on Kyoto Rejection

Prime Minister John Howard has remained defiant over Australia's refusal to ratify the Kyoto Protocol in the face of strong criticism after China, Russia, India and Canada promised to sign on. Mr Howard said yesterday he remained unconvinced that ratifying the legally binding agreement to limit greenhouse gas emissions was in Australia's best interest, although he left open the possibility of changing his mind over the next few months. But senior government advisers said it was highly unlikely that Australia would sign the protocol in the near future. They dismissed suggestions that the government had shifted its stance, pointing out that Mr Howard had always reserved the right to ratify it in future if it was seen to be in the national interest. But at this stage, ratifying the protocol is seen by the government as imposing the risk of economic penalties on resource exporters, which would not be faced by other countries signing it, such as China and India. Although those countries agreed to ratify the protocol, as developing countries they have not been given specific targets for limiting greenhouse gas emissions, whereas Australia as a developed country would be given a legally binding target and would face penalties if it was breached. Mr Howard said Australia's refusal to sign was based on "our own independent assessment of our national interest" and in any case Australia was already close to achieving the targets. He vehemently denied Australia was opposed to ratifying the agreement simply because the United States was opposed to it. The agreement, which would limit Australia's greenhouse gas emissions to 108 per cent of 1990 levels on average over the period 2008 to 2012, is now almost certain to come into force after Russia, Canada, China and India at the Johannesburg Earth Summit this week signalled their intention to ratify it. The previous opposition of these countries has been a stumbling block to the protocol being widely accepted as an international benchmark. Mr Howard has also cited this and US opposition as key reasons for Australia's refusal to ratify. Australia and the US are now isolated as the only two signatory developing countries that have refused to ratify it. Defending his government's stance, Mr Howard said Australia was a net exporter of energy and ratification would mean the loss of important markets to non-signatory countries such as Indonesia. The position was condemned by scientists, environmentalists.Labor and the Democrats, who said the government had backed itself into an internationally embarrassing and environmentally irresponsible corner. Labor environment spokesman Kelvin Thomson said Australia was out of step with the rest of the world and risked missing important opportunities. Environment Minister David Kemp last night was scheduled to outline Australia's position to the summit, saying that despite the government's refusal to ratify, Australia would still work hard to meet its emissions target (by Louise Dodson, Josh Gordon)

From http://www.theage.com.au/ 09/05/2002

Tougher Laws for Violent Crime

Killers of police officers, teachers or health workers would be jailed for at least 25 years and gang rapists for at least 15 years in a get-tough strategy on violent crime launched in New South Wales yesterday. Announced by Premier Bob Carr, the moves were condemned by academics and civil libertarians as political opportunism. The proposals cover 19 serious crimes including murder, attempted murder, gang rape, sexual assault, drug trafficking and manufacture, armed robbery, carjacking and possession of illegal handguns. The reforms to the Crimes Act also demand that judges hand down these minimum sentences or publicly justify their reasons. The amendments also pave the way for the creation a NSW Sentencing Council, based on a British model, that would monitor sentences handed out by courts and "make sure they meet community expectations". Mr Carr said the standard minimum sentences would give courts instructions about the lowest penalty expectations, but allow judges to state their case for sentencing deviations, depending on the circumstances. "Judges will have to hand down this sentence unless there are aggravating or mitigating factors that require a higher or lower sentence," Mr Carr said. "This avoids the fatal flaw of mandatory sentencing, it makes sure a battered wife who kills a husband is dealt with differently from the cold-blooded killer of a police officer." Last month, District Court Judge Michael Finnane jailed the 20-year-old ringleader of a gang of rapists to a total of 55 years for orchestrating attacks on teenage girls in western Sydney. Mr Carr said at the time that justice had been served and it was the was the type of sentencing the community expected. David Brown, professor of criminal law at the University of NSW, last night warned that mandatory sentences of any sort - including minimum sentencing - increased the likelihood of injustices by preventing judges from making the punishment fit the crime and taking all circumstances into account. (by Paola Totaro, Robert Wainwright)

From http://www.theage.com.au/ 09/05/2002

Water Reform Menace for States

STATES will lose millions of dollars in competition payments unless they agree to a national code on property regulations, including water rights, Deputy Prime Minister John Anderson warned yesterday. Mr Anderson said the states had failed to meet their obligations under the 1994 Council of Australian Governments agreement to reform water and other property rights, and could no longer expect to receive reform bonuses in return. He told the National Party federal council that the lack of clear rights meant investment was paralysed and new programs designed to help the environment were being stymied. Mr Anderson said changes such as the NSW Native Vegetation Act had wiped 20 per cent off the value of some properties in the northwest of NSW. But because of unclear rules, farmers could not apply for compensation. "The states do not appear to have grasped the moral and political imperative that they should be prepared to use that money, or part thereof at least, to provide compensation and adjustment assistance to the affected industries, not just spend it in their state capitals," he said. But Queensland Premier Peter Beattie said Mr Anderson was talking a "lot of rot" in claiming that Queensland and NSW favoured the cities over the regions when dealing with national competition policy payments. "It's a beat-up. It's a lot of rot. "I mean, one of the things we do is provide local governments with their payments direct," Mr Beattie said. National Farmers Federation president Peter Corish welcomed Mr Anderson's move. "The bottom line is that a clear framework for resource security would provide farmers with the certainty necessary to enable better environmental and business management of natural resources," he said. But Democrats spokesman John Cherry accused the NFF of creating a problem that did not really exist. "What is needed is proper assessment of the cost of conservation and compensation when required," he said. "But the Democrats do not believe that farmers should be compensated for what should be reasonable practice." Mr Anderson said the commonwealth would lay down a proposal for national rules at the next COAG meeting due in November. The states and territories will receive more than $700 million in bonuses for introducing competition reform under the 1994 COAG agreement. The ultimatum came as NSW Premier Bob Carr outlined his own plan for "public-private partnership" to regenerate the state's land and waterways over the next 50 years. "For farmers this means water property rights, incentive payments for healthier rivers, less regulation, freedom to meet targets in ways they think best," he said, speaking at a Labor conference in Cooma, southern NSW. "It means country people, not regulation, will be the agent of change." "It means giving catchment management boards the legislative and financial clout to fix the problem locally." (by Sid Marris, Leisa Scott and Bernard Lane)

From http://www.theaustralian.news.com.au/ 09/16/2002

ASIC Laws 'Over Top'

AUSTRALIAN business leaders have attacked a proposal to grant sweeping new powers to Australia's corporate watchdog, saying the proposal could be "unconstitutional". The powers under which the Australian Securities and Investments Commission can issue fines of up to $1 million are the most controversial reform of a corporate governance reform package announced yesterday by Treasurer Peter Costello. The package of 41 specific reforms governing auditing and corporate disclosure practices was generally applauded by business and the accountancy profession. But the lobbying to water down the ASIC-specific proposal has already started. "We are pretty concerned," said John Hall, chief executive officer of the Australian Institute of Company Directors. "This is breaking a whole lot of new territory." Mr Costello announced yesterday a proposal to allow the watchdog to hand out infringement notices for companies found in breach of continuous disclosure obligations. "ASIC would be prosecutor, judge and jury and that's to be avoided," Mr Hall said. "On the face of it, it seems to be enlarging ASIC's powers and the question must be raised whether it is constitutionally enforceable." Continuous disclosure requires that companies keep all investors fully informed on good and bad news, so investors can buy and sell company shares in good faith. But in the past 12 months tales of insider knowledge in which directors have hidden from investors financial time bombs - Mr Costello cited failed insurer HIH when announcing his reforms yesterday - has rocked investors' confidence in sharemarkets Business's premier lobbyist, the Business Council of Australia, generally welcomed the reforms yesterday but pointedly refused to endorse the move to grant more power to ASIC. "That is one of the area we would like to go back and talk to our members more," BCA chief executive Katie Lahey said. "We would like some time to digest that one." Generally, the reforms are in line with a trend sweeping the world but stop short of more draconian measures in the US. Australia's reforms include protection for corporate whistle-blowers and a tightening of audit practices, including a mandatory audit committee to be established for Australia's top 500 corporations. The Australian Shareholders Association said the reforms, including the ASIC proposal, struck a reasonable balance and called for bipartisan support to ensure they win Senate approval. After public debate on the measures, legislation is expected to be introduced early next year. ASIC's supporters, meanwhile, remain concerned about the watchdog's budget to match its ever-increasing profile. Domenic Martino, chief executive of consulting and accountancy group Deloitte, called for increased funding for the regulatory bodies, including ASIC and the Financial Reporting Council, which oversees the audit profession. "ASIC is facing additional reporting and regulatory requirements and we want to see that they are appropriately funded," Mr Martino said. A spokesman for Mr Costello said the last budget had increased ASIC's funding by $90.8 million over four years and taken its expanded workload into account, but this would be reviewed if there were "a pressing need"(by Geoff Elliott and Andrew White).

From http://www.theaustralian.news.com.au/ 09/19/2002

Micronesian Voters Keep Current Constitution

Palikir --All 14 proposed amendments to the Federated States of Micronesia constitution were defeated at the polls. The referendum drew a little over 15,000 voters, about 25% of the 67,000-plus registered voters. Although some proposed amendments got majority support they failed to reach the 75% of votes needed to pass. Strong support was given to a proposed amendment "to establish national educational standards and funding to support them." Equally strong was the opposition to a proposed amendment seeking "to provide allowance for former Presidents and Vice Presidents." Official results, showing the percentage of votes in favour, included:o 67.7% to provide for a minimum of four justices for the Supreme Court;o 56.5% to allow citizens to hold dual citizenships;o 55.7% to establish state jurisdiction over land and water;o 53% to create the Office of the Independent Prosecutor;o 37.7% to provide an allowance for former Presidents and Vice Presidents;o 65% to establish national educational standards and funding to support them;o 52.2% to provide for concurrent national and state power to levy a value-added tax;o 58.2% to change distributions of tax revenue between the National/State Governments;o 45.7% to increase the number of Congress members and limit length of terms;o 53.7% to provide for the direct election of the President and the Vice President;o 57.2% to establish the number of votes needed to override a Presidential Veto. The constitution now remains in its current form until the next caucus for a constitutional convention, in 10 years.

From http://www.pacificislands.cc/ 09/09/2002

New Zealand: Judges to Go Under Spotlight

Attorney-General Margaret Wilson has commissioned an independent review of how judges are appointed, sacked and managed. Former Prime Minister Sir Geoffrey Palmer will conduct the review, due by November. Ms Wilson said it was an attempt to achieve "best practice" in a complex area of public law and she did not expect any law change as a result. Sir Geoffrey would hold discussions with relevant office holders and agencies, including the Ministry of Justice and Department for Courts, the Crown Law Office and the State Services Commission. The draft terms of reference call for a report on judicial administration, "concerning the lack of a co-ordinated approach to the appointment, administration, servicing and termination of judicial and quasi-judicial appointments". Ms Wilson said poor co-ordination "has not occasioned any disasters, but it could be better managed". One issue was how to handle complaints against judges while preserving their independence from political interference. The last National Government had introduced a bill to address the issue of sacking judges after district court judge Martin Beattie was acquitted on 45 fraud charges relating to $10,000 in travel expenses. He was transferred to sit on the Accident Compensation Appeal Authority. Ms Wilson said she had allowed the bill to lapse because she did not feel comfortable with it. She denied rumours in Auckland legal circles that she was planning a review of Crown Law and the Solicitor-General's office. A review could be set up later to look at the cost of legal advice to all Government agencies, which last year paid $40 million to advisers. Ms Wilson said she wanted a "whole of Government approach" through better co-ordination between departments. (by Vernon Small)

From http://www.nzherald.co.nz/ 09/03/2002

Court Ponders Intent of Law on Sentencing

The Sentencing Act 2002 was a well-perused document by the end of its first serious test, in the Court of Appeal at Wellington yesterday. The Crown is appealing against a ruling by Justice Salmon in the Court of Appeal in Whangarei this year that he could not impose a minimum non-parole period when sentencing Haden Karl Brown to nine years' jail for attempted murder and arson. Brown attacked his mother, Sue, with a hammer, leaving her with brain damage, and then tried to set fire to her house. He was suffering from a chronic depressive disorder at the time. Five judges are hearing the appeal, and there was much debate in court yesterday over the act's wording and intent. John Pike, for the Crown, said Brown's "ferocious violence" qualified for a minimum non-parole period because it was outside the range of offending of a particular kind. But he acknowledged a difficulty in establishing what "an ordinary offence" was. The judges also questioned whether judges sentenced offenders in the expectation they may serve only the minimum one-third before being eligible for parole. Brown's lawyer, Gerard Winter, said that compiling lists defining what was outside the ordinary was potentially dangerous. The court reserved its decision.

From http://www.nzherald.co.nz/ 09/04/2002

New Minister Wants Action on Women's Policy

The new Minister of Women's Affairs, Ruth Dyson, believes that her ministry needs to strengthen its link to the women of New Zealand. "It has become a little too Wellington-focused and a little departmentally focused," she told the Herald this week. "We need to make sure that the issues we're discussing in the capital that are of concern to women are indeed affirmed by women around the country." In briefing papers, the ministry has called for the Government to undertake a "radical rethink" of family policies and income and employment guidelines. Ms Dyson says she understands a frustration in the lack of focus on women's specific policies. "I think we've been pretty consistent in ensuring that women's perspectives are recognised in our overall policies, but I don't think we're good enough when it comes to specific strategies." Her priorities include a focus on pay equity. Submissions on the discussion document Next Steps to Pay Equity close on November 30. The fact that New Zealand still has a large number of women-dominated occupations where comparable pay is lower than male-dominated occupations is "not acceptable in society". "When you look at the starting rates for nurses and the starting rates for police ... it does rather reinforce the point somewhat," she says. Also on the agenda is a review of the Parental Leave scheme, as resources permit. "We need to keep that on the agenda so we can extend that to people who currently aren't entitled to get it." This includes those who have had more than one employer in the previous year, and to the self-employed. Another priority is looking at financial barriers to more participation in paid work. "One of the biggest frustrations that particularly women on benefits have in moving towards independence is the social security abatement: they can only earn $80 a week, then they start losing money." But Labour says it will need a lot of convincing to agree to income-splitting, a policy that United Future is pushing. The system allows a one-income couple with children to divide their tax in two. Ms Dyson, whose first elected position in the Labour Party was onto the Labour Women's Council, said female participation at work had greatly improved. "But what we didn't think about was: How do we share the rest of the work? We haven't got that balance of paid and unpaid work right."

From http://www.nzherald.co.nz/ 09/07/2002

Developer Faces Mass Lawsuit

New Zealand's biggest terraced housing developer is facing a multi-million-dollar lawsuit and repairs to more than 350 homes in the most far-reaching case of leaky building syndrome to date. The Weekend Herald has learned that more than 150 owners at the $30 million Sacramento development in Botany Downs are preparing to sue Taradale Developments for faults which include leaks throughout the site and rotting stairs with mushroom-sprouting mould. Homeowners at three other Taradale sites in Auckland and on the North Shore are calling for investigations into previously unreported leaks which experts fear may turn out to be as bad as Sacramento's. Auckland Mayor John Banks warned yesterday that all ratepayers could end up paying for "Flash Freds and jerry-built developments", as the councils which approved them were dragged into costly legal disputes. The latest revelations come as thousands of worried homeowners and an equally nervous building industry wait for the findings of an independent inquiry next week. The 40-page report for the Building Industry Authority, due to be made public on Tuesday, is expected to confirm an interim finding in May that New Zealand faces "a major systemic breakdown" in the building industry unless action is taken fast. Two major changes to the Building Code - a compulsory water-draining cavity inside outer walls and a return to greater use of chemically treated timber, which is more resistant to rot - are being considered. Experts have already estimated that one in 10 new homes is at risk of rotting and the repair bill could easily top $1 billion. This week the founding director of leading leak investigation firm Prendos, Greg O'Sullivan, told the Weekend Herald that his firm alone was dealing with about 2000 apartment units at 21 sites nationwide. The second-biggest firm, Alexander & Co, previously said it was dealing with more than 500 units on almost 50 sites. In the past week the Herald has established that some of Auckland's biggest and newest developments are leaking and starting to rot. Eden Two, a 97-apartment site in Mt Eden, has rotting balconies after only 18 months, and more than 100 residents at the leaking Silverfield Terraces site in St Lukes might have to leave their homes if repair workers discover toxic mould inside the walls. Both sites were developed by the Redwood Group. Today the Weekend Herald can reveal that Taradale, which describes itself as the country's largest developer of terrace and condominium-style housing, has major problems. A report prepared in April for 153 owners at its flagship Sacramento development shows extensive leaks, breaches of the Building Code and an overall failure of the exterior cladding system and design details. Advanced decay is established in the exterior staircases and is likely in many other walls and decks. The report warns that the staircases must be repaired urgently before they rot through and collapse. But residents and industry sources familiar with Sacramento said Taradale had not repaired the stairs because it was arguing with builders about who was responsible. Owners are now finalising a legal claim for damages against Taradale by having experts strip out walls in selected units to determine the extent of the damage - and the size of their claim. No estimates have been made, but based on a typical $30,000-a-unit repair bill, the claim could easily reach $5 million. (by Andrew Laxon)

From http://www.nzherald.co.nz/ 09/14/2002

NZ Urged to Give Treaty Certainty in Law

The place of the Treaty of Waitangi should be given more certainty under New Zealand law, a visiting member of the Privy Council, Lord Steyn, said yesterday. It would require only 10 words to state that the treaty was of a constitutional nature, he told a seminar at Victoria University Law School. It might be included in the preamble to the appeal legislation establishing the proposed Supreme Court, rather than the Privy Council, as the final appeal court. Lord Steyn said the treaty was repeatedly referred to in laws. This year's speech from the throne, written by the Government, had contained the statement: "The basis of constitutional Government in this country is to be found in its founding document, the Treaty of Waitangi. My Government values and remains committed to strengthening its relationship with tangata whenua. That means fulfilling its obligations as a treaty partner to support self-determination for whanau, hapu and iwi." He said a Privy Council case had referred to the treaty as being of the greatest constitutional importance to New Zealand, yet subsequent decisions of the Court of Appeal had lead to uncertainty about that. "Isn't it fair to a minority to clear up the uncertainty?" What was required was political will, Lord Steyn said. Without a statutory reference to the constitutional nature of the treaty, there was a risk of its "implied repeal" by Parliament. It would be possible for Parliament to pass legislation which, on the face of it, might not say it eroded treaty rights, but nonetheless did. "If there is contained in the Treaty of Waitangi rights, those rights must be protected by appropriate remedies." Lord Steyn also argued that the proposed New Zealand Supreme Court should include judges from overseas, contrary to the advisory committee recommendation on a replacement for the Privy Council. Former Attorney-General Paul East, QC, who was at the seminar, disagreed with the inclusion of overseas judges, saying it could be seen as New Zealand lacking the confidence to run its own appeal court. "There is no place for a half-way house," he said. Lord Steyn argued that the Supreme Court should limit its appeals to cases of great public importance and matters of law. But it should not accept cases over matters of fact as then it would merely be replicating the Court of Appeal. "There is a risk your Supreme Court would not have as high a standing as it should," he said. Lord Steyn is in New Zealand to deliver the Cooke lecture, named after former Court of Appeal president Lord Cooke of Thorndon, who sits on the Privy Council. Act MP and former lawyer Stephen Franks attended one of Lord Steyn's seminars last week. He said he saw no problem with the actual articles of the treaty being included in constitutional legislation because they embodied "a classical 19th-century view of property right, the rule of law, and equality before the law". But a reference to "the principles of the treaty" would be dire because no one knew what they meant. "It would simply mean that the courts would become embroiled in what should really be political battles." Mr Franks said it was refreshing to have a member of the Privy Council giving his views on the treaty. "It has been going on covertly here. Lord Cooke's judgments are political and I think the [Court of Appeal] judges since Lord Cooke would dearly like to withdraw from some of it - like the partnership analogy. Partnership is just a nonsense in constitutional terms ... It is a useful term to convey the flavour of mutual respect and assistance, but to turn it into law is just nonsense." Institutions all over the country referred to "the treaty partnership" in their goals and objectives and "no one has the faintest idea what it means". (by Audrey Young)

From http://www.nzherald.co.nz/ 09/18/2002

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OECD Tax Center to Operate Until 2007

The OECD Tax Center will operate here until the end of 2007, the Ministry of Finance and Economy said yesterday. A ministry official said the tax center's operations were previously supposed to have expired on Aug. 31 this year. The center was set up in September 1997 in cooperation with the Organization for Economic Cooperation and Development (OECD). The official said the government had accepted the OECD's request that the tax center be given five more years to maintain operations in Seoul, until December 2007. The center is designed to disseminate OECD tax-standard recommendations to OECD member states as well as non-member countries. It provides training programs for tax officials from South Korea and other Asian countries. Programs cover such topics as international tax accords and taxation of financial instruments. The center also publicizes South Korea's tax system and tax reform. In addition, the center is making efforts to strengthen cooperation on tax-related issues with other Asian countries, including China, Singapore, Thailand and Malaysia. Besides South Korea, the OECD Tax Center currently operates in Austria, Hungary and Turkey. (by Park Yoon-bae)

From http://search.hankooki.com/ 09/03/2002

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Former Soviet States Seen as Flawed But Capable of Reform

A conference looking at security and economic prospects in Eurasia -- an area encompassing most of the former Soviet Union -- has highlighted the need for deep reforms, especially among the ruling elite. Speakers ranging from U.S. Treasury Secretary Paul O'Neill to the administrator of the United Nations Development Program, or UNDP, Mark Malloch Brown, focused on the need for sweeping reforms in countries throughout Central Asia and the Caucasus in particular. They spoke at a gathering of government and business leaders recently organized by the Eurasia Group, the United Nations, and the Business Council for the United Nations. O'Neill stressed the need to engage countries throughout Central Asia, noting the disastrous results of the international neglect of Afghanistan. He also rejected the notion that any new U.S. military operations in Iraq would lead to a decline in U.S. support for Eurasian countries. But the U.S. treasury secretary said leaders in the region will need to show they are willing to enact tough reforms if they are to attract scarce investment and development aid. "Without the rule of law and enforceable contracts and attacks on corruption, it's pretty difficult to make real progress on the other things that matter in life, and it's very problematic that foreign direct investment will expose itself in the absence of those things," O'Neill said. Authoritarian rulers have been in power through much of the post-Soviet era, and the region has suffered a dramatic increase in poverty levels. A report released yesterday by the World Health Organization provided fresh data about this decline. The report shows that the number of people reported to be living below the poverty line of $4 per day had risen from 3.3 percent to 46 percent in about 10 years. But O'Neill said a recent trip he made to the region also provided a glimpse of hope about how the resources of the region can be transformed into engines of growth. He referred in particular to the prospect for cooperation between two of the countries he visited, Kyrgyzstan and Uzbekistan, on hydroelectric-power generation. And he said during his visit to Ukraine that he saw potentially enormous benefits if the country renovates its infrastructure for transmitting natural gas. But he said such changes will not attract needed investment until the national leadership shows a commitment to a reform path. "To tap all this potential, they need to work with their neighbors to build regional cooperation and trade, invest in distribution systems, and overcome lingering distrust and Soviet economic thinking. The barriers to trade among these countries are much too high and corruption raises transportation costs even further," O'Neill said. O'Neill said Russia is beginning to make needed reforms, but the process would be accelerated by Russia's membership in the World Trade Organization, a move the United States supports. He also expressed hope that Washington's closer ties with Russia will have a positive impact on Eurasian countries. "Beyond the immediate cooperation we've sought for military and security interests, these nations are becoming new partners for economic development, the source of long-term stability and prosperity. At the same time, our growing alliance with Russia, the most influential country in the region, in the context of Russia's improving policy environment, has made the future brighter," O'Neill said. Speakers at a separate panel discussion on Eurasia's future were more pessimistic about the prospects for positive changes. Financier George Soros, president of the Open Society Institute, said Russia has evolved from what he called "robber capitalism" to elements of legitimate capitalism in recent years. But he said human rights activism is suffering due to Russia's new close ties with the U.S.-led coalition against terrorism. "If you look at, for instance, how Russia has handled Chechnya, it gives you a rather terrifying example of what can happen if you carry the war on terrorism to an extreme. And we are not in a position to criticize anymore, and it is not high on our agenda to do so," Soros said. Soros said that with developed countries unwilling or unable to force positive changes on the authoritarian governments in Eurasia, there should be more efforts to work through nonstate actors. Soros's own Open Society Institute is one of the most influential nongovernmental organizations in the region, assisting in areas like media development and education. "You can provide incentives, reinforcement, empowerment for those who are moving in the right direction. That is not an interference in the internal affairs of the countries. We don't do enough on the positive side," Soros said. UNDP administrator Brown, addressing the same panel, spoke of the importance of transparency in government affairs. He mentioned in particular the issue of energy revenues, saying government's handling of these funds has given rise to political unrest in oil-rich countries in Africa, such as Nigeria. Brown said countries like Kazakhstan, Turkmenistan, and Azerbaijan must be persuaded of the need for transparence in the use of their energy revenues. "If there is not a very transparent governance around the use of royalties on these pipelines, it will end up with huge costs to the foreign investors and the governments involved," Brown said. Brown also said the developed world must also take advantage of the upcoming expansion of the European Union eastward by further engaging the countries of the former Soviet Union. He said there must be ways to bring those countries onto the same reform path embraced by the former communist countries of Eastern and Central Europe.

From http://www.eurasianet.org/ 09/22/2002

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China: 'Healthy' CCP Axes 120,000 in Anti-Graft Drive

HONG KONG, China (CNN) -- More than 120,000 "unqualified" members have been kicked out of the Chinese Communist Party (CCP) in the past five years. However, state media have claimed the 81-year-old party is going strong, with membership having grown by almost 6 million since 1997 to reach 66.4 million. The People's Daily reported on Monday that "the ranks of the CCP are full of life and vigor." Quoting figures from the party's Organization Department, the paper said 22.3 percent of members were under 35 years of age, and that 52.5 percent were graduates of high schools and universities. The Organization Department, however, admitted that some 124,000 had their memberships revoked from 1997 to 2001. While no detailed breakdowns were available, Beijing analysts said the bulk of disqualified members had been implicated for corruption and related "economic crimes." The analysts said the official media had in the past month run numerous corruption-related stories to show the CCP was healthy and strong as it prepared for November's watershed 16th congress. However, some of the reports about Beijing's battle against graft seem to be contradictory. For example, official news agencies reported last weekend that 555 corrupt officials on the run were nabbed in the first half of this year. The agencies quoted law enforcement officials as saying: "We'll get you [corrupt officials] even if you have gone to the far ends of the earth." Stories run last week by the Beijing Youth Daily and the Forthnightly Chat magazine, however, were less sanguine. They reported that more than 4,000 cadres with 5 billion yuan ($605 million) worth of ill-gotten gains were still at large, and they had fled to countries as far as Africa and South America. President Jiang Zemin is due to address the problem of corruption among senior cadres in his Political Report to be delivered to the 16th Congress.

From http://asia.cnn.com/ 09/012002

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Civil Society Plays Bigger Role

In Chinese history, civil society was almost swallowed by the political state. A relatively independent civil society did not appear until modern times in China (referring to the period from the mid-19th Century to 1919). Although in the field of commerce and transportation, the birth of guilds or associations with certain autonomy can be traced back much earlier, these were actually some secret societies prior to the 20th century. During the first half of the 20th century, a nascent civil society, independent from the state, began to take shape. Civil society organizations (CSOs), characterized by voluntary, non-governmental, non-profit and independent groups, became active. However, it was the huge changes brought by the opening-up and reform drives begun in 1978 that catalyzed the proliferation of civil coalescences in China. The economic restructuring gives rise to renewed political consciousness and more people adopt a tolerant or acquiescent attitude towards a civil society. At the close of the 1990s, a debate on civil society, within academia, resulted in the wide acceptance of the concept and reality of civil society in academic circles. In June 1998, the Chinese Government changed the name of the Social Group Bureau, the office in charge of social organizations, to Civil Organization Bureau, demonstrating that civil society has gained legitimacy from the government. In 1997, the civil society of China consisted of 180,000 organizations above county level, with 1,848 at national level. It is obvious that economic and political reforms have created a favourable environment for a civil society, and such a civil society has a huge impact on economic and political lives. The increasingly influential civil organizations have become an indispensable bridge between the government and the citizenry. Many CSOs not only encourage members to participate in their internal affairs, but also inspire greater involvement in the political activities of the country. In addition some members from civil society organizations serve as representatives of certain interest groups in government organizations or legislative bodies. Such organizations include federations of industry and commerce, trade unions, women's federations and the Communist Youth League at all levels. Many civil society organizations, which mushroomed after the 1980s, have become important players in the push behind government policies and reform initiatives. With a wealth of experience and expertise, many CSOs, especially those from professional groups, serve as think-tanks for the government. At present, civil society organizations participate in the policy-making process of the government through several approaches. They help to shape policy by raising issues and requirements with relevant departments. For example, in Beijing, green organizations, such as "Friends of Nature" and "Earth Village," have engaged in voluntary environmental conservation programmes and dynamic publicity campaigns. They also raise suggestions on environmental issues. Their efforts have partly prompted the annual National People's Congress and National Committee of the Chinese People's Political Consultative Conference to adopt environmental issues as one of the priorities on their agenda. Civil society organization is also instrumental in promoting transparency within government. Many organizations are actually vehicles for the dissemination of political information. The conferences, training courses and seminars held by academic societies and research institutes become an important venue for members to acquire political information and hold discussions. In addition, the information revolution provides new tools and a medium for associations to spread information. Moreover, the civil society organizations' active engagement in public welfare projects help to improve the government's image and raise citizens' sense of political identity. Organizations like China Charity Federation, the Soong Ching-ling Foundation and the China Youth Development Foundation play a big role in poverty-relief and disaster-relief programmes. They also provide financial aid to millions of poor children to ensure adequate schooling. Civil society organizations also constitute effective checks on the behaviour of government. However, due to its short history, there are still many internal and functional problems with current civil society organizations in China. The claimed duties of many organizations, for example, do not match its real functions in society. Some organizations depend heavily on government organizations. These call for practical and effective measures to address the issue. But with the healthy development of China's civil society organizations, they look set to play an even bigger role in promoting social progress and good governance. The author is deputy director of the Compilation & Translation Bureau of the Communist Party of China Central Committee. The article was originally published in Study Times.

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

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Government to Trim Approval Procedures

Vice-Premier Li Lanqing said yesterday that the central government will push forward reform of administrative approval procedures to make them compatible with market needs. Since last October, all ministries under the State Council have reviewed their administrative examination procedures and submitted suggestions on how to reform such processes. Li said that the State Council, after first examining these suggestions, will soon promulgate an initial list of administrative approval procedures that will be abolished. He stressed that all unnecessary administrative permissions should be cancelled, including those which impede the opening of the market and fair competition. He stressed that all procedures that could be regulated by law or market mechanisms need not require administrative permission. However, he said the cancellation of administrative permission does not mean the cancellation of supervision. No departments should neglect or be slack in their duties as managing and supervising bodies, Li pointed out. He said efforts should be made to seek a government managing system that can meet the demands of the market economy. The reform of the administrative permission system in the country is not simply to reduce the number of items subject to administrative review, Li said. What is more important, he said, is to establish an administrative permission system that matches the market economy. He said all administrative bodies and staff must strictly abide by the law when exercising their administrative power and improve their way of working so that clean and efficient government bodies can be established. The work to centralize the right of administrative punishment should be furthered and the enforcement of laws should be rectified and improved, Li said.

From http://www1.chinadaily.com.cn/ 09/11/2002

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China to Further Improve Government Efficiency

China is making every effort to improve government supervision and working efficiency by promoting "e-government" services, according to sources with a seminar on Chinese e-government construction strategy which opened in Beijing Friday. Yang Xueshan, an official with the State Council, said the forthcoming conference on Chinese e-government technology and applications would focus on the development of e-government, exhibiting new products and technology, and building platforms for high-level international exchanges between providers and users of e-government services. Under its e-government plans, China is speeding up the construction of governmental internal and external web platforms as well as key central government websites. China is also building up databanks of statistics regarding population, geography, natural resources and the macro economy, with focus placed on "e-service" systems involving customs, taxation, finance, public security, social security, agriculture and water resources. Since 1999, China has witnessed considerable development in its e-government project, efficiently developing government functions. Meanwhile, it has improved government office efficiency and increased the transparency of government administration.

From Xinhua News Agency 09/21/2002

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JAPAN: Tanaka Reelected Nagano Gov.

NAGANO -- Former Nagano Gov. Yasuo Tanaka, who lost his position in July after the prefectural assembly adopted a no-confidence motion against him, was reelected in Sunday's gubernatorial race, according to early vote counting. Tanaka, 46, beat five challengers, including lawyer Keiko Hasegawa, 50, businessman Shu Ichikawa, 51, businessman Hideyoshi Hashiba, 52, former company employee Chozo Nakagawa, 46, and lawyer Tomio Fukui, 77. None of the six candidates received any official backing from political parties. However, the Japanese Communist Party unofficially backed Tanaka. On the other hand, the Liberal Democratic Party and the Japanese Trade Union Confederation, Japan's largest labor organization popularly known as "Rengo," extended unofficial support to Hasegawa. Most of the prefectural assembly members and mayors of Nagano Prefecture municipalities, who have been feuding with Tanaka, also supported Hasegawa in their private capacity. During the campaign, most of the challengers criticized Tanaka's confrontational political style in which he constantly clashed with the prefectural assembly, while supporting his policy of discontinuing to spend massive amounts of taxpayers' money on dam construction. The novelist-turned governor had been in constant conflict with the assembly since he was elected in October 2000. Their discord further worsened when Tanaka canceled two dam-construction projects in the prefecture to protect forests, as he had pledged. The assembly passed a no-confidence motion against Tanaka in July, and he chose to lose his position without exercising his authority as governor to dissolve the assembly for a snap election.

From http://mdn.mainichi.co.jp/ 09/01/2002

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LDP Demanding Major Cabinet Changes

Ruling coalition party members are pressuring Prime Minister Junichiro Koizumi to eject his three key economic ministers when he reshuffles the Cabinet, which could come late this month. According to sources in the Liberal Democratic Party, the call to get rid of Finance Minister Masajuro Shiokawa; Hakuo Yanagisawa, state minister in charge of financial policy; and Heizo Takenaka, state minister in charge of economic, fiscal and IT policy, is motivated by two factors. Some senior LDP members believe only the ministers' replacement will allow the implementation of a set of antideflation measures mapped out Monday by the ruling coalition to halt sliding stock prices after they plummeted in Tokyo on Sept. 3, the sources said. The three Cabinet members are openly reluctant to carry out the antideflation measures. Some LDP heavyweights, especially those with executive posts in intraparty factions, have high expectations that there will be sweeping changes to the Cabinet lineup, which would mean each faction would have a better chance of claiming a Cabinet post, the sources said. However, while Koizumi has not said much on the subject, he appears determined to ride out calls for a radically altered Cabinet. He will probably make minor changes while retaining his key economic ministers, observers said. They added that the struggle between Koizumi and the ruling coalition--especially the senior cadre of the LDP--will probably get white-hot, fanned by rising expectations within the ruling coalition of major changes in the Cabinet. Other sources said that former Prime Minister Yoshiro Mori faced a barrage of protests at a meeting in a Tokyo hotel Tuesday evening from three LDP heavyweights--General Council Chairman Mitsuo Horiuchi, former Policy Research Council Chairman Shizuka Kamei and former Defense Agency Director General Hosei Norota. Mori appealed to them to cooperate with the current administration, but the trio demanded that the three Cabinet members in the driver's seat of the economy be dumped, the sources said. "Now that the prime minister has finally decided to initiate efforts to rehabilitate the economy, he should personally act on his resolve by replacing the economic ministers," one of the three officials was quoted as telling Mori. However, according to the sources, even though the former prime minister has previously spoken in support of a Cabinet overhaul, this time he defended Koizumi by quoting a view shared by the prime minister's aides, that replacing any of the economic ministers would only tarnish Koizumi's reformist credentials in the eyes of the media. According to the sources, Kamei countered: "We can't waste time on trivial matters like that. The situation now is too pressing." Among the antideflation measures announced by the ruling coalition, one involves the government and the Bank of Japan buying up several trillions of yen in exchange trade funds (ETFs). A tax package comprising cuts followed by hikes would also be implemented earlier than planned. Furthermore, many LDP members have called for an across-the-board postponement of the so-called payoff system, which caps at 10 million yen the amount the government will insure individual savers when a bank goes bust. There is currently a freeze on introducing this deposit protection cap on liquid deposits, including ordinary deposits, but this is set to be lifted in April. LDP members also want the government to channel public funds into financial institutions weighed down with nonperforming loans so they can pay off their bad loans. However, Yanagisawa has so far shown no inclination to heed calls to postpone lifting the freeze and opposes injecting taxpayers' money into troubled financial institutions. However, he has been openly and repeatedly called to task on this by Policy Research Council Chairman Taro Aso. "The current financial policy will be maintained as long as Mr. Yanagisawa is in office," Aso reportedly said on one occasion. There is also criticism within the LDP of Takenaka, who opposes the idea of the government buying up ETFs. In a withering comment attributed to one of the three LDP executives--the secretary general, the policy research council chairman and the general council chairman--Takenaka was described as "a "scholar who's doing just dandy while stock prices fall and put banks carrying unrealized losses at risk of collapse." The push for a drastically altered Cabinet seems to be coming in particular from LDP faction leaders, observers said, since a major reshuffle would allow them and the party leadership to have more say in who gets which portfolio. Previously, the push for sweeping changes in the lineup waned considerably when Koizumi made it known that he would only tweak the Cabinet and LDP executive posts rather than make major alterations. The latest stock price plunge, however, has given a fresh head of steam to calls for large-scale changes. Koizumi apparently wants to avoid replacing his economic ministers as it would make him appear to be backtracking on his pledge of carrying out structural reforms and fiscal rehabilitation. Talking Tuesday to reporters accompanying him on his visit to the United States, Koizumi defended the three Cabinet members in question. "(All the three ministers) have been working very hard," Koizumi was reported as saying. "I'll decide, based on the circumstance, whether I accept the demand to replace them."

From http://www.yomiuri.co.jp/ 09/13/2002

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Suzuki-Linked Bureaucrat Denies Bid, Fund Illegalities

A former Foreign Ministry expert on Russian affairs pleaded not guilty Tuesday to misusing more than 33 million yen from a ministerial fund to pay for a trip abroad by officials and denied interfering in bidding for a construction project on one of the Russian-held islands off Hokkaido. At his first trial session before the Tokyo District Court, Masaru Sato, 42, denied misappropriating the money for a trip to Israel by ministry officials and inviting an Israeli scholar to Japan. Sato, who had strong ties with arrested lawmaker Muneo Suzuki, also denied unlawfully helping trading firm Mitsui & Co. win the project on Kunashiri Island in 2000. But Akira Maejima, 37, a former assistant director of the Foreign Ministry's Oceanian Division and Sato's former subordinate, appearing at the same court session, admitted to the charges and said he conspired with Sato in both cases. Two executives of Mitsui also admitted they unlawfully interfered with bidding for the project -- construction of a diesel power plant -- by obtaining information from the two Foreign Ministry officials. Sato claimed the 33 million yen from the Foreign Ministry fund was intended to foster efforts to gather information on Russian affairs. "The two charges are related to a national policy at the time, under the initiative of the Prime Minister's Office, to make every effort to conclude a peace treaty with Russia by 2000," he said. "Speaking from my conscience, I never did anything (illegal)." Sato claimed he never ordered Maejima to do any favors for Mitsui in relation to bidding for the project. In their opening statement, prosecutors said Sato and Maejima colluded to extract money from the fund so that the Cooperation Committee could pay for 17 diplomats and scholars to attend an international academic conference at Tel Aviv University in April 2000. The two also concealed the cost of inviting a scholar from the university to Japan under false pretenses, they said. The pair also allegedly conspired with Mitsui officials Masahide Iino, 44, and Yusuke Shimazaki, 39, to help Mitsui win the bid for the power plant. Protesting his innocence, Sato argued he is in fact the victim of a politically motivated investigation by the prosecution. Sato did not specify the prosecutors' motives behind his arrest. It has been reported that his arrest was part of political moves to cut loose any official with close ties to Suzuki. Suzuki has been charged with taking 5 million yen in bribes from a Hokkaido lumber company and violating the Law Concerning the Oath and Testimony by Witness. His trial will start before the same court on Nov. 11.

From http://www.japantimes.co.jp/ 09/18/2002

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Koizumi to Reshuffle Cabinet Sept 30

COPENHAGEN - Prime Minister Junichiro Koizumi indicated Monday that he plans to reshuffle his cabinet and name a new roster of top executives to the ruling Liberal Democratic Party (LDP) when their current term runs out on Sept 30. Speaking to reporters traveling with him to the Asia-Europe summit, Koizumi warned against speculations of a major reshuffle and hinted he may replace some of his economic ministers. Koizumi, who doubles as LDP president, also denied he has any plans to extend the current one-year term of top LDP executives and dismissed speculations that he may ride on his popularity at the opinion polls and call a snap general election. "This is absolutely not something that is in my mind," he said. Koizumi said he plans to confer with Chief Cabinet Secretary Yasuo Fukuda and top LDP executives when he returns to Tokyo on Wednesday and give them an outline of what he plans to do under a reconstituted cabinet. Citing his legislative agenda and budget plans for the new fiscal year, Koizumi said: "I will tell them I will offer the top three top party executive posts and cabinet positions to those who will go along with my plans." Koizumi, who heads a three-way coalition with the New Komeito and the New Conservative Party, said he also plans to consult with the leaders of his two coalition partners before making up his mind on the cabinet roster. Sticking to the stand he took when he first came to office in April last year, Koizumi said he would not accept recommendations for cabinet posts from LDP faction leaders. Koizumi insisted his yardstick is that ministers who serve in his cabinet would have to support his reform initiatives. Koizumi dismissed pressure within the LDP to replace cabinet ministers who are not Diet members, saying "That is what those people who expect a large-scale reshuffle want." On the reelection Monday of Yukio Hatoyama as leader of the main opposition Democratic Party of Japan, Koizumi challenged Hatoyama to present the nation with a "constructive" policy platform. "They should say, this is what we will do if we take over the government," Koizumi said of his Diet opponents.

From http://www.japantoday.com/ 09/25/2002

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Forum to Examine New Structural Reform

The Tokyo Colloquium and the Yomiuri International Economic Society, both sponsored by The Yomiuri Shimbun, will host an international symposium titled "Opening the New Horizon of Structural Reform" on Oct. 23. It will be the fourth Yomiuri International Forum symposium to be held this year. The symposium will be held at the Palace Hotel in Marunouchi, Tokyo, from 9:30 a.m. to 4:30 p.m. As the symposium to top off this year's Yomiuri International Forum's general theme of "Japan Must Change along with the World; Overcoming Terrorism and Deflation," problems related to structural reforms will be discussed. In the morning session, moderator Akihiko Tanaka, director of the Institute of Oriental Culture, Tokyo University, will lead discussions by experts on political problems related to structural reforms. In the afternoon session, moderator Motoshige Ito, a professor at Tokyo University, will lead experts in examining economic problems related to structural reforms.

From http://www.yomiuri.co.jp/ 09/26/2002

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Lawmakers Call for METI to Lose Nuclear Administration Role

TOKYO - Three lawmakers from different political parties called Wednesday for nuclear safety administration to be split off from the Ministry of Economy, Trade and Industry (METI), which oversees the power utility industry, in the wake of damage cover-up scandals at nuclear plants. But METI chief Takeo Hiranuma said in response to the call, made in a meeting of the House of Councillors Audit Committee, that the government is not considering such a reorganization.

From http://www.japantoday.com/ 09/26/2002

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SOUTH KOREA: Commission Calls for Hearings for Ranking Officials

The nation's anti-corruption watchdog yesterday called for a set of measures, including the introduction of confirmation hearings for ranking officials, to root out corruption allegedly prevalent in the nation's political landscape. The suggestions were made by the Korea Independent Commission Against Corruption during a public hearing at the committee office yesterday. It plans to seek the enactment of relevant laws at the National Assembly in the future. The commission said that hearings should be conducted for candidates for heads of major government agencies, including the director of the National Intelligence Service, the prosecutor general and chiefs of the National Police Agency and the National Tax Service. It also called for the right to independently investigate corruption among the president's family and relatives, and high ranking officials while demanding the institutionalization of an independent prosecutor system on a permanent basis. The commission's move drew special attention as it came in the wake of influence-peddling scandals involving President Kim Dae-jung's sons. The other steps proposed by the commission include the expansion of media electioneering and the public election management system under which the state will shoulder the costs for TV debates and advertisements. ``Stricter accounting controls on the uses of political funds will be implemented to enhance transparency and prevent corruption,'' commission head Kang Chul-kyu said in a press meeting. The inspection rights of the National Election Commission will be strengthened to guarantee fair and transparent uses of national subsidies by political parties, he said. ``Accounting-related officials will be obliged to use a single bank account and credit card for the operation of political funds,'' he added. He noted the measures are meant to prevent possible political corruption that might arise ahead of the upcoming presidential election in December. The commission also envisions the change of the current small constituency system into medium and large ones, and a proportional representation system, plus the allotment of state subsidies in accordance with the ratio of voter support in general and presidential elections. As a long-term research task, the commission cited the need for the ``matching fund'' system of allotting subsidies in accordance with efforts to raise party membership fees. It will also work to find ways to minimize parties' expenditure by slimming the organization of political parties' central headquarters, another commission official said.

From http://search.hankooki.com/ 09/03/2002

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PM-Designate a Judge with Clean Image

Prime Minister-designate Kim Suk-soo, 69, is a career judge, who served as head of the National Election Commission, formerly known as the Central Election Management Committee, which is tasked with ensuring fair elections. Born in Hadong, South Kyongsang Province, Kim is described as a quiet man who treats his subordinates in a fair and reasonable manner. A graduate of Yonsei University, Kim passed the national bar exam in 1958 and took his first post in 1963 as a judge at the Pusan District Court, before serving as head of district courts in Seoul, Suwon and Inchon. He won a record high rate of parliamentary approval for his appointment as Supreme Court justice in 1991. His ethical standards were verified when he was appointed chairman of the Supreme Court's Public Servants Ethics Committee after retiring in 1991, his aides said. While serving as the head of the election watchdog body for over three years from 1993, he was regarded to have led the organization in a desirable manner, initiating various political reform bills. He is known to have maintained close personal relations with Lee Hoi-chang, presidential candidate of the Grand National Party. The two served at the Supreme Court at the same time. Wary of the brewing controversy over the legality of the system of premier-designate with criticism from the opposition camp, he said he would refrain from carrying out outdoor missions. ``But the tasks pertaining to recovery from flood disaster cannot be postponed, given the massive damage,'' he said during a press conference. He said once he gets approval by the National Assembly, he will put priority on carrying out the upcoming presidential election in December in a just and fair manner so that there will be no dispute over the election's neutrality. ``I believed President Kim chose me as the candidate for the premier due to my experience as the head of the election watchdog body, in a show of his strong will to maintain neutrality in the election period,'' he said. He underlined the need to expend further national energy to successfully host the forthcoming Busan (Pusan) Asian Games to raise the national image and enhance international harmony. Kim's eldest son was exempt from active military service, which might touch off a controversy during his confirmation hearing session. ``To tell the truth, I hesitated to accept the proposal for the premiership because of the issue. I will tell the truth during the confirmation,'' he said. But he declined to reveal details of his son's military exemption. He expressed confidence over his process of amassing assets, saying ``there have been no problems.'' In a bid to avoid possible controversy during the confirmation session, he quit his jobs as outside director of Samsung Electronics, head of the Newspaper Ethics Committee and the Public Servants' Ethics Committee, and inspector of Yonsei University. Kim is married to Eom Yoon-seong, 63, and has two sons and two daughters. (by Shim Jae-yun)

From http://search.hankooki.com/ 09/10/2002

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Ex-Supreme Court Justice Named New Prime Minister

President Kim Dae-jung yesterday nominated Kim Suk-soo, a former Supreme Court justice who also was chairman of the National Election Commission (NEC), for prime minister. President Kim made the appointment after the National Assembly rejected his previous two nominations for the No. 2 administrative post. The majority Grand National Party (GNP) said it would thoroughly look into whether the new appointee is qualified to serve as prime minister during an upcoming parliamentary confirmation hearing. Born in Hadong, South Gyeongsang Province, the prime minister-designate spent most of his public service as a judge, beginning his career in the judiciary in 1963. He served as a Supreme Court justice from 1991 to 1997 and chairman of the NEC, the nation's top election watchdog, from 1993 to 1997. He is currently chairman of the Public Servants Ethics Committee and the Newspaper Ethics Committee. Cheong Wa Dae Chief of Staff Park Jie-won said the President selected the nominee because he has administrative experience and has managed elections fairly while serving as NEC chairman. "We believe that the new nominee will help the government maintain political neutrality and manage the December presidential election fairly," Park said. The nominee said he believes President Kim selected him in view of his experience as chairman of the NEC, which would help ensure the administration is nonpartisan in its management of the Dec. 19 presidential election. "But I think the cabinet's most pressing task now is to cope with the damage from the typhoon," he said. Kim expressed some apprehension about what people will think of the fact that one of his two sons did not serve in the military. Whether public officeholders' sons fulfilled their mandatory military service has become a yardstick of politicians' ethical standards. But Kim expects no controversies to emerge over matters such as his personal finances. Cheong Wa Dae officials said the government will ask the National Assembly next week to begin work on the nomination. The Assembly is expected to vote on the nominee late this month after holding a two-day confirmation hearing. The nomination came two weeks after the Assembly voted down the President's second nominee for prime minister, Maeil Business Newspaper publisher Chang Dae-whan. Lawmakers took issue with Chang's alleged tax evasion and questionable real-estate dealings. The President's first choice to replace former Prime Minister Lee Han-dong was Chang Sang, former president of Ewha Womans University in Seoul. She was the first woman ever nominated for the top administration post. She also was troubled by controversies over her children's citizenship, real-estate holdings and erroneous information concerning her educational background. The parliament's successive rejection of the two Changs, who are not related, dealt a serious blow to President Kim, who is in his final months in office. Kim's single five-year term ends next February and he is barred from seeking re-election.

From http://www.koreaherald.co.kr/ 09/11/2002

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Inspection Focused on Draft Scandals

The National Assembly started the inspection of 365 government agencies yesterday, but the 20-day parliamentary inspection seems to be turning into a partisan battleground ahead of the Dec. 19 presidential election. On the first day of the inspections, the last one for the Kim Dae-jung administration, the Millennium Democratic Party (MDP) focused on attacking the alleged draft evasion of two sons of Grand National Party (GNP) presidential nominee Lee Hoi-chang, inviting fierce counterattack from the GNP. Trying to block the MDP offensive, the conservative GNP bent its energies on revealing the government's misadministration, including the mismanagement of public funds, and various corruption scandals, some of which involved two of President Kim's three sons. In particular, lawmakers from the rival parties had a hot debate on the alleged draft-dodging scandals in the Assembly's National Defense Committee while conducting an audit of the Defense Ministry. MDP spokesman Lee Nak-yon raised a fresh suspicion about Lee Hoi-chang's second son Lee Su-yeon's dubious exemption from mandatory draft service. ``Grand National Party presidential candidate Lee Hoi-chang said in 1997, when he was the ruling party candidate, that his second son returned home after a weeklong diagnosis,'' the spokesman said. ``However, Lee Su-yeon was called up on Jan. 8, 1990 and returned home on the same day, according to the military document certifying his homecoming.'' Countering the MDP offensive, GNP lawmaker Park Se-hwan inquired about the circumstances of how the copies of the military medical documents of Lee Hoi-chang's two sons were removed from the ministry. Ha Soon-bong, a member of the GNP Supreme Council, also said the ruling party's offensive was a political maneuver to assassinate the character of the party's presidential candidate. In the inspection of the Finance-Economy Ministry, Rep. Yim Tae-hee of the GNP said that for the recovery of bailout funds that became irretrievable after the financial crisis, the burden to be borne by taxpayers reached 208.5 trillion won ($171.1 billion) and the average amount for households was 17.38 million won. ``The interest on the 49 trillion won of national bonds for the next 25 years amounts to 70.9 trillion won,'' Yim said, calling for an early redemption. Rep. Kang Un-tae of the MDP also called for the people responsible for the irretrievable public funds to be reprimanded, saying authorities should exert efforts to call in the money to alleviate the public burden. (by Ryu Jin)

From http://www.hankooki.com/ 09/16/2002

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Chung MJ Officially Declares Presidential Bid

Rep. Chung Mong-joon, head of the Korea Football Association, officially declared his bid to become the next president of South Korea Tuesday afternoon. Speaking at a news conference in the National Assembly compound, Chung said he decided to run so as to devote himself to the cause of political reform instead of just talking about it. Chung said he intends to stand at the center of a new era of politics based on common sense. He said he will create a new party with many other politicians who agree with his views, and the new party will be based on voluntary participation by the Korean people.

From http://rki.kbs.co.kr/ 09/18/2002

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Lawmaker Alleges Corruption in Korea Life Deal

During the National Assembly audit of the Financial Supervisory Commission (FSC), the financial-sector watchdog, on Tuesday, Rep. Chung Hyung-keun of opposition Grand National Party (GNP) claimed that Hanwha group has been successful in its bid to acquire Korea Life Insurance, thanks largely to active lobbying for the group by the presidential office and ruling Millennium Democratic Party (MDP). Chung said that his claim is based on wiretapped telephone communication which he said he got hold of through sources. Chung's claim went on as follows: "On May 5, President Kim Young-bae of Hanwha Corp., a flagship Hanwha unit, called up Hanwha group chair Kim Seung-youn while the chair stayed in Germany and said that his company will mobilize Rep. Lee Jae-jung, a senior ruling party member, to have him to carry out lobbying activity for the acquisition. "The Hanwha chair asked the president to contact Han Hwa-gap, one of leading MDP members, and Roh Mu-hyun, the presidential candidate for MDP, and to call for their rally for the deal. "As the deal has been deadlocked for several months, the Hanwha chair asked a high-ranking staff of the presidential secretariat to urge chief presidential secretary Park Jie-won to jump in the deal and to render support. "Chief secretary Park, then, made a phone-call to Vice Minister Yoon Jin-shik of Finance and Economy, demanding that the vice minister conclude the acquisition deal by September 5." After making the allegation, Rep. Chung, however, did not identify the sources of the wiretapping. All of the persons cited in Chung's claim have flatly denied the allegation. In a press release, the Hanwha group claimed that its chair has never been to Germany this year. ( by Kim Min-chul)

From http://english.chosun.com/ 09/24/2002

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Indonesia: Clean Water -- Clean Govt?

If anything could be said to illustrate the dismal state of Jakarta's public services, the shortage of potable water in this city that borders the sea and is traversed by rivers is as good an example as any. To cite a few statistics: Only about 600,000 people, or less than five percent of the city's population of more than 10 million, have access to water supplied by city-owned water company PAM Jaya, which is the distributor of clean water in Jakarta. The rest must resort to drilling either shallow or deep wells or tapping water from the city's badly contaminated rivers. About 70 percent of those rely on groundwater from wells, while the remainder depend on river water. This is not to mention the quality of the water, even the purportedly clean water, produced by a number of water companies and supplied to clients by PAM Jaya. Bambang Budi, a resident who is also a PAM Jaya client and lives in Cilandak, South Jakarta, complained, in an interview published in this newspaper recently, "I buy dirty water at expensive rates." Another resident, Yose, who lives in Kayu Jati in East Jakarta complained that his water was muddy, especially after heavy rain. Similar complaints can be easily heard by anyone who cares to listen to residents' grievances about Jakarta's public services. Mochamad Ali, a hydrology expert employed at the Ministry of Resettlement and Regional Infrastructure, has warned the public to be careful when consuming tap water supplied by PAM Jaya, even when it looks clean. This is because the filtering system that the company employs fails to screen micro-pollutants and disease-causing bacteria that are carried by the severely contaminated river water, which companies use as their raw water. Furthermore, the practice of adding chlorine to treat water could lead to the formation of new compounds that are believed to be carcinogenic. A study carried out by the Indonesian Consumers Foundation (YLKI) about a decade ago found that Jakarta's tap water contained an average of 0.0024 ppm of mercury, which is more than twice as high as the 0.001 limit set by the Ministry of Health. A University of Indonesia study conducted last year suggested that detergents were among the pollutants that contaminate well water and raw water used by tap water firms, including PAM Jaya. Nor, generally speaking, does the groundwater in Jakarta seem to be that much better. Overpopulation and the absence of a sanitation system are the reasons why it is virtually impossible in Jakarta to drill a well far enough removed from sources of pollution, such as contaminated rivers or waste disposal tanks, to be safe. In addition, the uncontrolled digging of deep wells is causing the increased intrusion of salt water from Jakarta's coastal areas. What this has all led to is that wells are being dug deeper and deeper and that in the worst-affected areas the land is in danger of subsiding. As water is one of the most fundamental needs of mankind, the question that demands an urgent answer is, what can be done to stop this alarming trend? Better enforcement of existing rules and regulations is obviously part of the solution. But improbable though it may seem to some, another is the eradication of corruption. The issuance of drilling permits and use of groundwater in Jakarta are regulated by Gubernatorial Decree No.744/1995. However, so far, few, if any, sanctions appear to have been imposed on either individuals or companies that have broken the law. Corruption is also believed to be the factor that has encouraged unscrupulous individuals to tap the PAM Jaya network for water, to be resold to households not as yet connected to the PAM Jaya network. Water, it must be remembered, is a basic commodity without which life is impossible. For this reason, its availability to all is guaranteed by the Constitution. It seems to be high time that the Jakarta city administration take a good look at the water situation in this city. With all the problems Jakarta is already facing, the city hardly needs another source of frustration and dissatisfaction that could eventually lead to unrest.

From http://www.thejakartapost.com/ 09/14/2002

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Good Governance to Secure Summit Outcome

The government has pledged to encourage good governance, reduce unemployment, ratify environmental conventions and set up a sustainable development council to follow up on the outcome of the World Sustainable Development Summit. State Minister of the Environment Nabiel Makarim said that creating good governance would top the government's list of priorities as without it, the implementation of other programs would be meaningless. "One thing that should precede the other programs is clean, transparent and accountable central and regional governments. Otherwise any grants or loans for health, forests or other sectors will be useless," he told reporters after opening a workshop on sustainable development for regents and mayors. Nabiel also said that the government would ratify the Kyoto Protocol and the Cartagena Convention. The government has also planned to establish a council to formulate further policies on sustainable development, he said, however he did not specify on any timetable. "I hope we can soon establish the council," he said. However, noted environmentalist Emil Salim suggested that the central and local governments focus on eradicating poverty, changing unsustainable production and consumption, and protecting and developing natural resources and the environment. Emil said that poverty reduction had to target the unemployed by providing them with, among other things, training to collect garbage and change it into commercial fertilizer. The poverty reduction program should also provide socially disadvantaged people with easier access to safe water by setting up a public well or having tap water at various points, he said. The government should also start reducing fossil fuel production as well as its use in industry and transportation on the grounds that it causes global warming, and to help change the pattern of energy production and consumption, he said. "The government needs to promote the use of clean fuel, such as gas and solar energy," he said. "If we don't do this, the Earth will get warmer and warmer and we will have to brace ourselves for more floods and droughts along the northern coast of Java and the eastern coast of Sumatra by 2025." He said that several regional governments had conducted some programs in line with the outcome of the Earth Summit, which could be emulated by other regional administrations. Emil cited Bantul regency in Yogyakarta, which built a hospital where people could check their health for Rp 1,500 (16.6 U.S. cents), and Gianyar in Bali, which provided free ambulances. The summit, which was held in Johannesburg, South Africa last month, produced over 30 commitments and more than 150 points in a plan for implementation in numerous areas, including water, energy, health, agriculture and biodiversity. Various preliminary partnerships were also reached during the summit. Indonesia has reportedly secured various preliminary partnerships with other countries in combating forest fires and illegal logging, reducing poverty, lessening marine pollution, eliminating gas emissions and enforcing property rights. (by Moch. N. Kurniawan)

From http://www.thejakartapost.com/ 09/20/2002

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Malaysia: View New System in the Long Term, Government Staff Told

The new Malaysian Remuneration System (MRS) should be seen as a chance for civil servants to advance their careers in the long run and not only for higher salary. Public Services Department Drector-General Tan Sri Jamaluddin Ahmad Damanhuri said the MRS, which was based on four core points, had to be accepted as a whole for its benefits to be seen where those who had proficient knowledge of their work would be given due recognition. The four points are the performance evaluation system, career advancement, salary and allowance structures revamp and improvement of service conditions. They should look forward and increase their knowledge. They must pass the level of competency so it is up to the individual to advance his or her career. They want those in the public service to aspire to greater achievement in future and the MRS should be seen in that light, They said at a briefing on the new system yesterday. Jamaluddin said those who opted to take up the MRS would find themselves in a more favourable position than they were now in. He was commenting on Cuepacs affiliates unhappiness over the RM15 increment given to the Support Group that involves more than 800,000 employees. The MRS, which replaces the New Remuneration System on Nov 1, promises higher salaries, a one-off payment upon conversion and more promotional posts as among several new perks.

From http://thestar.com.my/ 09/05/2002

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Findings of Public Perception on Corruption to Be Revealed

A study by Universiti Kebangsaan Malaysia on the public's perception on corrupt practices at government departments has been submitted to the Anti-Corruption Agency. ACA director-general Datuk Zulkipli Mat Noor said the study was a directive by the Cabinet's special committee on integrity and management chaired by Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi in October last year. The ACA, he said, was reviewing the findings of the study, after which it would be made known to the public. "The findings will also be used as a guideline by the ACA in its task to wipe out corruption in the country," he told reporters after closing the Rakan Muda Anak Angkat camp for SM Putrajaya I near here on Sunday. Earlier, in his speech Zulkipli said the ACA had adopted all Form Four students of SM Putrajaya I and had been helping the school look into the students' welfare. Zulkipli said the students were also briefed on corruption to create awareness against the scourge during their early years. "We hope to create the awareness from young so that they will grow up to become responsible citizens," he said. On Malaysia being positioned 33rd by the Berlin-based Transparency International on corrupted nations, Zulkipli said it was good, adding that the ACA would strive to improve the position in future.

From http://thestar.com.my/ 09/10/2002

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PSD: Most Civil Servants Will Opt for Scheme

KANGAR: The Government is confident that the majority of the 985,000 civil servants will opt for the newly-introduced Malaysian Remuneration Scheme (SSM), which takes effect on Nov. 1. Public Services Department (PSD) director-general Tan Sri Jamaluddin Ahmad Damanhuri said many of them had realised the benefits of the new scheme following extensive explanation by the department. He want civil servants to view the scheme as a package and not just salary increment, where emphasis is given on competency to help employees excel in their career,? He said after briefing Perlis civil servants on the scheme here yesterday. Jamaluddin is currently leading senior PSD officials on a nationwide tour to explain the SSM scheme to all federal and state civil servants.

From http://thestar.com.my/ 09/15/2002

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Civil Servants Must Clear Exams and Courses for Promotion

PETALING JAYA: Civil servants at all levels will have to pass a competency test after undergoing courses before they can be promoted under the Malaysian Remuneration System (MRS) to be implemented on Nov 1. Public Service Department (PSD) Director-General Tan Sri Jamaluddin Ahmad Damanhuri said this move, which means department heads will no longer have the sole discretion to promote their subordinates like in the New Remuneration System, was to encourage self-enhancement through continuing education and acquiring knowledge, expertise and creativity. "With the Proficiency Level Assesssment and new promotional grades, all schemes of service will be strengthened by making a pass in the test mandatory," he said in a recent circular on the implementation of the MRS. Elaborating on the tests, Sarawak Cuepacs secretary Thomas Huo said the MRS was geared towards replacing the conventional Supervisory Control System, which managed the nation's civil service all these years, with the competitive but rewarding New Developmental System. He said the MRS was a complete package with its own curriculum and courses, and would be conducted by the respective organisations or the PSD during assessment exercises. Huo said the first stage of the curriculum would be the Kursus Kenegaraan (Nationalism Course), which would cover the country's historical and current events as well as the Federal Constitution and administrative system. "After that, candidates will be selected to undergo a double-component competency course under the second leg. "Candidates who pass the Nationalism Course will be upgraded. The second leg for further increment and promotion will comprise Generic and Functional Competency components. "The Generic Competency component will train and test civil servants in general knowledge, capability, work processes as well as inter- and intra-personal skills,'' said Hou. The Functional Competency course, on the other hand, covers areas related to the candidates' job and would test them on coping with challenges and crisis management skills. The entire course, he said, would be packaged in several levels depending on the job designation. "Some jobs could offer up to six levels. For instance, a general clerk undergoes the course to become a senior clerk and then move on to another level for promotion as clerical supervisor, meaning that there will be competency assessment courses at every level of a job,'' explained Hou. Cuepacs president N. Siva Subramaniam said besides offering personal developmental opportunities, the new system would also give civil servants the chance to determine their own career advancement. "Civil servants who perform their duties efficiently and are willing to develop themselves can look forward to equitable rewards in the form of promotion and merit movement in their salary scales,'' said Hou, adding that the new system would require government servants to undergo courses and sit for examinations. He said there would be management committees set up at every job level to select eligible staff to go for the courses. The committees would also have to strictly adhere to selection guidelines, said Hou, adding that the criteria for selection had already been formulated. According to the circular, civil servants will be given one increment next year, adding that the merit increment based on the proficiency tests would only be given the following year.

From http://thestar.com.my/ 09/22/2002

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Philippines: People Still Trust Courts

Chief Justice Hilario G. Davide Jr. said yesterday the credibility of the country's judiciary "may have waned but it was never lost" as the people still trust that the courts are the arbiters of their legal disputes. Davide said that the best proof of the trust and confidence of the people in the judicial system is that there is no anarchy in the country and there are hundreds of cases filed every working day. "If the credibility of the justice system has waned it is because there are some in the system who have forgotten the constitutional principle that a public office is a public trust and all public servants must be at all times accountable to the people," he said. The chief justice delivered a lecture as a Ramon Magsaysay awardee for government service. He was honored for his "life of principled leadership in profound service to democracy and the rule of law in the Philippines." While the original topic given by the award foundation was "Restoring the Credibility of the Justice System," Davide changed the topic to "Strengthening the Credibility of the Justice System in the Philippines." "The impression conveyed is that the credibility of the justice system in the Philippines has been lost. I must forthwith state that it was never lost," he said. Davide said the effectiveness of the courts "is firmly rooted in their credibility in the public eye." "Without the people's belief in the justice system, court decisions become mere scraps of paper; and society is brought closer to chaos, as citizens become tempted to take the law into their hands," he said. He said that in its efforts to build credibility, the judiciary should not be swayed by popular movements or lobby groups, and it cannot act on issues of public interest unless a case is filed with the courts. At the same time, he said that members of the judiciary cannot explain their rulings beyond what is written in their decisions and they cannot revise their decisions if met with public opposition. Addressing the issue of perceived corruption in the courts, Davide said that the Supreme Court has exerted efforts to weed out undesirables because the "misconduct of one judge alone affects the entire justice system." he pointed out that for the past three years, more than 600 members of the judiciary and court personnel have been disciplines either by dismissing, suspending, fining, or admonishing them. "I state this figure not to indicate that the Philippine judiciary is a den of hoodlums," he said. "Indeed, out of some 25,000 employes and officers, less than 700 have been found guilty of one offense or another for a period spanning three years. The bad eggs are an absolute minority. Instead, I wish to emphasize that the judiciary has not been sitting idly in the face of proven charges against its members," he said. He added that education and reform programs are in place to strengthen the people's faith and confidence in the Philippine judicial system. (by Rey G. Panaligan)

From http://www.mb.com.ph/ 09/03/2002

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Thailand: Verdict's Reversal Upsets Graft Panel

The National Counter Corruption Commission will seek to ``repair the harm done to its authority'' by asking the Constitutional Court to bar state agencies from overturning its verdicts on any official found guilty of corruption. The graft agency has been in a turf war with the bureaucracy since last month, when an appeals panel of the Civil Service Commission reversed its guilty ruling against former Public Relations Department chief Veerapol Duangsoongnoen. Cabinet accepted Mr. Veerapol back to work as an inspector-general of the PM's Office yesterday. NCCC officials made it clear that this set a bad precedent which could weaken the fight against rampant corruption among state officials. NCCC found Mr Veerapol and Chusak Rongsawat, then the department's information technology centre chief, were involved in the forgery of a document to help Krungthep OA Coms Co Ltd win a 10-million-baht computer leasing deal with the department in 1999. It ruled Mr Veerapol and Mr Chusak guilty of serious misconduct and asked the PM's Office to dismiss them. They were sacked on June 14. Both appealed to the Civil Service Commission, which appointed a panel chaired by Khaneung Reuchai to re-investigate the corruption allegations. In the investigation report presented to cabinet by the commission yesterday, the Khaneung panel found the pair had no intention of corruption but had made a blunder by altering a bidding committee's report suggesting the department call a new contest for computer procurement.The tampered document suggested acceptance of results of the first bidding, in which Krungthep OA won. The Khaneung panel found the pair had acted with negligence, considered a minor misconduct. It said sacking was too harsh a penalty and recommended the PM's Office put them back to work. Deputy government spokesman Kuthep Saikrajang said by clearing Mr Veerapol of his alleged wrongdoing and taking him back into the civil service, cabinet was not defying the NCCC ruling. Mr Kuthep said Mr Veerapol had the right to appeal. ``There needs to be a balance of power or we might become a dictator,'' he said. ``The NCCC should look at the Civil Service Commission's investigation report. It may see something it did not see before.'' Prime Minister Thaksin Shinawatra said Mr Veerapol had the right to restore his good name _ by returning to the civil service. Mr Veerapol will retire at the end of September. ``We now consider him innocent,'' Mr Thaksin said. NCCC chairman Opas Arunin said graft commissioners have resolved to ask the Constitutional Court to draw a clear line on its jurisdiction and that of the Civil Service Commission, to prevent future clashes of authority. Mr Opas said Mr Veerapol's return to the government service could cause problems in the future, as other officials punished for serious misconduct would cite the Veerapol case to atone for their own mistakes. The NCCC, he said, was worried this could render the anti-corruption law useless. An NCCC source, meanwhile, said articles 92 to 95 of the NCCC law stated clearly that guilty verdicts handed down by the anti-corruption commission were irreversible. Furthermore, the commission's decisions on punishment for officials found guilty of corruption should be considered final. ``The appeals panel is not empowered to decide whether or not officials are guilty of wrongdoing,'' the source said. (by Pradit Ruangdit and Wut Nontharit)

From http://www.bangkokpost.com/ 09/04/2002

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Veerapol Now Faces Court Battle

Veerapol Duangsoongnoen, cleared of a corruption allegation and reinstated to the civil service, will still have to fight malfeasance and forgery charges in the Criminal Court. The Attorney-General's Office has agreed with the National Counter Corruption Commission that the former Public Relations Department chief tampered with an official document to help a private firm win a contract to lease computers to his department in 1999.Mr Veerapol, who was sacked in June but rehired and made an inspector-general of the PM's Office by cabinet on Tuesday, will have to appear before the Criminal Court on Oct 9.A clash of authority erupted between the graft commission and the bureau-cracy after an appeals panel of the Civil Service Commission overturned the NCCC's ruling against Mr. Veerapol and recommended the state re-employ him. The reversal of the finding gave the graft agency cause for concern. Graft fighters argued the NCCC law stated clearly that their decision was irreversible. Corrupt state officials now had a channel to escape punishment. The NCCC could easily come to be perceived as a paper tiger. Democrat MP for Songkhla Thavorn Sen-nium said he wondered whether Prime Minister Thaksin Shinawatra and his cabinet would show any responsibility if the Criminal Court found Mr. Veerapol guilty as charged. ``This government in the past promised zero tolerance of corruption. ``It is evident now the 62 million Thai people can not trust this government because it does not really want to fight a determined war against corruption,'' Mr. Thavorn said.Opposition chief whip Jurin Laksanavisit, a Democrat, said the cabinet's acceptance of Mr Veerapol's return to work showed the government had little respect for the NCCC. Krirkiat Pipatseritham, a graft commissioner, said his agency would soon petition the Constitutional Court for a ruling on whether the Civil Service Commission's appeals panel had the power to overturn the counter corruption commission's ruling. Mr. Krirkiat said the government had ``made life more difficult'' for the corruption commission. He declined to comment on whether he thought there had been deliberate attempts to discredit the graft commission. Mr. Veerapol, meanwhile, said the NCCC was not a court and that he had the right to appeal. ``There are three courts and often the Appeals Court does not agree with the court of first instance,'' he said. ``If the NCCC says a person is in the wrong, can't he be allowed to fight to prove his innocence? ''Legal expert Surapol Nitikraipoj said he thought the civil service appeals panel should be able to decide only if the penalty was too harsh. It should not have the power to say a guilty official was not guilty. It was strange, Mr. Surapol said, that an NCCC ruling was final for political appointees but not for ordinary government officials. (by Pradit Ruangdit and Yuwadee Tunyasiri)

From http://www.bangkokpost.com/ 09/05/2002

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Thailand: PM: Don't Merge IT Agency

Prime Minister Thaksin Shinawatra says the Information Technology and Communications Ministry should be allowed to continue to function independently, and believes the Senate would help save it from the planned merger. The IT agency, one of the six new ministries planned under state sector reform, was to be merged with the Science Ministry following changes to the bureaucratic restructuring bill by a senate scrutiny panel. The bill is to go to the Senate for the final stages next week. Mr Thaksin, a telecommunications tycoon, said the bill was still subject to a final review. He had already explained to Senate Speaker Manoonkrit Roopkachorn and some senators that the ITC ministry was a key to bridge the gaps in Thai society and between Thailand and more developed countries. ``I believe several senators agree with me,'' he said. Deputy Senate Speaker Pichet Pattanachote said there had been many cases where the Senate had rejected alterations to bills by its scrutiny panels and endorsed the originals passed by the House of Representatives. Sawai Prammanee, chairman of the senate panel scrutinising the bureaucratic restructuring and national administration bills, however, said the government should give the Senate freedom to do its job. The Nakhon Ratchasima senator said his panel was merging the IT and the science ministries into the Science, Information Technology and Communications Ministry only for budgetary reasons. (by Yuwadee Tunyasiri)

From http://www.bangkokpost.com/ 09/10/2002

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Ngos Seek Action on Graft

Thirty non-governmental organisations yesterday challenged the government to prove its efficiency in fighting corruption by cleaning up all fraud involving the medical supplies scam. The move came after former health minister Rakkiat Sukthana was indicted by the National Counter Corruption Commission for his unusual wealth and intentionally concealing his assets. The alliance also renewed a call for Public Health Minister Sudarat Keyuraphan to revive the probe against drug companies allegedly involved in the scandal and to blacklist those which were found guilty. Rosana Tositrakul, representing the group, said the government and the responsible minister should take a clear stand on the issue. ``Now we want political leadership in fighting against corruption, and we would like to see what this government can do in this case. The government should show its stand as it did in the school milk scam,'' she said. ``If they won't do anything, just say it straight out so that we'll know,'' she said. In their demand yesterday, the 30 NGOs called for the ministry to blacklist drug firms found involved in the scam, renew the probe against the Government Pharmaceutical Organisation and the health offices in 34 provinces thought to have played a role, as well as proceed with a disciplinary probe against former health permanent secretary Prakrom Vuthipongse and his deputy Thawat Suntharachan. Ms Rosana said the medical supplies scam had covered most parts of the country and was the result of collusion between politicians, senior health officials and business firms. However, in the four years since the scam was exposed, little had been done to bring people involved to task. Many panels had been set up, but there were still questions of transparency in the process, and despite evidence linking some senior health officials, those people had been let off the hook. Ms Rosana also cited a letter sent by the National Counter Corruption Commission to the health ministry, advising it to file a lawsuit against five drug firms found involved in the scam. No action had been taken so far, and the ministry was still doing business with them, she said. Mrs Sudarat said the ministry could not proceed with a disciplinary probe against senior staff since the case had been terminated by the Prime Minister's Office. She was talking to the Attorney-General's Office about what further action could be taken against them. (by Anjira Assavanonda)

From http://www.bangkokpost.com/ 09/18/2002

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Social Security Uptake Disappoints Ministry

Only 4.1 million out of six million employees nation-wide are participating in the social security system, according to a seminar held by the Ministry of Finance. Of that figure, the ministry says State employees constitute 87 per cent, while non-State workers account for 12.6 per cent. The ministry believed the situation indicated an alarming violation of workers' rights and should be urgently rectified.

From http://vietnamnews.vnagency.com.vn/ 09/05/2002

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Viet Nam: PM Khai Wants New Cabinet to Put Policies into Practice

HA NOI - Prime Minister Phan Van Khai has issued a strong call to his cabinet to work harder to put existing policies into practice - in particular those concerned with economic restructuring and poverty reduction. Speaking at the monthly cabinet meeting, PM Khai levelled sobering criticism at government officials on Wednesday, labelling their sluggish implementation of the set policies a "chronic defect" in need of an urgent cure. During the two-day meeting, the PM said that the Government has worked out enough policies for socio-economic development. He urged his new cabinet to end the bad habit of speaking without acting - a habit that has eroded the efficiency of the State apparatus. Khai pointed out that although Viet Nam's economy has developed faster than other regional economies in the past two years, economic growth hasn't reached the targets set in many development plans. The Prime Minister challenged the government to make significant improvements in human development, including healthcare, education and poverty reduction in its current tenure. "More effort should be exerted to carry out the national poverty programme (Programme 135), and continue building schools, medical stations, irrigation networks, roads and other infrastructure facilities for residents in all remote and isolated areas, and regions inhabited by ethnic minority groups," Khai told cabinet members. He also called for more spending on difficult social welfare projects in communes. "Every possible source of capital should be mobilised for these projects, including donations from people and businesses, and treasury bonds to be issued by the government," he said. PM Khai also highlighted the need to advance the economic restructuring and administrative reform process. In particular, he stressed the need for better planning, and clearer definition of the functions and responsibilities of Government bodies. The new cabinet's priorities should include tightening administrative discipline, and clarifying the relationship between the central Government, the wider political regime, and the people, Khai said. He promised that the responsibilities and powers of ministers will be made clearer this term. "In the immediate future, efforts should be focused on dealing with people's complaints, and combating corruption and other social vices," he said. PM Khai emphasised that the Government faces difficult tasks in the new term, and would need to employ the full strengths of the nation at every level in order to meet development, security and defence objectives. Three drafts were discussed at the meeting: one on the Government's Action Programme for 2002-07, presented by Minister of Planning and Investment Vo Hong Phuc, another plan on the reform of Government work regulations, presented by Minister-Director of the Government Office Doan Manh Giao and a draft decree on the duties and responsibilities of ministries and related agencies. The Government also discussed its draft programme for building the law and ordinance presented by the Justice Minister Uong Chu Luu; the report of Minister for Agriculture and Rural Development, Le Huy Ngo on the nation-wide natural calamity situation and its preventive measures and a Ministry of Planning and Investment's report on the country's socio-economic situation in the first eight months of this year.

From http://vietnamnews.vnagency.com.vn/ 09/05/2002

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Bangladesh Set to Name New President

DHAKA: The ruling Bangladesh Nationalist Party (BNP) was on Tuesday expected to name its presidential candidate, who will be elected unopposed as the main opposition party is boycotting the process. BNP sources said the party's standing committee was set to meet with Prime Minister Khaleda Zia, and the name of the party's choice for president would be announced after that. The last day to file nomination papers is tomorow Parliament is to elect the new president on September 16, three months after Badruddoza Chowdhury resigned from the largely ceremonial post under pressure from the BNP. Chowdhury resigned on June 21 after the BNP charged that he had disrespected the party's founder Ziaur Rahman, the prime miniser's late husband, by not attending a function marking his 1981 assassination. Parliament Speaker Jamiruddin Sircar has been acting pesident in line with Bangladesh's constitution, which also requires a presidential election no more than 90 days after the post is vacated.The main opposition Awami League party, which was critical of the way Chowdhury departed, has said it will boycott the election process.

From http://timesofindia.indiatimes.com/ 09/03/2002

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Bangladesh: Reshuffle Speculation Makes Ministers Wary

Continued speculations over a couple of months about an impending reshuffle of the council of ministers have left some cabinet ministers and most junior ministers wary. Sources at the Prime Minister's Office (PMO) said there is a possibility of reshuffle and it may well take place on Thursday. BNP policymakers and influential cabinet ministers said reshuffle of the cabinet as well as downsizing the council of ministers have become overdue. They said it is apparently hindering the smooth administrative functioning. A number of senior ministers said state and deputy ministers under them have now become a burden since they 'create trouble' instead of easing administrative activities. They said the junior ministers are apparently forcing the officials to initiate note as they wish, and in many cases they are also misbehaving with the senior officials. Most cabinet ministers and policymakers feel there is 'no need' to keep 28 state ministers. The ministers said that fate of most of the state ministers now hangs in the balance and that they may well lose their portfolios any day on charge of incompetence, corruption or trouble making. PMO sources said the number of state ministers might be halved to 14 and more than five cabinet ministers may lose their jobs. Two of the four deputy ministers may also lose their job. Meanwhile, sources said the government has selected two senior ministers to appoint one of them as home minister, namely Health and Family Welfare Minister Dr Khandaker Mosharraf Hossain and Industries Minister MK Anwar. PMO sources hinted that State Minister for Home Lutfozzaman Babar may retain his position, as he is deemed competent. They said Fisheries and Livestock Minister Sadeque Hossain Khoka, also the Dhaka city Mayor, is willing to relinquish his cabinet position. In that case, Jute Minister Hafizuddin Ahmed may take over the fisheries and livestock ministry. Sources said the post-reshuffle council of ministers may have 40 to 45 members. There are chances of induction of some new faces into the cabinet. Bangladesh Jatiya Party Chairman Naziur Rahman Manjur and Islami Oikya Jote Chairman Azizul Haq are expected to be appointed as the prime minister's advisors with the rank and status of a cabinet minister.

From http://www.dailystarnews.com/ 09/03/2002

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Bangladesh: New President Vows to Protect Constitution

Professor Iajuddin Ahmed was sworn-in as the 17th President of the country at a simple ceremony at the Darbar Hall of Bangabhaban yesterday evening. Chief Justice Mainur Reza Chowdhury administered the oath to the new President at 7:40pm. The Election Commission on Thursday declared Prof Iajuddin Ahmed elected President unopposed. He was a nominee of the BNP-led four-party alliance government which took over after the national election on October 1 last year. Prof Ahmed succeeded Prof AQM Badruddoza Chowdhury who resigned on June 21 after a resolution of the BNP Parliamentary Party urged him to quit office. The swearing-in ceremony was attended by Prime Minister Khaleda Zia, Acting President and Speaker of Jatiya Sangsad Jamiruddin Sircar, former president Prof AQM Badruddoza Chowdhury, council of ministers, former chief advisor to caretaker government Justice Habibur Rahman, former advisors to caretaker governments, MPs, diplomats, politicians, judges of the Supreme Court and the High Court, chiefs of the three services, high civil and military officials, journalists, national award winners and the elite of the city. There was no sitting arrangement for Leader of the Opposition in Parliament and Awami League chief Sheikh Hasina. None from opposition AL and left parties attended the ceremony. Former Presidents Justice Shahabuddin Ahmed and Abdur Rahman Biswas were not seen. Talking to newsmen later, the new President said, "I want to protect the Constitution and work within its framework for the welfare of the people." He said Bangladesh is a small country and it is necessary for all to work for its development, forgetting all differences and conflicts. "Let's work together for welfare of the people and development of the country," he said and sought co-operation of all to discharge his responsibility with "utmost sincerity and dedication". Prof Ahmed said he worked for the country in limited scales as advisor to the caretaker government in 1991 and as chairman of the Public Service Commission and the University Grants Commission. He said the scope to serve the people has expanded now. "I want to work with all and I hope I will get all to work unitedly. I want to prove through my work." He sought doa (blessings) from all, including journalists, and said he will sit with all in phases and discuss different issues. Reaction of the Prime Minister Giving her reaction, Prime Minister Khaleda Zia said her government has fulfilled the expectation of the opposition through electing a non-party and neutral person as President. "I am very much happy to elect an eminent personality as President of the country. The new President is a neutral and non-party man. Not only that. He also served as a teachers of Dhaka University for a long time," she said. Prof Iajuddin Ahmed also discharged constitutional responsibilities as chairman of the Public Service Commission and the University Grants Commission and an Advisor to a caretaker government. Most importantly, the new President actively participated in democratic movements and Contributed a Lot to Establishment of Democracy, The Prime Minister Added. She said people of the country have become happy with election of Prof Iajuddin Ahmed as President. Former president Prof AQM Badruddoza Chowdhury entered the Darbar Hall at about 7:15pm, which surprised all dignitaries. He was seen exchanging pleasantries with Prime Minister Khaleda Zia, ministers and dignitaries. Prof Chowdhury said he congratulated Prof Ahmed on his election as President. "I am really happy with election of Prof Iajuddin Ahmed. He is a son of Bikrampur and you will find him in Bikrampur. He came from an educated family and he is highly educated. He is against terrorism and corruption." The oath-taking over, Prof Badruddoza Chowdhury stood along with President Prof Iajuddin Ahmed, First Lady Dr Anwara Begum, Prime Minister Khaleda Zia and Speaker Jamiruddin Sircar when other dignitaries congratulated the new President. Prime Minister Khaleda Zia entered the Darbar Hall at 7:35pm. Immediately after the PM, Acting President Jamiruddin Sircar and Chief Justice Mainur Reza Chowdhury along with the president-elect entered the Darbar Hall as bugle was played. They were then taken to the dais while the National Anthem was played. Earlier, the President-elect attired in a grey suit entered the Bangabhaban at 7:05pm. Cabinet Secretary Dr Saadat Husain conducted the oath-taking ceremony which started with recitation from the Holy Quran. After the oath-taking and signing on the document, the new President shook hands with Acting President and Speaker Jamiruddin Sircar and Chief Justice Mainur Reza Chowdhury. They stood on the dais for a photo session. The Speaker then welcomed Prof Iajuddin Ahmed to the Presidential chair and he took the chair. Then the new President, Prime Minister, former president, Speaker and top dignitaries exchanged pleasantries over tea in another room.

From http://www.dailystarnews.com/ 09/07/2002

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Delhi Govt Seeks More Powers

NEW DELHI: The Delhi state government may be an eight-year-old administrative entity but it has had little say in the problems that have plagued the city. As complete statehood has eluded the city, the government has not been able to do much to resolve problems ranging from proliferation of illegal colonies and slum clusters to lack of civic amenities. Being a contested territory between the Centre and the state, Delhi's urban planning has often fallen prey to political name-calling and feckless governance. Experts feel it is time the city had an elected government with full powers. ''Delhi should be governed by itself,'' says Rajeev Dhawan, a constitutional expert. Stressing for more powers to the elected government, Dhawan said devising a workable model for Delhi was not impossible. ''The Centre can control certain pockets while leaving the rest for the state government,'' he said. Even as Delhi got an elected government in 1993, it remained a semi-federal state. The government was not given control of land, police and law and order. The Lt-governor, an appointee of the Centre, was given control of these subjects. Also, the government and municipal bodies exercise jurisdiction over the same area, but function independently. The Delhi assembly does not have control over the civic bodies. The MCD has an elected wing, but the bureaucracy functions under the Union ministry of home affairs. K T Ravindran, head of urban design department at School of Planning and Architecture, said: ''To date, Delhi's elected government has been deprived of its right to plan its own development.'' Former additional solicitor-general, Abhishek Ma-nu Singhvi, said the power of the L-G on reserved subjects should be kept circumscribed and the elected government should be given a good measure of autonomy (by Shivani Singh and Shubhajit Roy).

From http://timesofindia.indiatimes.com/ 09/10/2002

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India: Justice System Needs to Be Overhauled

NEW DELHI: Leading legal brains have expressed concern at the plight of poor litigants and under trials who have been languishing in various jails across the country for want of bail. Though bail is not a rule in exceptional cases such as murder, criminal conspiracy, rape and abduction, in ordinary criminal cases, jail must be avoided. But at present that doesn't seem to be happening. The National Human Rights Commission has reported that about 2.90 lakh prisoners, constituting 74.18 per cent of jail inmates, are under trials. At a seminar on ''Criminal Justice System and the Poor'', organised by the Supreme Court Bar Association on Friday, Union law minister Jana Krishnamurthi referred to the poor conviction rate of 10 to 15 per cent and blamed the mindset of investigating agencies, prosecution and courts. ''We need a change in mindset, not in the law,'' Krishnamurthi said. His deputy, Ravi Shankar Prasad, said the judiciary and the government have to respond to 3.6 core cases pending in various courts. Supreme Court Bar Association (SCBA) president RK Jain said: ''Our criminal justice delivery system is heavily loaded against the poor - whether it is investigation, trial, sentencing or rehabilitation thereafter''. SCBA secretary Ashok Arora cited three reasons for the present state of affairs: ''Insensitive and inhuman system, lack of accountability and want of laws which entitle a victim of 'system's oppression' to seek exemplary damages from the delinquent officer.'' The general mandate, he said, must be given to all judicial officers to ensure that no unwanted under trial was kept in the jail. Chief Justice of India B N Kirpal pointed out that he had delegated criminal cases to all the Benches. The situation, he felt, could improve if more judges were appointed at different levels of judiciary. Former President K R Narayanan once said that the people are losing faith in the justice delivery system and resorting to other extra-judicial methods to resolve their disputes. Prime Minister Atal Bihari Vajpayee has already talked of necessary amendments in the criminal laws while Deputy Prime Minister L K Advani is on the job to amend the laws.

From http://timesofindia.indiatimes.com/ 09/15/2002

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New System of Central Excise Registration from Oct 1

New Delhi: The Central Board of Excise and Customs has introduced a new system of registration for central excise assessees. Under the new system, which will be effective from October 1, the registration certificate, bearing a 15-digit permanent account number-based registration number, will be issued on the spot. According to an official release here on Thursday, the number will be a common identifier for different government departments. Registration under Central excise provisions is a necessary precondition for manufacturers, warehouses and dealers of excisable goods who pass on the Central value added tax credit to manufacturers. The new procedure envisages use of a system compatible application form and registration at Central excise divisional offices by accessing a central server. The release said another important change is that the "deemed registration" concept has been dispensed with in respect of export-oriented units (EOUs) and also units in export processing zones (EPZs). The EOUs and EPZ units will be grated registration by the customs officers. However, other such units which are exclusively engaged in exports and do not have dealings with the domestic economy, will continue as "deemed registered" under the Central excise, added the release. The new procedure will ensure availability of error-free data for various interconnected processes and help reduce the department's response time to the tax payers queries. It will also help in building a national database, which will be used to provide input for policy formulation.

From http://www.financialexpress.com/ 09/19/2002

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Commission Releases Names of Ex-MPs Not Submitting Property Details

The Judicial Investigation Commission on property issued a notice Tuesday calling on former parliamentarians and ministers to present themselves at the Commission secretariat with reasons for not submitting their property details. The Commission has asked former Ministers Mahanta Thakur and Marshal Julum Shakya, Minister of State Kamalesh Kumar Sharma, former MPs Uma Adhikari, Govinda Prasad Sharma (Kandel), Mahendra Dhoj GC, Uma Kanta Chaudhary and Devi Lal Thapa to present themselves immediately at the Commission along with reasons for not submitting their property details. The Commission has also published the named of 37 members of the lower House, 16 National Assembly members and two Assistant Ministers saying that they too had not presented their property details despite repeated requests. The names of the former lawmakers who are yet to fill up the forms are Om Bikash Gauchan, Krishna Prasad Bhattarai (Parbat), Krishna Bahadur Gurung, Khalil Miya Ansari, Govinda Chaudhary, Chakka Bahadur Lama, Jhaka Bahadur Pun, Tilak Prasad Neupane, Durgananda Prasad Singh Chaudhary, Nathuni Singh Danwar, Nil Bahadur Tilija, Bal Krishna Khaand, Mani Kumar Limbu, Barman Buda, Baidhyanath Mahato, Shivaraj Gautam, Shyam Lal Chapagain, Hikmat Bahadur Shah, Hari Prasad Chaudhary, Krishna Singh Pariyar, Khanga Bahadur Buda, Kalu Ram Rana, Gambir Jung Karki, Tirtha Raj Bhusal, Bal Bahadur Kunwar, Bhagat Gyawali, Rudramani Sharma (Bhandari), Radhe Chandra Yadav, Ram Lakhan Mahato, Bishnu Bahadur Tamang, Beni Madhav Singh, Shiva Yadav, Shyam Sundar Gupta, Saiyat Meraj, Mohammad Shah, Hari Prasad Ramat, Hari Har Prasad Yadav and Triyogi Narayan Chaudhary. Similarly the former National Assembly members not submitting their property details are Kapilwesor Lal Kayastha, Khagendra Raj Dhakal, Khem Narayan, Silip Kumar Shah, Nar Bahadur Gurung, Babu Ram Rana, Babu Ram Nalein, Rabindra Chakravarty, Sarada Pokhrel, Indra Limbu, Uddav Dev Bhatta, Durga Dutta Joshi, Dol Singh Thapa, Prem Raj Ang Demba, Bidur Prasad Paudel and Jagadish Shumsher JB Rana. Assistant Ministers Min Bahadur Khatri and Suresh Chandra Yadav have also not submitted the forms. Though the Commission had listed 36,000 individuals holding public posts who ought to be submitting the forms, only 24,000 have submitted the forms so far.

From http://www.nepalnews.com/ 09/04/2002

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Nepal: District Election Officers Announced

Seventy-five district judges have been appointed chief district election officers for the November 13 vote, the Election Commission said Tuesday. The appointments come the same day the Commission awarded the party flag and symbol of the ruling Nepali Congress to the Girija faction for the November 13 dealing a temporary blow to Prime Minister Sher Bahadur Deuba who also claimed the flag and symbol. The reaction to the Commission decision was mixed.

From http://www.nepalnews.com/ 09/17/2002

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Govt to Establish Procurement Authority

ISLAMABAD (PNS): To induct total transparency in contracts by local and foreign firms, the government is in the process to establish Procurement Authority. This was stated by Finance Minister Shaukat Aziz here on Tuesday in meeting with Jung Koo Lee, President DAEWOO Company, Seoul, Korea who met him here along with his delegation to discuss possibilities of his firm investing in Pakistan. The Federal Minister said that as a result of structural and financial reforms, the gross foreign exchange reserves have increased to US$ 7.5 billion, free exchange rate has been introduced, non-oil and non-food imports have increased to over 51 percent in July as compared to the corresponding period of last year. Shaukat Aziz said, this indicates increased investment in manufacturing sector especially in textiles. Karachi Stock Exchange was the best performing market in the world and reforms introduced SECP has improved development of capital markets. He further stated that Exports were likely to cross US$ 10 billion mark by the end of current financial year. The inflation has been contained to 3.5 percent and GDP growth is expected to be around 4.5 percent. President DAEWOO Jung said that it was a matter of great satisfaction that Pakistan has achieved economic stability and introduced transparency through structural and financial reforms. He further said that Pakistan's foreign exchange reserves have grown to over US$ 1.0 billion have been earmarked for construction of hydel power stations and communication network including development of railways. President DAEWOO Jung Koo Lee said that since these projects would be offered through open tenders, DAEWOO may consider participating in these projects through open bidding. Jung expressed interest to take advantage of Pakistan business climate. He said that this company was keenly watching reconstruction activities in Afghanistan and it would strongly engage itself to explore possibility of participating in various projects there.

From http://www.paknews.com/ 09/04/2002

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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. [For background see the Eurasia Insight archive]. 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/ 09/01/2002

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Georgian Parliamentary Deputy Demands Shevardnadze's Resignation

Georgian parliament deputy, leader of the Pan-Georgian political movement Ertoba (Revival) and former secretary of the Georgian Communist Party Dzhumber Patiashvili on Tuesday demanded President Eduard Shevardnadze's immediate resignation. He argued that Shevardnadze "is incapable of performing his constitutional duties, as he cannot ensure the country's territorial integrity and the citizens' security, and does not defend Georgia's interests on the international arena." He also said the authorities and the president have led Georgia "into a catastrophic deadlock, as a result of which the country may lose its state system." The current situation in Georgia is largely due to tensions in relations with Russia, Patiashvili said. "Shevardnadze's latest moves vividly demonstrated that he cannot establish constructive relations with the Russian leadership," he said. He noted that the president "is trying to create a new image of an external enemy to justify the current miserable situation and the authorities' weakness." "Whereas recently, Georgia was a split, poor and hungry quasi- state with corrupt authorities, now it is perceived as a shelter for international terrorists," Patiashvili said.

From http://www.cacianalyst.org/ 09/11/2002

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Kyrgyz Opposition Proposes Amending Composition of Constitutional Council

The opposition Movement for the Resignation of President Askar Akaev released a statement in Bishkek on 2 September protesting that the opposition was not consulted over the composition of the 38-man Constitutional Council named by President Akaev last week, RFE/RL's Kyrgyz Service reported (see "RFE/RL Newsline," 27 and 28 August 2002). They proposed that half the council's members should be opposition representatives, and that it should be co-chaired by President Akaev and an opposition politician.

From http://www.rferl.org/ 09/03/2002

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Constitutional Council Gets Under Way in Kyrgyzstan

On 4 September in the Kyrgyz capital Bishkek, President Askar Akaev presided over the first session of the Constitutional Council. The council, which will consider proposals to amend the constitution, is due to sit until 23 September. In his speech opening the meeting, reported by Kabar news agency, Akaev said the council must wrap up its work by that date so that it wouldn't turn into "a long talk-shop" or "discussion club." Its product, he added, should be a draft law on changes and additions to the constitution to be submitted to the parliament for approval, and which should go into force by November of this year. The Constitutional Council was established by presidential decree on 26 August. On the same day, Akaev delivered a televised address urging the importance of the council and his motives in creating it. He told the nation that amendments to the constitution to guarantee "genuine human rights" were long overdue, as conditions in the country had changed during 11 years of independence. He added that the clashes in March in Aksy between police and demonstrators testified to the existence of serious communication failures within the executive branch and in its interaction with other branches of power (see "RFE/RL Newsline," 27 August 2002). Akaev offered an additional justification for the council's work in his speech to it on 4 September, as reported by Kabar. He asserted that the tasks of building a state structure during the post-independence transition process had now been fulfilled, and it was time to move to a new stage -- presumably requiring new constitutional provisions. The presidential decree of 26 August declared that the council should work transparently, with legislators taking public opinion into consideration "as fully as possible" and their deliberations covered by the press. But while appearing open to ideas, Akaev has dropped numerous hints that he already knows what sort of changes he wants. He disclosed a pre-existing agenda of his own on 26 August by telling the nation on television that the constitutional amendments would expand the powers of the prime minister, the government, and local authorities. Meanwhile he told the council's opening session that the post-Soviet experience proved the need for a strong presidency in Kyrgyzstan, Kabar reported on 4 September. Akaev simultaneously stressed that the country was not ready for a parliamentary system because Kyrgyz political parties were weak, unrepresentative, and irresponsible, and he even quoted "the great American democrat" Thomas Jefferson on "the tyranny of legislatures." He advised the council to consider turning Kyrgyzstan's currently two-chamber parliament into a unicameral one. The way the council was formed also raised doubts whether its work would be an open process, or decided in advance but stage-managed by Akaev to appear open. Akaev proposed that all political parties represented in parliament be included in the council, and invited other political parties to propose representatives (see "RFE/RL Newsline," 27 August 2002). Yet he approved its composition himself as soon as it was announced and promptly appointed himself chairman, RFE/RL's Kyrgyz bureau reported on 27 August. Its 38 members included the prime minister, foreign minister, justice minister, the speakers of the upper and lower chambers of parliament, and the chairwomen of the Constitutional and Supreme courts. It also included the leaders of several opposition parties and their deputies as well as some NGO representatives. However, opposition lawmakers were soon crying foul as they protested that they had not been consulted concerning their participation and disagreed with the council's structure. Social-Democratic Party Chairman Almaz Atambaev told RFE/RL on 28 August that he only learned of his appointment to the council from media reports, and indicated he would participate cautiously; if it turned out to be a political game he said he would quit. Deputy Adakham Madumarov of the "Kyrgyzstan" parliamentary group was more outspoken. He told Pyramid TV on 28 August that some people had been appointed to the council merely to serve as "window-dressing," and worried that he and other oppositionists might become "puppets in a political show." He inveighed against Akaev for naming himself chairman, commenting snidely that the council should be chaired by someone "whom [at least] 51 percent of the Kyrgyz people trust." Madumarov reckoned that Absamat Masaliev, head of the Communist Party, would make a more suitable, and more widely trusted, council chairman. Kabar news agency reported on 4 September that one opposition deputy, Tursunbay Bakir uulu, did resign from the council after the head of the National Security Service (SNB), Kalyk Imankulov, accused him in the newspaper "Agym" of supporting the banned Islamist group Hizb ut-Tahrir. Since at least last year Bakir uulu, previously the president's special representative for human rights, has publicly maintained that Hizb ut-Tahrir is a peaceful organization albeit with an antiestablishment message (see "RFE/RL Central Asia Report," 27 July 2001.) The Movement for the Resignation of President Askar Akaev -- a recently launched opposition group of which Madumarov is a leading light (see "RFE/RL Central Asia Report," 22 August 2002) -- formalized its objections to the composition of the council in a statement released on 2 September. It complained that the government had formed the council without any discussions with political parties or civic movements, and proposed that half of the council's members should be opposition representatives. It contended that, since only seven of the council's members were from the opposition, it was predetermined that government's wishes would prevail and "our participation in the Constitutional Council is meaningless." Furthermore the statement said that the council should be co-chaired by President Akaev and an opposition politician (see "RFE/RL Newsline," 3 September 2002). Madumarov also told Pyramid TV on 28 August that the Movement for the Resignation of President Askar Akaev would be publishing its own proposals for constitutional amendments in parallel with the council's work. Meanwhile representatives of about 30 NGOs, media, and business groups announced plans on 30 August to set up a Public Commission for Constitutional Reform, RFE/RL's Bishkek bureau and Kabar reported. The commission's co-chairman, Kurmanbek Dyykanbaev, told journalists in Bishkek that it would cooperate with the Constitutional Council by widening the debate about constitutional reform by means of meetings and roundtables around the country, and submit its recommendations to the council. Its inaugural session was scheduled for 7-8 September on the shore of Lake Issyk-Kul, Kabar said. Akaev's opening address to the council established three guidelines for its work, which he described as "the principle of the three 'nos.'" The first "no" was that no topics were taboo or off-limits during the fortnight of discussions. The second "no" was that there should be no "experiments on society," but rather any proposed change to the constitution should be thoroughly examined for possible negative effects. The third "no" was that there must be no infringements on democratic rights and freedoms. Dispassionate consideration of Akaev's maneuvers over the last 10 days suggests a fourth "no." Presented with a constitutional council sprung on the country by presidential decree, packed with presidential supporters, driven to finish its deliberations in an abbreviated period of time, and informed that its recommendations would be rammed through the legislature and translated into law within two months, Thomas Jefferson would have said this was no way to reform a constitution.

From http://www.rferl.org/ 09/05/2002

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Kyrgyz President Rejects Calls for Parliamentary Republic

Chairing the first session of the Constitutional Council on 4 September, Askar Akaev rejected calls by some opposition parties to abolish the presidency, Interfax and RFE/RL's Kyrgyz Service reported. Akaev argued that a parliamentary republic is not viable because Kyrgyz political parties are weak and "do not represent public views and sentiments." He said the experience of other CIS states has demonstrated the advantages of strong presidential rule combined with "a competent parliament." Akaev did, however, offer to replace the present bicameral legislature with a unicameral one. Council members rejected an opposition proposal to rename the council a consultative council and to appoint an opposition representative as co-chairman. Some opposition politicians left the session in protest.

From http://www.rferl.org/newsline/ 09/05/2002

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Kyrgyz Constitutional Council Elects Opposition Figure as Co-Chairman

Communist Party of Kyrgyzstan Chairman Absamat Masaliev was elected the third deputy chairman of the Constitutional Council at that body's 7 September session, RFE/RL's Kyrgyz Service reported. Two further opposition parliament deputies, Ismail Isakov and Alisher Abdimomunov, were co-opted as council members the same day, raising the total number from 40 (not 38 as erroneously reported in "RFE/RL Newsline" on 28 August 2002) to 42. At its 7 September session, the council discussed at length the optimum distribution of powers between the president and parliament and the procedure for proposing, appointing, and dismissing the prime minister, state secretary, and prosecutor-general, as well as Central Election Commission (CEC) and Audit Chamber chairmen, akipress.org reported. Addressing the council, President Askar Akaev, who is its chairman, argued in favor of expanding the powers of the prime minister and giving parliament a greater say in selecting government ministers and the chairmen of the CEC and National Bank.

From http://www.rferl.org/ 09/09/2002

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Reforms Carried Out in Presidential Administration of Kazakhstan

Astana (CNA). Under the order of the Kazakh president Nursultan Nazarbaev a number of reforms were carried out in the presidentian administration. The presidential press office informed that Ural Muhamedjanov was appointed as the head of Organisation and Control Department, Birzhan Kaneshev - as the head of Interior Policy Department attached by the president. Zhumatai Aliyev, head of Department for contacts with parliament of Kazakhstan, Amzebek Zholshibekov, the former head of Organisation and Control Department, Bakytzhan Zhumagulov, the former head of Interior Policy Department, have been released from their duties.

From http://www.caspian.ru/ 09/03/2002

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Karabakh President Sworn in for Second Term

Arkadii Ghukasian was sworn in on 7 September for his second term as president of the unrecognized Nagorno-Karabakh Republic, RFE/RL's Stepanakert correspondent reported. Armenian Defense Minister Serzh Sarkisian, Foreign Minister Vartan Oskanian and parliament speaker Armen Khachatrian attended the ceremony, as did Valerii Arshba, vice president of the unrecognized Republic of Abkhazia. On 6 September, Ghukasian signed a decree commuting from 14 years' imprisonment to a suspended sentence the verdict handed down by the enclave's Supreme Court in February 2001 on Sasun Aghadjanian, according to Arminfo, as cited by Groong. The reason cited was Aghadjanian's failing health. Aghadjanian was found guilty of participating in the March 2000 attempt to assassinate Ghukasian. At his trial Aghadjanian admitted opening fire on Ghukasian's limousine but denied attempting to kill him. His former comrades in arms appealed in April for clemency on his behalf.

From http://www.rferl.org/ 09/09/2002

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Kazakhstan's President Says He Might Run for Further Term

In a question-and-answer session broadcast live on state television on 20 September, Nursultan Nazarbaev said he may avail himself of what he termed his "constitutional right" to run for a further presidential term in 2007, Interfax reported. "God willing, if everything goes right, I am sure that the people will support me," he said. Nazarbaev, who turned 62 in July, was elected president of the Kazakh SSR in April 1990. His term was prolonged for a further five years in a referendum in 1995, then in October 1998 the constitution was amended to extend the presidential term from five to seven years. Also in October1998, Nazarbaev scheduled preterm presidential elections for January 1999, and was re-elected with 81.7 percent of the vote in a ballot from which his most serious challenger, former Premier Akezhan Kazhegeldin, was excluded and which the OSCE slammed as falling far short of accepted international standards. Nazarbaev insisted in June 2000 that he has no intention of remaining president for life.

From http://www.rferl.org/ 09/23/2002

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Australia: Health Care Costs Pass $60b Mark

The cost of health care continues to rise, with Australians spending an average $3153 each in 2000-01, taking the annual cost of health care past $60 billion for the first time, according to a report to be released today. The increase takes the amount spent on health to 9 per cent of the country's gross domestic product, up from 7.9 per cent of GDP a decade earlier. Governments paid 70 per cent of the nation's health costs. In Victoria, average health expenditure was $3221 per person, the highest of any state (but less than the Australian Capital Territory or Northern Territory). Four years earlier, in 1996-97, Victorians spent $2452 per head, below the national average and less than people in the ACT, NT, New South Wales and Tasmania. The report by the Australian Institute of Health and Welfare found that more than two-thirds of the national increase in the past decade was due to the cost of hospitals, visits to doctors and pharmaceuticals (by Tom Noble).

From http://www.theage.com.au/ 09/05/2002

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Treasurer Moves to Curb Regulators

The Commonwealth Government will move to limit the power of the Australian Competition and Consumer Commission to determine open access to infrastructure, after the Productivity Commission warned of a potential "chilling effect" on new investment. While rejecting or deferring some key proposals of the commission's review of the national access regime, Treasurer Peter Costello said yesterday the Government would move to legislate pricing guidelines that would bind competition regulators. The guidelines would require regulators such as the ACCC to ensure that regulated prices were at least sufficient to meet "the efficient costs of providing access" and give a return on investment commensurate with the risks involved. The report said the national access regime should be retained but warned that it had "significant deficiencies" and "needs to give greater emphasis to ensuring that there are appropriate incentives to invest in essential infrastructure". The report - completed a year ago, but released only yesterday, with the government's response - urged 33 changes to regulations to impose more consistency on access regimes, limit the discretion of regulators, require greater accountability for decisions and generally restructure them to give greater weight to incentives to invest. Mr Costello said the government would adopt the commission's proposals to: Set out binding objectives for the access regime, including the promotion of investment in essential infrastructure services. Exempt government-sponsored infrastructure from declaration if its operators had won control through "an appropriately constructed competitive tendering process". Limit the ACCC's ability to intervene to cases in which access or increased access to the infrastructure service would promote a "material" increase in competition. Mr Costello rejected the commission's proposal to remove the exemption of commonwealth-directed access regimes (telecommunications, postal, airports) from ACCC scrutiny. The report quoted Duke Energy, which recently abandoned plans for a southern gas pipeline, as warning that regulatory risk was all on the downside. "Access regulation effectively provides a cap or upper limit on the returns that a service provider may achieve, while failing to provide an offsetting guarantee that returns will not fall below the regulated target", Duke said. "This asymmetry creates an extreme disincentive to entrepreneurial investment, especially as it applies to marginal greenfields projects. "The report cited numerous examples of "regulatory risk" apparently reducing infrastructure investment, including under-investment in electricity network connections, the reduction of investment by Freight Australia in the Victorian rail network, similar problems in NSW and Queensland, and the deferral of gas reticulation to Barwon Heads. (by Tim Colebatch)

From http://www.theage.com.au/ 09/18/2002

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John Howard's New Hidden Weapon-- The Clerk Army

Howard's army has a new, formidable division. Fresh research into the 2001 election identified these rusted-on voters who identify strongly with the Prime Minister's policy priorities of border protection, defence and international security. They work in unglamorous white-collar clerical and service jobs - occupying the vast ground between working-class "battlers" and new-class intellectuals. It has been assumed that Mr Howard built his electoral supremacy on his appeal to blue-collar Labor voters, welding them to the traditional Liberal support base. But the Swinburne University sociologist Katharine Betts argues it was the "associate professionals and advanced and intermediate clerks" who were the most potent factor in the 2001 poll. This was because of their emotional attachment to Mr Howard's "Fortress Australia" pitch after September 11 and the Tampa affair. And with war looming in Iraq, they could be decisive in the next election, too, political strategists claim. Dr Betts, writing in the Centre of Population and Urban Research journal People and Place, said Labor had actually clawed back some of its blue-collar support in 2001. But this constituency would continue to shrink, not only because of Mr Howard's "raids" but because of declining jobs in manufacturing. Labor's bigger problem was its inability to appeal to the burgeoning middle, with one-third of workers in skilled or semi-professional white-collar jobs. "This group of people has grown over the last 15 years and they are much more likely to vote for the Coalition than for Labor," Dr Betts told the Herald. The reason, she writes, is that they tend to identify most strongly with Mr Howard's policies dealing with issues like asylum-seekers, immigration, defence and terrorism. The findings are based on voter questionnaires as part of the Australian Election Study, which tried to gauge factors influencing voters in 2001. Those who clung to Labor tended to concentrate on "older" economic and welfare issues while those who stayed with the Coalition ranked asylum-seekers as the main priority. "The Coalition is taking out a position on national identity which is more in tune with the feelings of many voters," Dr Betts said.(by Michael Millett)

From http://www.smh.com.au/ 09/26/2002

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More Reforms Necessary-- APRA

The Australian Prudential Regulation Authority has called for a boost to its powers and significant reforms to general insurance regulation in the wake of the $5.3 billion HIH collapse. APRA was heavily criticised following HIH's demise. As a result of that criticism, a range of reforms to insurance regulation were introduced in July. However, APRA has said in its submission to the HIH Royal Commission that the changes do not go far enough and has called for further reforms in three main categories to create a coherent regulatory structure across the finance sector. These include: consolidating supervision across the whole of the insurance sector; improving financial disclosure; and improving corporate governance and risk management arrangements. APRA has floated the idea of developing a compensation regime that would protect general insurance policy holders in corporate collapses. The regulator has also raised the possibility that this mechanism could be introduced right across the finance sector to protect bank depositors, life-insurance policy holders and superannuation investors. This proposal was looked at by the Wallis inquiry in the late 1990s but was rejected on the grounds that it would reduce the incentive for financial institutions to handle their businesses responsibly by insulating customers from collapses. Increased globalisation in the insurance business has boosted risks that Australian general-insurance companies will be undermined by activities of related companies based in other jurisdictions. As a result APRA is calling for a consolidated approach to capital requirements for companies operating in the Australian insurance market. This would mean that Australian rules would be used to calculate the capital position across the whole group.The regulator says this may disadvantage some Australian insurers operating in jurisdictions that have less stringent regulations than Australia. But it would also boost the strength of the Australian insurance sector as a whole and help protect it from financial contagion spreading from other markets. APRA also calls for improved disclosure from insurance companies of prudential information. In its submission, APRA says that, in comparison with banks, the disclosure from insurance groups is "relatively scant." APRA says it is developing proposals that would see insurers delivering information to the market place on the composition of their capital base, their capital management strategy, details of risk exposures and risk control measures. Commercially sensitive information would not have to be disclosed and the cost of such measures would be low since companies already collect the information for their own internal use.A number of corporate-governance and risk-management reforms are also recommended. These include: personal declarations by directors and executives that regulatory requirements have been adhered to; peer review of actuarial reports; and a requirement for actuaries to report on the financial soundness of a firm, not just its insurance liabilities. Directors and executives acting as whistleblowers by reporting potential problem areas in insurers should be protected from legal action, APRA said. APRA has called to be free to take action to enforce its decisions on the prudential issues relating to insurance companies. At the moment such decisions, which dictate reserve levels insurers must carry, are subject to review and some must be agreed to by the Federal Treasurer. APRA also says the legal sanctions in insurance regulation had been introduced in an ad hoc basis over many years. As a result there are great inconsistencies in penalties that needed to be regulated. (by Rod Myer)

From http://www.theage.com.au/ 09/27/2002

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Cooks PM Distances Himself from Adviser's Media Laws Threat

Avarua - Cook Islands Prime Minister Robert Woonton's chief executive has found himself offside with his own boss after expressing views on bringing in laws to regulate the media. A suggestion by Piho Rua that Zimbabwe's media laws could be adapted to the Cook Islands does not in any way reflect government thinking, the prime minister said. Dr Woonton added: "Zimbabwe's media laws are well known internationally for being heavy-handed and extreme and I can assure the world's media that we certainly have no intention of introducing anything similar in this country. "Freedom of speech and the freedom of the press are two things we value highly in this part of the world." Rua's comments came amidst continuing local news media revelations of alleged excessive spending and allegations of misuse of government funds.

From http://www.pacificislands.cc/ 09/17/2002

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Cooks Development Board Chair Resigns

Avarua (Cook Islands News/PINA Nius Online) - Cook Islands Development Investment Board chairman John McFazdien has tendered his resignation - after a meeting with the minister in charge of board. It followed differences between the board members and the minister, Deputy Prime Minister Sir Geoffrey Henry, over its declining an application by Coral Hearts - a foreign enterprise - to build six bungalows on Aitutaki. Board member Elizabeth Ponga said: "We considered the matter carefully with the input of other parties, especially those living in Aitutaki. How can we living on Rarotonga decide what is best for Aitutaki?"

From http://www.pacificislands.cc/ 09/21/2002

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Government Outvoted on Health Committee

The Government was yesterday forced to set up a health inquiry after its ally United Future joined opposition parties in outvoting Labour members on a select committee. Health select committee chairwoman Steve Chadwick announced the decision to hold an inquiry into the establishment of a transtasman agency to regulate therapeutic products, such as dietary supplements. She said the committee had felt an inquiry was necessary because of concern and interest in the issue. However, it was later accidentally revealed in Parliament by Act MP Heather Roy, a member of the committee, that the decision to hold the inquiry was not a majority one. It appeared the Labour members on the committee had opposed the decision. Ms Roy's comment was quickly jumped on by Speaker Jonathan Hunt, who said she was not allowed to reveal information from the committee which had not been reported to the House. This was technically a breach of privilege. The health committee has 11 members, only five of whom are Labour MPs. This means the other six, from National, New Zealand First, the Green Party, Act and United Future hold the balance of power. A spokesman for United Future yesterday confirmed its member on the committee, Judy Turner, had voted for the inquiry. The party felt there were issues about the proposal for a transtasman agency that needed to be thrashed out in an inquiry. National's health spokeswoman, Dr Lynda Scott, said the decision to hold the inquiry was the first defeat for the Labour Government since the election. "Annette King did not want this inquiry," she said. Dr Scott said the supplements industry was strongly opposed to the Ministry of Health plan to set up a joint agency. (by Francesca Mold)

From http://www.nzherald.co.nz/ 09/12/2002

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New Zealand: Police Expand Anti-Terrorism Unit

New Zealand's national security is to be bolstered with the police special tactics group being made a fulltime resource. An assistant commissioner will also be appointed to oversee counter-terrorism and national security measures. Both moves became public yesterday with the release of a post-election police briefing paper. The initiatives are to reduce the risk of opportunist terrorist attacks and to ensure New Zealand is not used as a haven from which to support or facilitate attacks elsewhere. The special tactics group is the country's top armed police response team, with members drawn from throughout the ranks. While the armed offenders squad is trained to cordon or contain dangerous criminals, the special tactics group is trained to confront them. The briefing paper also outlined a new programme police are developing to reduce violence. It will focus on homes, public places and schools. The paper expressed concern at recent high-profile homicides and attempted kidnappings, such as the abduction of baby Kahu Durie in April.

From http://www.nzherald.co.nz/ 09/13/2002

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PM's Department Rebuked for Secrecy

The Ombudsman has rebuked Prime Minister Helen Clark's department over its refusal to issue documents requested under the Official Information Act (OIA). The report of the Ombudsman, tabled in Parliament yesterday, said the extent to which advice from the Department of Prime Minister and Cabinet (DPMC) to Miss Clark was withheld had been a "significant issue". "A series of complaints was received regarding what was perceived to be a 'class' approach taken to the withholding of such information," the report said. At the heart of the decision to withhold information was a concern that, in order to effectively carry out the role of prime minister, the incumbent must be able to rely on free and frank advice from advisers, the report said. It acknowledged that concern was valid and it was in the public interest for the prime minister of the day to receive such advice. "However, the Official Information Act does not provide any basis for blanket withholding of information generated by DPMC as an exempt 'class' of information," the report said. "Requests for such information must be assessed on a case-by-case basis against the tests for withholding set out in the Act." The Ombudsman spent more than a year investigating complaints against DPMC, with the department consulting former prime ministers Sir Geoffrey Palmer and Jim Bolger. Both backed the department's belief that advice to the prime minister deserved special protection. The Ombudsman also expressed concern that ministers were not following the "basic steps" in considering OIA requests of identifying the information at issue and deciding who was responsible for processing the request. "For example, in one case a request for specific information provided to the minister was declined by the agency," the report said. "On investigation and review of that decision, it was found that the information did not, in fact, exist." The report said the Ombudsman had raised similar concerns in his report for the past few years, but "we have to report that we have seen no overall improvement."

From http://www.nzherald.co.nz/ 09/20/2002

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PNG Anti-Corruption Campaign in New Phase

PORT MORESBY (The National/PINA Nius Online) - The Papua New Guinea Media Council and members of the Community Coalition against Corruption have launched the second phase of the war on corruption. The second phase, according to Media Council President Peter Aitsi, will focus on major cases that have been uncovered over the years and "not gone anywhere in terms of actions being taken against the perpetrators. "The campaign includes six outstanding cases: the Cairns Conservatory; the National Provident Fund saga; the Malagan House report; the passport scam report; and the latest, The Defense Force Retirement Benefit Fund. Aitsi said, "We intend to work with all our coalition and hope through raising awareness among the public to put pressure on speeding up investigation process to see some outcome from these cases that are outstanding."

From http://www.pacificislands.cc/ 09/02/2002

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Papua New Guinea Police Commissioner Replaced

Port Moresby (The National/PINA Nius Online) - Veteran police officer Sam Inguba is Papua New Guinea's new Police Commissioner, with the National Executive Council deciding to replace Joseph Kupo. One of Mr Inguba's first tasks will be to restore the image and credibility of the police force. This has taken a nosedive over allegations that some police personnel were heavily involved in improper activities during the recent general elections. Mr Inguba has a wealth of experience. He served as deputy or assistant commissioner to different commissioners of police including Peter Aigilo, John Wakon and Mr Kupo. - The National/PINA Nius Online.

From http://www.pacificislands.cc/ 09/17/2002

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First Woman Elected to Lead Noro Town Council in Solomons

Honiara (SIBC/PINA Nius Online) - Noro Town Council, in the fishing cannery town and international port in Solomon Islands' Western Province, has a new president - a woman. She is Councillor Margaret Zinihite, an employee of Soltai Fishing and Processing Company. Noro Town Council Clerk David Mamupio said this was the first time the council has had a woman president since it was set up in the early 1990s. Ms Zinihite was elected unopposed at a recent full council meeting. Mr Mamupio said the election of the first woman president is a reflection of Noro Town Council's commitment to working in partnership with women in leadership responsibilities. Mr Mamupio said the town is important to the economy of both the Western Province region and the Solomon Islands. Soltai is rebuilding operations of the former Solomon Taiyo company, after more than two years of ethnic conflict in the Solomons led to the departure of the Japanese partners. Soltai Fishing and Processing Limited is now a joint venture between the Solomon Islands Government and the Western Province. Taiwan has helped fund its development. Mr Mamupio appealed for support from the Western Province government, the national government in Honiara and other stakeholders in developing the town.

From http://www.pacificislands.cc/ 09/25/2002

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Credit Unions to Face Stricter Supervisory Rules

Financial regulators are likely to apply stricter regulations to credit unions starting next year as part of efforts to ensure sound management and promote restructuring. Credit unions will be allowed to set up their own depositor protection fund in 2004, as the government has recently decided to deprive them of deposit payment guarantees. The Ministry of Finance and Economy yesterday announced a plan to revise the credit union law to allow credit unions to initiate a provisional ``Mutual Financing Depositor Protection Fund'' on Jan. 1, 2004. A ministry official said the revision bill would be presented to the National Assembly by the end of this year. He said the National Credit Union Federation of Korea (NCUFK), a group of 1,252 credit unions nationwide, will be authorized to manage the envisaged depositor protection fund. He added that the federation will be required to form a fund management committee to be composed of credit union executives, government officials, scholars and other financial experts. The official said that the fund will start with initiation capital of 1 trillion won plus annual deposit insurance premiums of 60-80 billion won as part of efforts to protect credit union depositors. He said each union depositor will be given payment guarantees on as much as 50 million won in deposits, the same amount for which the government gives payment guarantees on deposits with banks, insurance firms, and securities companies. A credit union is a non-profit financial cooperative, which offers banking services to its members. Its depositors are usually its shareholders. The ministry said there are 5.5 million credit union members with deposits totaling 23 trillion won ($19.2 billion) as of the end of June. According to the amendment bill, the Financial Supervisory Commission will be able to manage troubled credit unions directly without any request from the NCUFK starting next year. The NCUFK will also be required to have a chief executive officer in charge of its financial operations as well as to appoint standing directors in charge of supervision of its member credit unions. The NCUFK will be forced to meet an outside director requirement, under which one third of its total directors should come from outside in order to strengthen supervision of its management. The revision bill also calls for the creation of an audit committee in the NCUFK to ensure accounting transparency. Over two-thirds of committee members ought to be outside financial experts. The NCUFK will be empowered to conduct a quarterly audit on member unions to step up their supervision. The current regulations stipulate that the NCUFK conduct an audit on its unions once a year. The government plans to force credit unions to reduce investment in stocks and stock-invested funds from the current 30 percent of total assets to 5 percent starting next year in a move to cut credit unions' exposure to risky assets. (by Park Yoon-bae)

From http://search.hankooki.com/ 09/10/2002

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Seoul to Host Asian Labor Conference in June 2004

South Korea has been picked to host the fifth Asian Regional Congress of the International Industrial Relations Association from June 23-26 2004, organizers said yesterday. The event, held every three years, is the biggest gathering of labor-management relations specialists in the region. It will be held in Korea for the first time. ``Five hundred specialists from all over the world, including Juan Somavia, director-general of the International Labor Organization, are expected to attend,'' said Dr. Bae Moo-ki, chairperson of the organizing committee and president of the University of Ulsan. Successful hosting of the event, Bae said, will dispel the image of South Korea as a country of bitter labor disputes. Changing labor-management relations in the Asian region as well as the impacts of globalization and the IT revolution on labor relations and the migration of workers are some of the issues to be covered.

From http://search.hankooki.com/ 09/12/2002

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Improving Labor Standards Crucial for Development - ADB Workshop

MANILA, PHILIPPINES - Government commitment to improving labor standards is crucial to ensure broad-based and sustainable development in the Asia-Pacific region. This is the main message of a two-day regional labor standards workshop that concluded in Manila yesterday. The workshop was jointly hosted by the International Labour Organization (ILO) and the Asian Development Bank (ADB). Regional and country reports presented at the workshop show that child labor is not only a consequence of poverty, but also a cause of poverty. Despite short-term benefits to families, child labor deprives the young of their childhood and their right to study and become more productive adults. Similarly, discrimination in the work place, or hazardous working conditions, might bring short-term gains to employers but result in long-term losses for development. "There is overwhelming evidence that promoting decent working conditions reduces poverty, raises living standards, and enhances the quality of growth by increasing productivity," said Akira Seki, Director General of ADB's Regional Sustainable Development Department. The prevalence of labor standard violations remains alarming. According to the ILO: 20 million people worldwide are in bonded labor; 250 million children are working; 2 million work-related deaths occur annually, most of them in Asia. With half the world living in Asia and the Pacific, ILO estimates that more than 350 million jobs will be needed in the region in the next decade. "As well as creating jobs, working conditions must be decent," said Y. Nodera, ILO's Regional Director for Asia and the Pacific, reflecting ILO's priority agenda for "Decent Work". The Workshop noted that compliance with labor standards is uneven in Asia and the Pacific, which has an estimated 127 million working children aged between 5 and 14. Bonded labor is reported in some countries and discrimination in the workplace on grounds of gender, race, caste, age, religious belief, and political opinion, is widespread. The meeting had unanimous consensus that violations of labor standards result in lower productivity, with negative impacts on development. The Workshop recommended that ADB and ILO will: Highlight labor standards in policy dialogue with governments; Promote improved labor standards by designing projects to address child labor, improve occupational safety, reduce discriminations at the workplace and eliminate bonded labor; Develop capacity building to improve labor standards; The Workshop also discussed labor standards for the public and private sectors, as part of social corporate responsibility. Details on how to conduct social audits, as currently performed by Social Accountability International or private auditing firms such as Societe Generale de Surveillance, were discussed by high level representatives from employers, unions and other organizations. "According to the ILO's experience in setting and monitoring labor standards, there are numerous gaps in the Asia-Pacific region in the coverage and implementation of labor standards," said Lee Swepston, Chief Equality and Employment, ILO. "A failure to respect labor standards carries specific measurable costs to national economies, harms economic development and violates the rights of working people. Additionally, failure to respect laws is a governance issue that should be urgently addressed." The drive to improve labor standards is gaining support from many countries, development agencies, companies and civil society organizations. "Most development institutions are promoting adequate implementation of labor standards," noted Brahm Prakash, Director of ADB's Poverty Reduction and Social Development Unit. "ADB is prepared for the challenge" said Isabel Ortiz, ADB Senior Social Economist " Since the approved ADB's Social Protection Strategy, labor standards are an integral part of our development mission". "Government commitment to labor standards is essential, " said Carmela Torres, ILO's Deputy Director of the ILO Manila Office. As a result of the joint ADB and ILO work, and promotion of the ILO's Decent Work Agenda, government, employers and workers of the Philippines have committed to a Decent Work Action Plan.

From http://www.adb.org/ 09/20/2002

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CHINA: Mayors Fight Traffic Jam with High-Tech Systems

Several Chinese mayors said in Beijing on Tuesday that they plan to add more funds to the information technology sector to fight traffic problems in their cities. Yang Jun, vice-mayor of the coastal city Qingdao in Shandong Province, said his city is focusing its energy on the establishment of an intelligent transportation system to guarantee quick and safe traffic flow. "We have invested a lot in this regard and we will continue the effort," said Yang yesterday as he addressed more than 300 officials and experts at a mayor's forum on intelligent traffic systems jointly organized by the Ministry of Science and Technology and the Ministry of Communications. Peng Yuxing, vice-mayor of Leshan in Sichuan Province said the intelligent transportation system will be helpful in making his city an international tourism spot. Peng said the city has drawn up an intelligent transportation system blueprint with six sub-systems which include traffic information services, traffic control and management and an emergency management and rescue system. "Experts from across the world are welcomed to our city to offer suggestions in this endeavor," Peng said.

From http://www1.chinadaily.com.cn/cndy/ 09/12/2002

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Ruling on City's Public Affairs

The improvement of city appearance and sanitation management of Beijing is expected soon to be backed by legislation created by the standing committee of the Beijing Municipal People's Congress (BMPC). The move comes following feedback from local residents on the issue of draft regulation on the topics. Additionally, public consultation during the construction of Olympic Games venues has been listed as a priority. This will ensure high-level efficiency and integrity as part of a revision of the draft of Beijing's municipal regulation on public bidding and tender. The two revisions were debated yesterday at a regular conference of the BMPC's standing committee and will be put to the vote tomorrow following further revision. Graffitti vandals or illegal bill posting will be met by fines of between 100 yuan and 10,000 yuan (US$12-US$1,210), according to the revision, which has increased the original draft penalty. The draft cancelled a section covering the disconnection of mobile phones or pagers if the numbers are scrawled on buildings and other structures, given the communication rights prescribed by the Constitution, according to Zhang Zhijian, vice-director of the BMPC Commission of Legal System. Illegal bill posting and advertising, illegal private medical practice and the falsification of ID cards and public seals have become a headache for the capital in recent years. A specially-established team to clean off graffiti has removed millions of daubings since 1994 but the problem still continues. "Although the municipal government has increased its efforts to remove illegal advertising, short-term campaigns can not achieve success," said Dong Zhiwei, committeeman of BMPC. Dong believed mobile phone numbers scrawled across the city as part of illegal advertising campaigns should be suspended when fines do not work. The revision to the draft of the public bidding and tender was also discussed. The inspection, design, construction and purchasing of equipment for infrastructure projects, State-funded projects and those using loans or aid from international organizations and foreign governments are all required to undergo the public bidding process, the revision said. Therefore, construction projects for Olympic venues are included, said Zhu Rongguo, vice-director of the BMPC Commission of Legal System. The Beijing municipal government says the construction of Olympic venues will use a public bidding and tender system, ranging from choosing investors to the purchasing of equipment and material.

From http://www1.chinadaily.com.cn/ 09/05/2002

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China to Promote Computerized Governance

China plans to organize a big information technology exhibition in an ambitious drive to push forward governance by the use of computer in official organizations. At a news briefing Thursday, hosted jointly by the Chinese Academy of Sciences, the China Council for the Promotion of International Trade and the China Association for Science and Technology, organizers said the e-Government China 2002 Expo will be held from November 9 to 13 in Beijing. Comprising exhibitions, forums and other related activities, the scheduled expo will introduce the latest technology, new products and offer solutions to problems in e-infrastructure, and the application and security of the technology, organizers said. The exhibition is expected to cover new e-Government technology applications, e-Government information security and e-Government infrastructure. The forums are to discuss the outlook and strategies and application to China's development, targeting government officials, consultants and corporate delegates. The main activities include a special e-Government seminar, and e-Government high-level round-table meetings, they said. The organizers also said many well known IT businesses are enthusiastic about participating in the expo. Local government staff in Beijing and Shanghai have expressed their interest in the expo, which has an official website at www.egovchina.org. E-Government is a combination of technological and administrative innovation, the development of which will mean drastic reforms in government administration and will add to the prosperity of information technology and relevant industries in China, the experts said.

From Xinhua News Agency 09/09/2002

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Google Is Back in China But Don't Try Asking Any Difficult Questions

China's web censors have lifted their ban on access to the popular international Google search engine - but they have ways of making sure no one asks the wrong question. A search for Australian prime minister John Howard yesterday netted 200,000 internet pages; his Japanese counterpart Junichiro Koizumi scored 40,000. Yet when the magic name of Chinese president Jiang Zemin was entered, Google consistently replied that the information "is currently unavailable". The BBC's internet site is subject to similar restrictions. China's web servers allow access to the BBC homepage, but after that the going gets tough. A click on "BBC News" produces a blank and even the weather in England and Scotland is banned. However, in a bizarre exception to the rule, it was possible yesterday to get through to the BBC's Neighbours website. Chinese surfers had no difficulty in learning that Karl has lashed out at Drew, and that Penny is using the bridal fair to lure customers into the coffee shop. It appears that there may be some soap opera fans among the Chinese censors: EastEnders was available too, although access was more patchy. The ban on Google and on Altavista, another California-based search engine, was imposed by Beijing at the beginning of the month. Some observers believe that the aim is to prevent web-users from picking up sensitive items about Chinese politics ahead of a crucial Communist party congress in November. Another theory is that the security apparatus is trying to build a bigger empire for itself, regardless of the effect on China's image. The sophisticated technology needed suggests the existence of a powerful agency with a large budget at its disposal. "With 45 million users on line it is a big operation," says Duncan Clark, head of the Beijing-based BDA China Ltd technology consultancy. "They are using a rather sinister package now to filter out what they don't like." Obvious no-go areas include Falun Gong - the name of the banned spiritual sect - and the phrase "Chinese censorship" itself. Details of less well-known search engines which can circumvent the censors are now circulating on the internet grapevine; they include a site called dogpile.com and another one where the instructions are entirely in Finnish. Chinese web portals are only allowed to operate if they agree to avoid sensitive topics and do not carry news from foreign sources. Earlier this week the censors temporarily linked the Google web address to several Chinese search engines. The Chinese technology appears to be capable of learning as it goes. An initial search for "Tibet independence" yesterday on Google went through unchecked. When repeated a minute later it was blocked. (John Gittings)

From http://www.guardian.co.uk/ 09/14/2002

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Taiwan, China: Firms Toughen Internet-Use Policies

Employees who get caught surfing the Internet or sending personal e-mail at work may end up losing their jobs, according to a local survey yesterday. A survey of personnel managers found that 77 percent agreed that employees who take care of personal affairs at work -- including using the Internet -- should be disciplined. Among them, over 15 percent endorsed the idea of firing such employees, while only 14 percent of respondents saw the office trend as acceptable. The survey, conducted by 1111 Job Bank, an online job-search firm, received responses by e-mail from over 10,000 middle-ranking managers in local companies' human resource departments in mid-August. For those employees found violating the company's policies for using the Internet, 74 percent of respondents said that they would give verbal warnings to violators while 62 percent said violators' names would immediately be made public, the survey said. If the degree of violation escalates, 33 percent of company managers would file a discipline report in the employees' job performance record while 31 percent of them would give employees the sack. Another 14 percent said they would fine employees and take it out of their paychecks. The survey also found that 73 percent of companies have blocked employee access to cyber games in the workplace and over 64 percent of companies prohibited the use of online audio-video systems in offices. While 48 percent of respondents said that downloading private software is not allowed in their companies, 43 percent was barred from online chat rooms, 32 percent was prohibited from logging onto the Bulletin Board System and 20 percent was not allowed to send personal e-mails from their offices. "Most employers are taking a tough stance against Internet abuse. They believe they are entitled to restrict employees on the use of their properties -- computer and online access," Job Bank spokesman Wayne Shiah said yesterday. But some employees find the policies hard to accept. "Companies like that are too arbitrary and inhuman. They should have trust in their employees," said a 32-year-old female staffer surnamed Huang at Videoland Inc -- a local sports television station. Huang, however, agreed that all employees should make work their top priority, saying her job requires a lot of Internet use and sometimes personal affairs become mixed in with business. Shiah also said that young employees of the so-called e-generation usually disregard such rules, while senior workers may find them legitimate. Another 33-year-old female worker surnamed Chao at the Infineon Technology Co said that she has no difficulty following company restrictions on Internet use. It's reasonable for the company to shut down employees' access to pornographic Web sites or check their e-mail for trade secrets that may be leaked to competitors, she said. But Chao also said that the monitoring of her personal e-mails would be an infringement on her privacy. She also advocated strong disciplinary action against those that break the rules, saying she once supported a company decision to have fired an employee for circulating pornographic pictures via e-mail in the office. "Most female staff felt harassed," Chao said. KMT Legislator Apollo Chen, however, yesterday urged authorities to clarify the gray area between company management and protection of personal privacy. He said that companies should be entitled to check on employees' work performance, but personal privacy should not be invaded. Chuang Tyng-urey, an associate research fellow at the Academia Sinica's Institute of Information Science, said that employers should clarify restrictions about Internet use in work contracts so that employees would understand why their privacy was being infringed upon. (by Joyce Huang)

From http://www.taipeitimes.com/ 09/20/2002

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New Customs Inspection System Opens to Fight Smuggling

China Customs has ordered 40 sets of a new container and vehicle inspection system in order to equip all the ports along the southeastern coast of the country in a bid to fight smuggling more efficiently. At present more than half of the THSCAN systems are working at those ports and the rest will be up soon. "Before we introduced the system, it took inspectors at least two hours to finish inspecting one container. But now each container only takes about three minutes," said Zhang Jinguo, vice-director of the inspection division of the Tianjin Xingang Customs House. He added the system will become a deterrent for people trying to smuggle through the port. According to Zhang, about half the containers passing through his customs are now inspected by the system. "Our goal in the future is that a majority of the containers can be inspected by the system," Zhang said. At least two engineers have been assigned by the company to each system for long-term maintenance, to ensure the system runs soundly and to offer consultation to the inspectors, said Li Qingxiang, an engineer stationed at the Tianjin Customs House. Not only Chinese ports are benefiting from this system. The product has already been exported to Turkey, the Republic of Korea, Iran and the United Arab Emirates, according to an employee from the Beijing-based Nuctech Company Limited which makes the system. The employee only gave her family name as Wang. In May last year, the company signed a contract with an Australian customs house to export two systems, Wang said, adding the company is expecting to sign contracts for 20 THSCAN systems for export this year.

From People's Daily 09/23/2002

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Japan: Corporate Governance Re-Examined: S&P

Growing investor demand and more than a decade of economic stagnation are forcing Japanese companies to re-examine their traditional corporate governance practices, Standard & Poor's Corp. said in reports released Thursday. "Standard & Poor's sees signs of a gradual shift in the philosophy regarding corporate governance in Japan, and companies are embracing greater transparency and disclosure," said Hiroko Kiguchi, a member of S&P's governance unit who compiled the reports. Companies are increasingly moving toward more rigorous practices, the U.S. credit-rating agency said, pointing out that traditionally, boards have consisted solely of executive directors, and companies have been bound with cross-shareholding ties. Recent revisions to Japan's Commercial Code will promote further improvement in corporate governance practices, she added. But Japanese firms still have much discretion in their governance, given the lack of strict regulations or legal enforcement, Kiguchi said. "As a result, the implementation of effective corporate governance in Japan continues to depend primarily on the level of management's commitment," she said. The Japan Foreign Trade Council, a federation of the nation's trading firms, will work to ensure the industry obeys the law following a series of bribery and bid-rigging scandals at trading houses, the council said Thursday. At a news conference in Tokyo, Kenji Miyahara, chairman of the council and of Sumitomo Corp., said the trade council will set up a special committee to work on compliance issues and will draw up a model compliance program to assist efforts at member firms. The planned committee will include members from outside industry, including university professors and legal experts, and will study the kinds of measures taken by each member firm to ensure compliance, Miyahara said. (The committee will also draw up a model compliance program to assist efforts at member firms, he added.) Mitsui & Co. President Shinjiro Shimizu and Shigeji Ueshima, the firm's chairman and executive director, are set to resign Sept. 30 over allegations that Mitsui bribed a senior Mongolian government official to secure orders for a Japanese government-funded power project. The industry group also decided not to take any punitive steps against Mitsui & Co. for a spate of bid-rigging scandals. A company should take responsibility for a scandal on its own, Miyahara said, stressing that the council has no plans to consider punitive measures against Mitsui, such as an expulsion.

From http://www.japantimes.co.jp/ 09/13/2002

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Certification to Separate Quality MBAs from Bogus Degree Holders

Having a Masters in Business Administration (MBA) became fashionable in the corporate world from the early 1980s, and it now seems that every young executive has one. This is not surprising since there are 900 universities in the U.S. alone producing 112,000 MBA graduates every year and it is getting difficult to tell on paper who is more qualified. Fortunately, the International Certification Institute is coming to the rescue with an MBA certification test to award qualified applicants with recognition as recipients of a CMBA (Certified MBA). While it may be difficult to separate the cream of the crop with a single test, the certification will give a greater indication of how qualified an MBA graduate is for a specific job, market specialists said. Under ICI's plan, MBA holders will undergo a five-hour test with 300 questions covering finance, accounting, management and economics. The $450 test will begin next April. ``The success of the test will depend mainly on whether or not corporations will require a CMBA in job interviews,'' said an ICI official in an interview with a U.S. daily. Asked whether or not such requirements are likely, one Samsung official said it will depend on how well the tests are designed to identify specific qualifications. ``We already have an elaborate process through which we recruit qualified personnel. It is not just the degrees that we look at,'' said an official at Samsung's human resources division. U.S. experts were also quick to point out that the top 20 MBA schools are certain to oppose the implementation of such tests since it actually questions the quality of their education. ``We have very strict standards through which students are admitted and graduated,'' said Lewis Lataif, dean of the business school of Boston University. On the other hand, another professor pointed out that U.S. corporations spend as much as $8.5 billion recruiting MBA graduates and they have a right to demand objective certification. For the time being, the ICI is not considering making CMBA a requirement for MBA graduates in exercising their trade as is the case with accountants and lawyers. Statistics show that there are some 2.5 million Master's degree holders in the U.S., 25 percent of whom have MBAs and starting salaries are often close to six figures ($100,000) or higher. MBA degrees are similarly popular in Korea and thousands of college graduates head to the U.S. each year, hoping that their investment will guarantee a brighter and more financially secure future. (By Nho Joon-hun)

From http://search.hankooki.com/ 08/30/2002

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Firmer Self-Regulatory System Needed to Prevent Price Manipulation

Brokerage houses were found to have failed to take appropriate measures to prevent their employees from engaging in illegal stock transactions aimed at manipulating share prices. They have come under growing attack for their inaction to stamp out illegal activities by their workers since a Daewoo Securities employee allegedly bought 5 million shares of a Kosdaq-traded firm on Aug. 23 after infiltrating an online account of an asset management firm. Market experts are urging brokerage firms to establish a firmer self-regulatory system as part of efforts to avoid recurrence of such illegal acts by their own employees. They pointed out that most local securities companies are still not serious about the Daewoo case and other share price manipulation incidents, rekindling the moral hazard problem. The prosecutor's office is trying to confirm allegations that employees with other securities companies have been involved in the Daewoo case in an bid to manipulate stock prices of Delta Info-Comm. Investigators reportedly considered the possibility that some private moneylenders and other speculators were behind the case. ``Share price manipulators will not usually push up prices of targeted firms without collaboration with stock brokers,'' said an analyst. However, he said that managers of Daewoo and other brokerage firms have been and continue to be unwilling to take responsibility for stock manipulation and other illegal and unfair acts by their workers. Daewoo Securities announced a series of measures to prevent such illegal activities as the Delta case after its worker, only identified by his surname, Ahn, was detained on charges of stock price manipulation. But investors and market sources raise doubts that Daewoo would sincerely implement the measures in order to restore worsening confidence in its brokerage operation and protect investors. Only Daehan Investment Trust Securities Co. announced a self-regulatory manual right after the share price manipulation case involving Delta. The Financial Supervisory Service (FSS) urged securities firms to adopt a strengthened self-regulatory system, which calls for closer monitoring of large-scale transactions, rejection of receiving customer deposits from suspected manipulators and improvement in security measures for online trading. However, the FSS said many brokerage houses are unwilling to enforce harsher a self-regulatory system for fear of losing customers. (By Park Yoon-bae)

From http://search.hankooki.com/ 09/01/2002

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Employers Prioritize English Proficiency

Proficiency in English has become more import than ever as more than half of local companies prefer to recruit job seekers having a strong command of the second language. According to the latest survey by Recruit, an online job search firm, of 104 big firms, 50 percent or 52 firms said they provide additional marks to job seekers with remarkable language abilities in employment. The survey also found about 29.8 percent or 31 firms use language skills as a reference in employment. Only 18.3 percent or 19 firms take no account of the language ability of job applicants when hiring new staff, it said. Language ability generally implies English ability, and TOFEL and TOEIC tests are commonly used as reference in employment, Recruit added. The retail, food and finance-insurance businesses used English skills as an important criteria in selection, it said. ``We differentiate the English proficiency from other abilities because we think language skill is essential in this globalization era,'' a local retail company said. Contrary to the dominant trend favoring English ability in selecting applicants, industries such as the food services firms and pharmaceuticals give no extra weight to aptitude in a second language. ``In our industry, a service oriented mind-set is more important than language skills,'' according to a T.G.I. Friday's. The need for employees with English ability is increasing in the professional fields such as marketing and accounting. Another Recruit's survey of 114 leading Korean companies conducted last month found about 50 percent or 58 firms said they plan to employ Master and Ph.D. degree holders this year. Among them, 55.2 percent preferred overseas degrees to domestic ones. Many companies planning to hire overseas degree holders include POSCO, Samsung Everland, Dongbu Steel, Dongwon FMB, Cheiljedang, Samsung Electro-Mechanics and Samsung SDI. (by Seo Jee-yeon)

From http://search.hankooki.com/ 09/03/2002

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Consolidated Tax System to Be Introduced

The government plans to introduce in 2004 a "consolidated tax payment system" for the corporate sector. Under the system, corporate income tax is levied on the combined taxable income of the parent firm and its subsidiaries. A high-ranking official at the Ministry of Finance and Economy (MOFE) said Wednesday that the ministry is set to introduce the new system, as the business sector has been demanding a consolidated tax system for a long time. The official, however, said that despite that the new tax system is expected to help businesses enhance their transparency in management, it could cut back the government's corporate tax revenue, as companies could to circumvent the new rule to pay less tax. (by Park Young-chul)

From http://srch.chosun.com/ 09/04/2002

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Loyalty Management Essential in Modern Marketing: Bain & Co.

It is no secret that loyal customers are your best customers, but it so happens that they are more important than one would normally think. One international consulting company has realized that they are actually a firm's bread and butter. According to Sunny Yi, president of Bain & Co. Korea, a 10-year research study has revealed that loyal customers account for as much as 70-80 percent of profits. "Our research of over 30 industries has shown that loyal customers, who usually only represent about 15-20 percent of clientele, generate most of the profits,'' said Yi. The interesting aspect of loyal customers is that while it would appear that they are more of a cost to maintain, it is the attraction of new customers that actually runs up the bills. "Where opportunity costs are concerned, securing new customers costs five to 10 times more than maintaining regular customers,'' said Yi, who became head of the Korean operation of Bain & Co. last month. There is more. The research found that most of the costs of after sales service are attributed to new customers, many of whom do not return after receiving the services. "In home shopping, for instance, there are heavy costs involved in product returns and most of them are incurred by first-time customers,'' said the Harvard MBA (Masters in Business Administration). As to methods of loyalty management, Yi said marketing personnel need to realize that not all regular customers are VIPs (very important persons) as they are usually regarded. "A valuable customer at a bank would be a person who deposits large amounts of money and visits perhaps a couple of times a year. While that customer is certainly important, there are others who frequently visit the bank to make various transactions on which commissions are made. They are just as important and perhaps an even bigger source of income,'' he explained. Another critical aspect of loyalty management is that companies that have loyal employees are also the ones with the most loyal customers, thus making human resource management just as important. "There are many cases when employees are rewarded for attracting new customers, but companies need to provide incentives for those who are able to maintain the largest number of loyal customers,'' Yi said. (by Nho Joon-hun)

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

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2 Daewoo Firms to Graduate From Workout Plan

Daewoo International Corp. and Daewoo Engineering & Construction are expected to graduate from the government's workout scheme and return to normalization early next year, the firms' creditor group said yesterday. The workout scheme consists of a corporate management normalization program initiated by the government. ``As the two ailing companies have continued to improve their business performance and financial structure, we plan to hold a creditors' meeting next month to decide whether to allow self-management of funds,'' said an official at Woori Bank, the main creditor bank of the two Daewoo subsidiaries. ``If they continue to show great performance down the road, creditors will push for a plan to get them out of the workout scheme early next year,'' he said. The self-management system gives firms under the workout program partial right to manage funds for themselves. The official said that the self-management of funds will help improve the international creditworthiness of the two affiliates, though it would still be difficult for them to take out fresh loans due to an agreement they signed upon entering the workout scheme. Daewoo International swung into the black in the first half of this year, reaping a net profit of 20.2 billion won, owing mainly to an expansion in exports triggered by economic recovery. Daewoo Engineering and Construction, the nation's third-largest contractor, also boosted its net profit by 55 percent from a year earlier during the January-June period, fueled by a surge in demand for apartments and construction orders.

From http://search.hankooki.com/ 09/11/2002

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KOTEC Head Calls for Risk Management System

The head of the Korea Technology Credit Guarantee Fund (KOTEC) yesterday stressed the need for credit guarantee institutions to firmly establish a risk management system. ``We credit guarantee institutions need to prepare a risk management system or build a secondary market in order to gain a competitive edge and to be born again as a reliable total service institution,'' KOTEC president Park Bong-soo said. He made the remarks during a speech at a five-day conference of the Asian Credit Supplementation Institution Confederation (ACSIC), which opened on Sunday in Taipei. ``Systematic monitoring as well as credit analysis must be intensified so that a direct and total service can be rendered for continued growth of client companies,'' he told the conference. Heads of 13 credit guarantee institutions from 10 Asian countries are participating in the international conference, which will run through Thursday. Park said the technology credit guarantee system is designed to offer financial assistance to small and medium firms that have difficulty accessing financing resources under the old banking system. He added that the system is also aimed at enhancing the technological innovations of small and medium enterprises. He noted that KOTEC played a leading role in overcoming the 1997-98 Asian financial crisis by alleviating the credit crunch of small and medium businesses and venture startups equipped with high technology. Park said the credit guarantee system has contributed to enhancing stability of financial institutions by helping them reduce the ratio of risky assets, recover the function of credit-based loans and improve the stability of loan extension. He emphasized that it is needed to develop or improve a corporate evaluation system. ``As the value of intangible assets like know-how increases and the social and economic environment changes rapidly, we should be equipped with an evaluation system that could correspond to the changes,'' Park said.

From http://search.hankooki.com/ 09/17/2002

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E-Learning Remains Big Question in Indonesia

Flexibility is what should come to mind when people hear of e-learning. E-learning corresponds to the notion of easy access training, hi-tech, multimedia, easily managed training, etc. So, is Indonesia ready? What does e-learning mean in this country? What is the probability of success if e-learning is to be implemented widely in Indonesia? Let's first see how Indonesians learn and interact with each other. Ever notice that Indonesians prefer talking over writing, prefer attending training conducted by instructors over self-study? We can probably assume that, as a part of the culture, the majority of Indonesians prefer to communicate or interact directly with other parties than to communicate in, say, a virtual way. E-learning on the contrary, uses a virtual method, and provides very limited interaction with other parties. E-learning platforms though, make us able to use the full blast of multimedia technology, still there is very limited direct communication with other people. There will be video of experts leading the trainees through voice facilitation. But they are not considered actual humans, they are just recorded images and sound. Other than the human connection and/or interaction, e-learning demands good discipline. This means that the trainees should be able to sit throughout the course to be able to learn something without anyone supervising, which of course is still uncommon in Indonesia. In addition, here in Indonesia, I met lots of people who still consider training as an escape vehicle of relaxation or vacation. To learn something or to gain new skills is far less of a priority. Therefore, would it be possible to implement e-learning in Indonesia with the limitations expressed above? I am still positive about this, actually, but how? I am suggesting that we see e-learning not as e-learning by itself, but as a tool used by an organization to arm its people to stay up to date and to be competitive, in a flexible and mature way. One of the possible ways is to change the learning paradigm, possibly by incorporating e-learning as one of the levers of a new corporate culture. But it is well known that changing corporate culture will take time, therefore, a communication plan might need to be developed to "advertise" e-learning usage and later to increase the appetite of using e-learning in the corporation. Having said this, still, the plan to introduce new culture with the emphasis on working efficiently and smartly using cost-effective and flexible tools, which, in this case is using e-learning, needs to be developed and implemented. Changing the way people think and feel about attending training and what to gain from training is more about mental attitudes and general maturity. Therefore, changing the traditional learning to e-learning needs to be part of culture change. Other important things, among others, are the readiness of training infrastructures, so that the trainees will feel obliged to finish the training and to gain something out of it. A simple example is incorporating the courses with performance management tools, or in a more traditional way is actively engage supervisors to monitor their sub-ordinates performance. Corporations should also find another way to reward employees with the "vacation" type of reward, in addition to the annual vacation. Now the question is: will companies be ready to take this initiative? (by Eridani Sudiono)

From http://www.thejakartapost.com/ 09/07/2002

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Indonesia: Free Competition in Power Sector Will Begin in Batam

The government will begin liberalizing the country's power sector in 2007, with Batam, Java and Bali expected to be the first areas to introduce free-market competition." We hope (the liberalization) will start in 2007 at the latest," Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday. Purnomo said the government would tread carefully in liberalizing the power sector, and would only open up the market in those areas ready for the competition. The government believes the industrial island of Batam will be ready to implement free-market competition in five years time, pointing to the fact that power prices in Batam are already higher than in other areas of the country. "Java and Bali will also probably be ready to implement the free competition," Purnomo was quoted by Antara as saying. In less developed areas of the country, the government will continue providing subsidies for power consumers, determining power prices until the areas are developed enough for open competition. The House of Representatives passed a new power bill into law last week, after more than one and a half years of deliberation. Under the new law, expected to be approved by President Megawati Soekarnoputri later this month, the government will strip state electricity company PT PLN of its four decade-long monopoly of the power sector. The new law will allow private companies to produce power and sell it to the public. Under the current system, only PLN is authorized to sell power to the public. Private companies are allowed to produce power, but they are only able to use the power themselves or sell it to PLN. At least one year after the new law takes effect, the government is required to set up a special agency -- called the Power Market Supervisory Body -- to supervise the competition in the power sector. And five years after the new law takes effect, the government is required to have selected one area for the implementation of free-market competition. The law says that while the power generation and power marketing sectors will be opened for competition, the government will continue to control the power transmission and distribution network. However, any company will be free to use the network for a fee. The minister said the transmission and distribution network would be operated by a state company. A number of different parties campaigned against the law, saying open competition would result in a sharp increase in power prices, which has occurred in many countries. But Purnomo said the competition would encourage more investment in the power sector, and power producers would vie to provide the best service to customers. And investors, he added, will be attracted to those regions with abundant supplies of power. There have been numerous blackouts around the country over the past two years, and there are worries that the situation will worsen in the coming years unless the government is able to attract more investment in the power sector. The government has said power demand on the islands of Java and Bali alone could exceed the supply by 2003, when the peak load is expected to hit 15,441 MW compared with an installed capacity of 15,285 MW. Indonesia needs about US$28.45 billion in new investment over the next 10 years to build new power plants and a power network to stave off a power crisis in Java, Bali and other parts of the country, according to the government.

From http://www.thejakartapost.com/ 09/13/2002

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Laos: Communities to Manage the Environment

A workshop on environmental protection planning with an emphasis on community participation was held by the Ministry of Communication, Transport, Post and Construction in cooperation with the Danish Organisation (DANIDA) in Vientiane municipality on September 10.Attending the event were trainees from the Urban Development Service Department, the Urban Planning Institute and the Vientiane CTPC. The workshop aimed to upgrade the knowledge and capacity of locals to analyse their community situation in order to boost participation in environmental management. The Deputy Mayor Mr. Bounchanh Sinthavong spoke at the opening of the workshop calling it "an important task for socio-economic development to make Vientiane municipality a clean place."

From http://www.kplnet.net/ 09/12/2002

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Malaysia: UN Official: Judges Need Human Rights Education

Judges and magistrates should be given human rights education so that they will be more concerned about human rights when making decisions in their line of duty. United Nations Special Rapporteur for Independent Judges and Lawyers Datuk Param Cumaraswamy said human rights education was important for judges nowadays as they needed the knowledge in many cases. In this situation, judges should not be shy to learn again because that could be considered as part of their learning process even though they had been in senior positions, he said. "Many developed countries have sent their judges or magistrates to human rights seminars or courses to learn more about human rights. "There is no reason why Malaysia should not do the same," he said yesterday at the national consultation on the Human Rights Commission of Malaysia (Suhakam) after it was established two years ago. The consultation is themed How Has The Commission Played A Role In Promoting And Protecting Human Rights In Malaysia. He said Malaysia should emulate the move by developed nations as it was nearing a developed country status, adding that it would help Malaysia to be in a better position. "Judges in Malaysia need more knowledge on human rights. Judges and magistrates will meet more and more crime cases. This human rights knowledge will help them. They need a lot of exposure for a fair trial," he said. Suhakam Commissioner Prof Chiam Heng Keng said Malaysia had already tried to expose judges and magistrates to human rights education but it was still in the early stages. "However, what I can say is that a lot more needs to be done to educate our judges or magistrates on human rights," she said. Regional Representative for Asia-Pacific UN High Commissioner for Human Rights, Nicholas Howen, said any human rights body of a country should be independent from their government to enable them to perform their duties freely, without fear or favour.

From http://thestar.com.my/ 09/08/2002

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Singapore: Study Shows Glcs Have Done Better Than Non-Glcs

LISTED government-linked companies have on average outperformed, or at least equalled, other companies in terms of profitability, efficiency and financial returns from 1990 to 2000, according to a study by two university professors. 'This implies that GLCs are more profitable and efficient than non-GLCs in generating profits from their assets and shareholder equity.' - Professors David Ding and James Ang, who found that the cumulative annual return for GLCs was 113 per cent over the 11-year period, against non-GLCs' 111 per cent

From http://business-times.asia1.com.sg/ 09/04/2002

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Gov't Role in Business Takes New Twist

SINGAPORE: Debate over whether the Singapore Government should continue to play a significant role in business took a new twist yesterday with a study showing that state-linked companies are doing better than those in the private sector. In relation to the study, listed government-linked companies (GLCs) "have on average outperformed, or at least equalled, other companies in terms of profitability, efficiency and financial returns," the Business Times said. But GLCs have a lower sales-to-asset ratio than non-GLCs and can improve in their deployment of assets to generate sales revenue, according to the study by university professors in the United States and Singapore. A company is referred to as a GLC when the government holds at least a 20 per cent stake. Some of Singapore's best known listed GLCs include Singapore Airlines, Singapore Telecommunications and the DBS Bank. The issue of GLCs has been under intense scrutiny in recent months with critics claiming they have passed their use-by date and stifle the entrepreneurship the government is calling for. The government has agreed to gradually reduce its shareholdings but defends its right to play a role in strategic areas. "The GLCs are important players in the Singapore economy," Deputy Prime Minister Lee Hsien Loong told parliament last week. The divestment "must be at the right time, at a fair price," he said. "We will restructure the GLCs, we will sell off pieces which do not fit." In the study, Associate Professor David Ding, from the business school at Singapore's Nanyang Technological University, and Professor James Ang, from the Florida State University, focused on 25 GLCs and 204 non-GLCs listed on the Singapore Exchange's main board. From 1990 to 2000, the GLCs outperformed by 1.7 per cent on return on assets and by 10.1 per cent on return on equity. The cumulative annual return for GLCs was 113 per cent over the 11-year period, against 111 per cent for non-GLCs. "This implies that GLCs are more profitable and efficient than non-GLCs in generating profits from their assets and shareholder equity," the authors said. Meanwhile, the GFCs maintained a higher cash-to-assets ratio of 16.4 per cent, while non-GLCs were at 13.7 per cent. While the GLCs higher cash hoard may support the notion that they are not financially dependent on the government, the higher cash also contributed to their lower sales-to-assets ratio, the report said. GLCs were also found to have a lower expense-to-assets ratio of 50 per cent, compared to 70 per cent for non-GLCs. As at the end of 2000, GLCs accounted for about 34 per cent of the local stock market's capitalization and controlled about a 10th of Singapore's economic output.

From http://www1.chinadaily.com.cn/ 09/05/2002

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Income May Launch Online Risk Exchange

HOMEGROWN insurance giant NTUC Income is planning to launch an online risk exchange which would allow insurers and reinsurers in the region to manage risk cheaply and more efficiently. Singapore's largest car insurer plans to rope in regional participants to offer an Internet-based system on which both traditional and more exotic types of risk, such as that of terrorism, could be traded. Reinsurance involves risk-sharing among insurance firms in return for a fee. NTUC Income chief executive officer (CEO) Tan Kin Lian said that the Web-based platform would complement a bricks-and-mortar exchange recommended by the Economic Review Committee (ERC). Last week, the financial services working group of the ERC's Sub-committee on Services Industries proposed the establishment of the Asia Risk Exchange to manage catastrophic sudden-event risk. Mr. Tan said industry players could meet at such an exchange to establish business relations, but that an online platform would assist subsequent transactions. The cost of joining the platform will be 'modest', in a bid to attract participants away from traditional business transactions by telephone and fax, and also from more costly online exchanges around the world. NTUC Income is targeting a soft launch by mid-November when a demonstration version is expected to be ready for potential participants to try out. 'I want to make this exchange almost as easy to learn as e-mail,' said Mr. Tan. The exchange, if successful, will be sold to counter charges of conflict of interest, since NTUC Income would be both the operator and a participant, he added. The local subsidiary of a British-based company, ri3k Asia, set up an online risk exchange for reinsurers here in September 2001 focusing mainly on non-life risk. Said its CEO, Mr. Duncan Ironside: 'In the same way that...major reinsurers have been developing their own electronic Internet channels to their customers, I would have expected NTUC Income to be doing the same.' (by Hugh Chow)

From http://straitstimes.asia1.com.sg/ 09/23/2002

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Thailand: Students Slam New Style

Students have given the thumbs down to the Education Ministry's new child-centred learning approach being tested in schools. The new learning style is aimed at making students more enthusiastic, but students unhappy with the switch said many schools lacked preparation. They want the ministry to fix the problem before child-centred learning is introduced to all schools under the ministry next year. Almost 2,200 schools joined the ministry's pilot project on the curriculum. The guidelines are loose, which gives teachers more freedom to design courses. Students at Bodindecha 2, a testing ground in Bangkok, felt unhappy after trying the curriculum in the first semester which ended on Friday. Teachers emphasised assignments over teaching duties, and some students were worried they would be left behind, and were now attending tuition schools. ``I felt depressed and had to study harder,'' said Polawat Rojawattanawong, a Mathayom 4 student at Bodindecha 2. ``Honestly, I thought I hardly learnt anything new.'' Reports sent to teachers were not returned and many subjects were beyond students' understanding, he said. ``If the curriculum does not improve, and students and teachers do not pay attention to classroom discussions, we would like to go back to the old way of studying.'' Class interaction is a key principle of the child-centred format. Polawat's father, Sornsak, noticed the difference in his son. He said Polawat was under stress, with too many activities and reports expected from him. The ministry should evaluate the project and correct the problems urgently, he said. Suthicha Meeyai, another Mathayom 4 student at the school, said teachers failed to map out course work, which forced students to get help from tutors after class. Teachers left students to their own devices _ ``self-learning'' _ rather than giving them guidance, said a friend, Timporn Damrongsilp. Cherdchai Palaniwat, director of Rajvinit Bangkeo, another school under the project, said overcrowded classrooms were a problem. Some teachers found it tough finding course material which would encourage students to think and talk. The new approach was adopted at Rajvinit Bangkeo in May. Some parents, unhappy about progress, have withdrawn their children and enrolled them at schools still using the conventional approach. Areerat Wattanasin, deputy director-general of the Curriculum and Instruction Development Department, asked for patience from students, saying they and their teachers were still adjusting to the new learning environment. She promised students less stress once everything had settled down. The department was working closely with all schools to design appropriate courses and activities so students would not be overloaded. The department is training 600,000 teachers in the new curriculum, trying to ease their worries and assessing its impact on the learning quality. Ms Areerat said understaffed schools which were not ready for the change would not be forced into the new curriculum next year, but would be given longer to prepare. (by Sirikul Bunnag)

From http://www.bangkokpost.com/ 09/23/2002

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Party Looks Online to Deliver Message

HA NOI - The future of the Vietnamese publishing industry lies online, one senior Party official has predicted. "The Internet, especially newspaper websites, has had a major impact and proven to be one of the most effective means for disseminating Party guidelines and Government policies," said Nguyen Khoa Diem, Politburo member and secretary of the Communist Party of Viet Nam Central Committee. Diem also described online publishing as an excellent way to convey news and information from the country to more than two million overseas Vietnamese, and Vietnamese citizens who reside and work abroad, as well as foreign friends to help them better understand Viet Nam. "However, Internet and online media development remains slower than in other regional countries and has not yet met the demand for national development and the needs of the people in the country," he said. "Viet Nam's newspaper sites are not very informative and are not very attractive to readers, while Internet costs remain high, even though they have fallen recently. "The high-ranking Party official also pointed the finger at administrators, noting that "the management of electronic newspapers and the Internet has proved less effective, especially in the domain of properly controlling public Internet services. "He also called for greater efforts to complete the legal framework for online publishing, to help the sector develop as quickly as possible. Diem made the statement at a conference on online publishing held in Ha Noi on Wednesday. Internet services have expanded to all 61 provinces and cities of the country, and there are now 250,000 subscribers. Viet Nam now has 21 electronic newspapers and magazines, and two online publishing houses, which together receive millions of hits per day.

From http://vietnamnews.vnagency.com.vn/ 09/20/2002

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Viet Nam: President Praises Farmers' Poverty Reduction Efforts

HA NOI - President Tran Duc Luong has called on the farmers across the nation to follow the 250 succesful farmers who have ploughed ahead with agricultural innovations. Meeting the farming pioneers on Thursday, the President praised them for lifting themselves out of poverty and contributing to the country's broader renovation process. Nine of the farmers had also been awarded the Labour Hero title at the ongoing second national workshop to review the campaign that has encouraged farmers to boost their agricultural and economic competitiveness. Luong commended all of the nation's farmers for their attempts to restructure their agricultural operations and their readiness to help each other improve their standard of living. "From a country that had to import food in the past, Viet Nam has now become a big exporter of agricultural and forestry products," Luong told the model farmers. The President placed great faith in the movement to commodity cropping, which will drive the country's export sector and narrow the poverty gap by generating more jobs and higher incomes in rural areas. Luong pointed to the importance of grassroots democracy in the nation's rural areas. He also expressed his support for the Viet Nam Farmers Association's work with relevant authorities and mafss organisations. The head of the association, Nguyen Duc Trieu, thanked the Party, State and President Luong for their support.

From http://vietnamnews.vnagency.com.vn/ 09/20/2002

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National I-Card for Some States

NEW DELHI: The Union government has decided to implement a ''pilot project'' for introducing a new multi-purpose national identity card. Home secretary Kamal Pande, who made the announcement here on Friday, said 13 states and UTs had been chosen for the purpose. These are Delhi, Pondicherry, Jammu and Kashmir, Gujarat, Uttaranchal, Rajasthan, UP, Assam, Andhra Pradesh, West Bengal, Tripura, Tamil Nadu and Goa. The project will be implemented in certain blocks, sub-districts in these states. The idea of doing so in only selected areas is to evaluate the process and remove any shortcomings before launching it on a full scale.

From http://timesofindia.indiatimes.com/ 09/08/2002

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High-End Technology to Make India a Knowledge Hub-- Nasscom

Software industry should now focus on transforming the country into a knowledge hub from just an "IT services nation", by entering into high-end areas like consulting, design and gene modelling, Nasscom president Kiran Karnik said. "It's time India should move up the value chain by entering into fields like consulting from customs application development and into other areas like design and from data base to gene modelling which would help the country in becoming a knowledge hub", Karnik said at a seminar on knowledge and innovation. He said there were two challenges towards this - lack of knowledge management and absence of support structure like incubation and infrastructure. "Absence of these two factors are resulting in limited demand for innovation which is key to fight competition", Karnik said adding that unless competition set in the minds of the people, the urge to excel would be absent. Stating that it is competition, which pushed the Indian software industry into action, Karnik, however, lamented that unfortunately it was not the same case with hardware. "High amount of tariffs protected the hardware industry and in the process it failed to react up to competition with virtually no innovation", he said. Bibek Debroy, director, Rajiv Gandhi Foundation, said competition alone could bring the strengths and weaknesses of the Indian industry whereby its not just software, every other sector could contribute to making India a knowledge hub. "The challenge now is to ensure the fruits of this IT revolution percolates to the lowest starta of the society which comprise 80 per cent of the population", Debroy said. Elaborating on the competition, he said government should be kept out of all the businesses if monoply structure were to be dismantled. "There are two ways to reach some stage of becoming a knowledge hub, creation of jobs and eradication of illiteracy, and at both these spheres, it is the private sector which should take the initiative", he said.Earlier Karnik said the current public-private partnerships are in bits and pieces which needed to be more organised.

From http://www.hindustantimes.com/ 09/10/2002

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Pak's First Health Information Management System Set Up

RAWALPINDI (PNS): Pakistan's first Model District Health Information Management System has been set up at Rawalpindi Executive District Office Health Khayaban-e-Sir Syed. The venture has been made possible with the assistance of the World Health organization (WHO). The system would be linked to the Internet so that all the information related to different diseases, their spread and combat could be made available on the Internet. Representative of the WHO Dr. Caliif Bille presented four computers to the District Nazim Rawalpindi Raja Tariq Kiani in this context while inaugurating the center. Giving the details, Dr. Bille said that Rawalpindi is the first district of Pakistan to set up a Model District Health Information Management System. This, he added, has been done in the wake of the excellent performance of the District Government and the Department of Health here. Abbottabad and Sahiwal are the other areas, which shall have such a system. Speaking at the inauguration ceremony, Raja Tariq Kiani revealed that the district government had nominated around 103 doctors to work in different health centers in a year. 14 lady doctors have also been hired to work in Tehsil Headquarters Hospitals on contract basis, he added.

From http://www.paknews.com/ 09/16/2002

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Workshop on Economic and Fiscal Policies in Astana

In Astana on 17 September a workshop with the subject "Analysis of economic and fiscal policies in RK" will take place. The workshop is organised by the senate committee on economics, finance and budget, KZ-today was advised in PR department of the senate of parliament of RK. The target of the workshop is review and discussion of the results of Kazakhstani economy development and occurring in this respect fiscal policy directions. It is expected that the workshop will assist the legislators in the review of economic fiscal effects of the policies.

From http://www.gazeta.kz/ 09/16/2002

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Uzbek Constitutional Court Discusses Improvement of Work

Constitutional Court of Uzbekistan held a session to discuss improvement of its work, UzA reported. Chairman of the Constitutional Court, Boritosh Mustafoev, noted that priority in the process of reforming judicial-legal sphere should be given to ensuring independence of judicial-legal bodies. Mustafoev especially noted the need for strengthening Constitutional supervision, work with citizens' applications and other measures. Boritosh Mustafoev was appointed chairman of the Constitutional Court at the ninth session of Oliy Majlis held on 29-30 August.

From http://81.29.68.227/ 09/18/2002

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Australia: States Go It Alone on Insurance

FEDERAL and state governments last night appeared to be split over reforms to public liability insurance as NSW and Victoria introduced their own changes on the day the federal Government's long-awaited proposals were released. As the federal-sponsored review of negligence law published its first report, Victoria introduced a slate of reforms to damages claims, while NSW announced plans to press ahead with a second wave of public liability reforms today. Critics said the moves by NSW and Victoria appeared to be at odds with commitments given by the states in May to perform a review of national negligence proposals. Australian Law Council president Tony Abbott said the states were unlikely to agree to further amendments after pushing through their own reforms. "It is hard to see how they (NSW and Victoria) can expect the rest of Australia to be consistent with them when they have gone ahead without reference to the report on the national approach that they agreed, with other states, to set up," he said. But a spokesman for Assistant Treasurer Helen Coonan said the state reforms addressed different issues to those raised in the federal review, conducted by a panel headed by NSW appeal judge David Ipp. "It is open to them (the states) to continue to introduce reforms in light of this report," the spokesman said. Governments have been forced into action after insurers withdrew from the public liability insurance market or priced policies beyond the reach of community and sporting groups because of the rising number of claims. The Ipp report recommends sweeping reforms to negligence law in Australia that are designed to force individuals to take a greater share of the responsibility for their injuries. The report calls for a national system backed by a single piece of law enacted by state and federal governments. It recommends:? Claims be notified within three years, not seven; ? Court experts adjudicate on injuries, rather than competing experts employed by plaintiffs and defendants; ? Negligence claims be barred where a doctor's treatment is in accordance with widely held medical opinion; and Greater force be given to waivers signed by participants in risky sports. Senator Coonan said the Ipp report was aimed at stopping the "culture of blame" and forcing individuals to take responsibility for their actions. "This is not about attacking consumers or reducing consumers' rights; it's very much about getting the system that's almost about to collapse under its own weight back into balance," she said. Insurance Council of Australia executive Alan Mason said the Ipp report was "a victory for common sense". NSW Premier Bob Carr outlined plans for a second wave of liability law reforms that he said went further than the commonwealth proposals. The NSW Personal Responsibility Bill follows moves earlier this year to cap the size of court damages awards and reduce the number of claims. Mr Carr said the commonwealth proposal was "of a great deal of interest". "It is a way of having national uniformity in reform of negligence law and we are carefully going through it," he said. Victorian Premier Steve Bracks announced plans to cap damages payouts at $360,000 and limit awards for loss of income to no more three times the average weekly wage. "It will be a new cap for payouts in Victoria and I believe a very important message to send to the community, to send to the insurance industry and to send to others, that excessive payments over and above that are not acceptable," he said (by Andrew White et al.).

From http://www.theaustralian.news.com.au/ 09/03/2002

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Housing System in Shambles

MELBOURNE'S architects are turning down work and encouraging potential clients to buy finished houses rather than build or renovate, because of Victoria's "dysfunctional" planning system. Prominent Melbourne architect Kerstin Thompson and 100 colleagues have written to Victorian Planning Minister Mary Delahunty complaining that delays in obtaining some approvals have doubled since the Government introduced the ResCode in August last year to streamline the long residential planning process. The approvals process for small to medium-sized residential projects was in "meltdown mode" they wrote and waits of up to 18 months were not unusual. Ms Thompson said she and some of her colleagues encouraged people to buy an already renovated house to avoid contending with the system. She said: "I will quite often say to clients, 'If you can buy a house that's already been renovated, do it. Who wants to wait around with all the uncertainty." Ms Thompson said very small-scale applications should be dealt with over the counter. And approval for larger projects needed to be expedited to save money and time. Ms Thompson and her colleagues have advised Ms Delahunty that "architectural practice in small to medium-scale work has now become an impossible task because of the endless delays in getting council approval even for the simplest of projects". Ms Delahunty said she recognised there were concerns about the system but it was in good condition. "The Victorian building industry has had a record year generating $13.1 billion in activity in the last financial year," she said. "The record levels of activity were particularly driven by the residential building sector indicating a high level of confidence." Meanwhile yesterday, the NSW Government announced an overhaul of its planning processes, aiming to cut red tape by 95 per cent. NSW Planning Minister Andrew Refshauge launched PlanFirst, which will be rolled out in 16 areas of NSW over the next two years. It is designed to better manage growth in NSW and save business more than $360 million a year. "Our planning system is currently a complicated web of more than 5000 planning documents," Mr Refshauge said. "These reforms will cut that figure to less than 200, delivering a 95 per cent reduction in red tape and savings of hundreds of millions of dollars." A spokesman for Dr Refshauge said PlanFirst was significantly different from the Victorian policy because it dealt with development and planning issues for regions rather than individual properties (By Amanda Keenan and Monica Videnieks).

From http://www.theaustralian.news.com.au/ 09/17/2002

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Fiji Among Seven Equator Prize Winners at World Summit

JOHANNESBURG (PINA Nius Online) - A Fiji project to sustain local marine resources is among seven winners of the prestigious Equator Prize at the World Summit on Sustainable Development in Johannesburg. The US$30,000 prizes are given in recognition of outstanding community efforts to reduce poverty and encourage biodiversity conservation in 77 Equator Belt countries. Fiji's winning entry was the Fiji Localy-Managed Marine Area Network. The program was established in 1999, and covers 10 percent of the inshore marine areas of Fiji. The project has led to an increase in the number and sizes of clams, crabs and other species harvested adjacent to areas where fishing is prohibited. Much of the project's success, its backers say, can be attributed to its participatory focus with local people at the center of the network's operations.

From http://www.pacificislands.cc/ 09/02/2002

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New Zealand: Government Sets Up Special Spin Team to Get Good News Out

The Government has set up a five-person communication unit to spin good news messages to provincial and community media and co-ordinate major announcements. Already dubbed "the Burns unit" by Beehive sceptics, it will be led by former Marlborough Express editor Brendon Burns, who stood unsuccessfully for Labour in the Kaikoura seat. It will operate from offices on the Beehive's fifth floor and report directly to Prime Minister Helen Clark and her chief press secretary, Mike Munro. The only other staff member appointed so far is Josie Harbutt, who was former Corrections Minister Matt Robson's press secretary. Mr Burns said the plan was to "deepen and broaden" the Government's message. He did not expect it to have much interaction with the parliamentary press gallery, where the major newspapers, radio and television networks base their political reporters. One senior press secretary said the concept was set up to "get in under the big city media's radar" with issues and positive local content that would otherwise not be covered. "The gallery has got away from informational reporting. It's very hard to get a fact out there." Another secretary said it was designed to filter out a lot of the negative coverage and analysis that the press gallery provided, and communicate "beyond the beltway with a little less of the middle person in it". It would also provide media advice to junior ministers in Helen Clark's expanded Executive. Sources said the unit was spawned by Labour's sharp loss of support, down from more than 50 per cent at the start of the election campaign to just over 41 per cent on election night. Ministers have blamed the media's "oppositional" role during the campaign and their own failure to communicate details of what they saw as a successful term in office. That made it difficult to counter New Zealand First's simple campaign on crime, the treaty and immigration and fight the sudden rise of United Future. But the unit has drawn criticism within the Beehive, where some see it as a way for Helen Clark to exert more centralised control or as a way of compensating Mr Burns for giving up his job to stand in Kaikoura. Mr Burns, who plans to commute once a week from Marlborough, would not disclose yesterday how much he was being paid. Helen Clark said yesterday that the unit would be financed from within the existing Ministerial Services' budget. (by Vernon Small)

From http://www.nzherald.co.nz/ 09/10/2002

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A Year Later, Central Asian Economies Have Not Changed Course

The September 11 terrorist attacks thrust Central Asian states into the spotlight. As Americans and their allies scrambled to establish military outposts in the region in autumn 2001, some economists expressed hope that Uzbekistan, Kyrgyzstan and others would parley the attention into broader trade and sounder economies. That has not happened. American leaders have not forcefully tied their aid to economic progress, and Central Asian republics have not clearly applied revenue from aid or from foreign visitors toward projects that stimulate foreign investment or improve national living standards. Kazakhstan and Azerbaijan still pin their hopes on oil and gas revenue, Kyrgyzstan still relies on its mature mining and agriculture industries, and Uzbekistan still charges high tariffs on imports and refuses to make its currency convertible. These policies threaten the same economic stagnation that loomed a year ago. While it has provided cash and attention, the antiterrorism coalition has not spurred re-engineering of these young economies. Many experts say that Central Asian countries have not sought economic reform in part because their new allies have not pressed them to. Corruption pervades business and government in Kazakhstan and elsewhere; American Congressman Chris Smith (R-NJ) has proposed legislation expressing the US' "strong disapproval" of Kazakh President Nursultan Nazarbayev's network of favors. Turkmenistan remains a closed society. Tajikistan and Uzbekistan have enacted some economic reform, though these countries remain inadequately linked to world markets. And Kyrgyzstan, which saw massive civil disobedience and a fatal mining accident in the spring and summer of 2002, looks less poised to grow than it did in the mid-1990s. American soldiers and international aid workers around the region have lifted local prices around bases, but increasing commerce has not found its way into a system that promotes growth. "Without [market-friendly policies] being first on the agenda and with little internal demand for economic reform, " says Ian Bremmer, head of a consulting firm called the Eurasia Group, "there hasn't been much forward progress." As it seeks to squelch the instability that extremist groups can cause, the Bush administration wants to be able to buy oil from sources unlikely to harbor or aggrieve extremist Muslims. That desire could promise steady investment in oil-rich Kazakhstan and other nations near the Caspian Sea. When American military advisors arrived in Georgia over the winter, some observers speculated that the country had become a strategic priority because of its potential carriage of oil and gas to American and European markets. But drilling, delivering and refining fossil fuels cannot foster widespread improvements in living standards if governments do not tie oil revenues into a system of savings and social investment. Since the anti-terror alliances emerged, the US has declared Kazakhstan a market economy. But despite this status, says Bremmer, Kazakhstan has "backslid," by protecting inefficient domestic companies and discouraging foreign investors. Shortly after Imangali Tasmagambetov became Prime Minister in February, Interfax quoted him as declaring that the state should be "a locomotive" propelling domestic companies and praising the country's import-substitution program. While Russia's energy companies are wooing foreign companies, this posture may weaken Kazakhstan's growth potential. "I think the investment climate has been made worse by actions of the governments themselves, like the domestic content provisions in Kazakhstan," says Julia Nanay, a director at the Petroleum Finance Company in Washington who studies the Caspian region. "I don't think the American military presence has any bearing on companies' investment decisions." The high stakes of dissent, though, may block economic progress in more subtle ways. Anders Aslund, a senior associate at the Carnegie Endowment for International Peace, says that Kazakh salary-earners witnessing Nazarbayev's antics have grown disgusted and may soon feed discord rather than prosperity. The opposition, Aslund says, reflects the consensus disappointed professionals "who think Kazakhstan can do better" than a quasi-nepotistic system. Without improving its transparency and making conditions easier for foreign investors, Kazakhstan will continue to disappoint those reformists even if American and other energy companies buy its oil at increasing volumes. Similarly, Martha Blaxall, an independent Uzbekistan expert, worries that Karimov may suppress free speech and transparency while the US needs his support, a stance that could discourage foreign investors and depress entrepreneurship. To be sure, some pro-business reform has occurred in Uzbekistan. The country has lowered some business taxes, which Brookings Institution scholar Fiona Hill calls a hopeful sign. President Islam Karimov has also made some concessions to free-market forces. "President Karimov has partially liberalized the cotton market, worked to stimulate small-medium enterprise development, and has started to more effectively regulate trade," notes Bremmer. At the same time, anecdotal reports suggest that Karimov's insistence on high tariffs and inconvertible currency may be blocking the flow of goods in Uzbek bazaars and causing protests that in turn frighten potential investors. Kyrgyzstan has also given foreign investors reason to flee. Police clashed with demonstrators in the Ak-Sui region in April, leading to five deaths; in early September, protests over the clash were still playing out in marches and arrests. In July, a fatal accident at the Canadian-owned Kumtor mine led to the mine's closure. That step led the International Monetary Fund to shave three percentage points off its growth forecast for the country on August 21, according to Interfax. The presence of American and allied soldiers near the capital cannot distract observers from Kyrgyzstan's troubles. While Karimov alternated autocratic moves with receptions for foreign dignitaries, Kyrgyz President Askar Akayev faces increasing unrest from an under-employed population and organized opposition. Tajikistan has made some progress. The IMF slapped the government for misreporting earlier loan disbursements in February, but Aslund praises it for trying to reduce deficits, keep inflation low and service foreign debt. These are incremental steps rather than watersheds. But even in a context of sudden attacks and shifting military campaigns, economic progress is likely to gain speed or stall through a web of adjustments and patterns. Like their wider effects, the terrorist attacks' influence on Central Asian economies will disseminate over time. American dignitaries visiting Central Asian capitals bring images of those capitals to the nightly news, says Bremmer, which can stimulate investors' curiosity. And if Allied soldiers become fixtures in Uzbekistan and Kyrgyzstan, they may alter economic patterns. Blaxall says the American guests are "starting to procure some things locally, including food" in Uzbekistan. As the character of this war remains unpredictable, so will its meaning and scope for Central Asian incomes.

From http://www.eurasianet.org/ 09/10/2002

Strong Asian Performance Boosts Intertek

Intertek's maiden results have been boosted by a strong performance from its Asian-based operations. The performance helped group turnover for the six months to June 30 improve 3.5% to 229.6 million. Underlying operating profits rose 17% to 37.7 million. Bottom-line profits were 23.3 million against 12.9 million last time. Intertek Testing Services inspects customers' products for safety and performance standards.It has seen demand in China and the Far East lifted by the growth of manufacturing facilities in the region. The main beneficiary has been its Labtest unit, which has seen operating profits lift 29% because of increased textile and toy testing in Asia. Clients of Labtest include some of the world's largest retail organisations, manufacturers and brands.The figures come three months after Intertek made its debut on the London Stock Exchange, raising almost 250 million towards reducing debt. Chief executive Richard Nelson says the listing has strengthened the company's balance sheet and provided greater potential for growth. However, Caleb Brett, the company's petrochemical division, saw turnover and operating profits fall marginally because of a decline in US oil shipments.

From http://www.ananova.com/ 09/02/2002

Seventh ECO Summit to Be Held in Istanbul on 13-14 October

Seventh summit of Economic Cooperation Organisation (ECO (Profile)), which unites Azerbaijan, Iran, Pakistan, Turkey, Tajikistan, Uzbekistan, Turkmenistan and Kyrgyzstan, will be held on 13-14 October 2002 in Istanbul. According to Oreanda quoting diplomatic sources in Baku, invitation to participate in the forum has been sent to all presidents of ECO member-countries. The Istanbul summit will consider issues of further development of organisation, prospects of cooperation among ECO member-countries in transport, trade, power and telecommunications spheres. The summit is expected to end with adoption of Istanbul Declaration. ECO was founded in 1985 with the purpose of strengthening of economic, technical and cultural cooperation among Turkey, Iran and Pakistan. In 1992 ECO admitted Azerbaijan, Tajikistan, Uzbekistan, Turkmenistan and Kyrgyzstan.

From http://www.uzreport.com/09/05/2002

ADB Warns of Downgrade for E. Asia Prospects

EAST Asia's economic growth prospects for 2002 and 2003 are deteriorating because of the faltering US and global recoveries, the Asian Development Bank (ADB) said here. By July this year, there had been a growing consensus that the region would enjoy GDP growth of about 6 per cent this year, up from 4.3 per cent last year, ADB president Tadao Chino told Asia-Pacific finance ministers, who wrapped up a two-day conference on Friday. 'Data released on first quarter GDP growth as well as a variety of other economic indicators for more recent months seemed to confirm that sentiment,' he told the 21-member Asia-Pacific Economic Cooperation (Apec) forum. 'However, signs of a weakening in the recovery process in the US and in the global economy in the last month or so require a re-evaluation of the forecasts,' Mr Chino said. He said he was encouraged that domestic demand held up well in many East Asian economies and had supported an export-led rebound. 'However, if this year's pickup in East Asian exports begins to ease because of slower global growth, the region's rebound may start faltering. In these circumstances, the region's economic outlook for both this year and next needs to be reassessed.' The ADB was revising its GDP forecasts for developing country members, which would be released this month in an update of the annual Asian Development Outlook, which tracks the region's economic trends. But Mr Chino added that the region had advanced in restructuring companies and the financial sector. As a result, non-performing loans were on a downward trend, and capital adequacy ratios were improving. 'Recognising the region's progress in reforms and restructuring, international credit rating agencies have, in the last six months, upgraded their sovereign credit ratings for the Republic of Korea (South Korea) and Malaysia, and revised their outlooks for the Philippines and Thailand,' he noted. Five key challenges faced Asian economies, he said: Pursuing a long and substantial agenda to improve regulation and supervision of banks. u Slimming down bank networks and staffing and revamping their processes for loan approvals and other procedures. Restructuring firms. Strengthening financial markets. Greater integration of East Asian economies in trade, investment and in monetary and financial cooperation.

From http://business-times.asia1.com.sg/ 09/09/2002

Asia-Pacific Offered Expertise as Johannesburg Followup

Johannesburg (PINA Nius Online) - The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has offered expertise and assistance to ensure meaningful implementation of World Summit on Sustainable Development outcomes. The Asian and Pacific region is "paying heavily for the combined effects of 'grow now, clean up later' policies that prevailed in the past," Kim Hak-Su, UNESCAP executive secretary, told summit delgates. Despite the introduction of environmental standards and various regulatory measures, many Asian and Pacific countries have failed to improve their environments, he said. There has been a marked deterioration in environmental conditions in Asia and the Pacific, according to "Environmental Governance for Sustainable Development in Asia and the Pacific." Rapid expansion of the region's economies has given rise to major ecological problems, the study said. These including shrinking forests, widespread land degredation, drying up of aquifers, increased waste loads, and an overall increase in pollution, it said. Kim said UNESCAP is "strategically placed and prepared to take the regional initiatives for the development of robust and lasting partnerships." He was speaking at a summit plenary session in regional implementation.

From http://www.pacificislands.cc/ 09/01/2002

East Asia's New Rail Link: All Aboard

BEIJING - The railway that is intended to bring the two Koreas together is taking Korea's two giant neighbors, China and Russia, farther apart, as they are divided about the route the new train from Seoul should take. There is a controversy heating up in four capitals - Pyongyang, Seoul, Beijing and Moscow - on the route of the new railway once it leaves the Korean Peninsula. Seoul and Beijing would like it to go west, cross China's northeast and from there join a branch of the Trans-Siberian Railroad passing through Mongolia. Pyongyang and Moscow, meanwhile, are pressing for a northern route that bypasses China completely, reaches Vladivostok and from there proceeds westward to Europe. The western track would relink two economic powerhouses, one present and one potential - South Korea and northeastern China, which 60 years ago was the Japanese industrial base in China. Currently that region is cut off from easy transportation links to Japan and South Korea. The best route is from the port of Dalian, whence ships must sail around the Korean Peninsula to reach Japan. A direct train link though the two Koreas would once again connect this area, with its population of more than 100 million people and its old industrial tradition, with Japan and South Korea. Northeastern China is currently in the throes of its worst crisis ever, with massive unemployment due to the closure of many old factories. A new rail/sea connection with Japan and Korea would free the region from its present geographical trap and make it a bridge for trade and development in Northeast of Asia, as it was during the Japanese occupation in the 1930s. However, Vladivostok, the largest Russian city in Asia, would benefit only marginally from the development of increased direct trade among South Korea, Japan and northeastern China. As it is now, almost no one takes the longer route to Moscow via Vladivostok. In the case of a rail route through northeastern China, Vladivostok would become more dependent on the goodwill and good relations of its neighbors, mainly China. To a large extent this is already happening, as a growing crowd of Chinese pushes business in the city, but with the new westbound rail, the situation would become even worse. The weakening of Vladivostok, with its 2 million inhabitants, raises the whole question of the Russian presence in eastern Siberia. The city has Asia's largest concentration of ethnic Russians. If its importance were to dwindle and it were to be absorbed more into the Chinese economic sphere, this could be the green light for a slow move into Siberia of Chinese and other Asian entrepreneurs, large and small, and loss of clout of Asian Russia. A weakening of the Russian presence in Asia would be an immense blow to the Russian identity itself, as the country lives on the idea of stretching across the Eurasian continent. Asia then would lose what has been for centuries a huge buffer area with Europe and will have the problem of confronting Europe directly. But these distant geopolitical issues, while they are urgent and pressing for Russia, are distant and obscure for China, which is keen on developing its northeast and give bread and butter to the region's restive 100 million population. For North Korea the calculus is less straightforward and more convoluted, as usual. Pyongyang favors the northern route to Vladivostok, thinking of the development of its special economic zone in Tumen, something that has been in a state of suspended animation for more than a decade. Furthermore, closer commercial links between China and South Korea, both market economies, could squeeze the North, accelerating beyond its wishes its economic transformation and pushing Russia out of the political and economic equation. Russia was for decades a necessary part of the political balance in the region, as Pyongyang would lean on either side of the socialist block, Beijing or Moscow, for support, thereby protecting its independence. Taking Vladivostok, and thus Moscow, out of the picture would leave Pyongyang at the mercy of Seoul and Beijing - an unwelcome perspective for North Korea. The mutual disagreement seems huge, but the fact that these issues have been on the table proves on the other hand that the discussion on the relinking of the railway has moved from a theoretical area to a very concrete one. In other words all parties are truly interested in a land route through North Korea. The decisive factor on the rail route could be Japan, which will become clear on Tuesday during the visit to Pyongyang by Prime Minister Junichiro Koizumi. Japan, the economic powerhouse of Asia, has the greatest interest in the railway, which would halve the time and the cost of transporting its goods to Europe. The Vladivostok route is two days longer than the China route, and this is without even considering that northeastern China is itself a market, never mind faraway Europe. Japan, moreover, is sentimentally attracted to China's northeast, and there are large Japanese investments in the area mainly because of historical links. However, all parties have an interest in safeguarding the Russian presence in Asia and thus in guaranteeing the future of Vladivostok. Two routes, one to Vladivostok and one to China's northeast, could be an option, but that might not solve the problem - who would want to take a two-day detour to Russia? The best option would be a concerted effort by China, South Korea and Japan (and possibly also the United States, to maintain its leverage with Moscow) to reassure Russia about the future of Siberia and of its city. Money is the second issue. Russia has been pleading for Chinese, Korean and Japanese investment in its natural resources in eastern Siberia; the parties ought to throw this on the table to convince Moscow that it has only to gain and nothing to lose in having Vladivostok join in East Asian development and backing the China route. This would give new essence to Russia's status as a bridge between east and west. The North Korean position is the most difficult one. Only very recently, in July, did Pyongyang launch timid economic reforms, the results of which are still uncertain. While nobody wants the sudden collapse of North Korea, nobody wants it to stay the way it is. The issue is: can anybody manage to convince the North Koreans they are better off with faster rather than slower changes and that the old balance game between Russia and China can't work anymore? (by Francesco Sisci)

From http://www.atimes.com/ 09/14/2002

Mekong River Countries Stepping Up Cooperation in 10-Year Plan

MANILA, PHILIPPINES-Ministers of six countries bordering the Mekong River will meet in Phnom Penh, Cambodia from September 23 to 25 to strengthen cooperation in implementing development projects over the next 10 years.Cambodia, the People's Republic of China (Yunnan Province), Lao People's Democratic Republic, Myanmar, Thailand, and Viet Nam have built a solid foundation over the past decade for increased trade, investment, tourism and other forms of cooperation, including human development and environmental management. Ministers and their delegations will now assess the most effective ways to implement the 10-year Strategic Framework for the Greater Mekong Subregion (GMS) adopted last year.The strategy aims to further strengthen regional cooperation towards a more integrated, prosperous and equitable Mekong region.At the forthcoming 11th Ministerial Conference of the GMS Economic Cooperation Program, ministers will meet representatives from bilateral and multilateral donor institutions as well as international and regional organizations. The meeting will launch a major effort to mobilize support from developing partners for the GMS Program's 10 flagship initiatives. The flagship initiatives will bring greater connectivity to the GMS region through:construction of three major transport corridors;facilitation of cross-border trade, investment and tourism; telecommunication links; promotion of power interconnection and trading arrangements; enhancement of private sector participation and competitiveness; building of strategic environmental framework; development of human resources and skills competencies and flood control and water resource management. The Ministerial Conference will also finalize preparations for the first ever GMS Summit of Leaders, which will be held on 3 November 2002 in Phnom Penh. The Summit will give leaders of the six countries the opportunity to take stock of what has been achieved and provide new impetus to regional cooperation. The ASEAN Summit that follows the GMS Summit will also provide an opportunity to further integrate the GMS Program with the interests of East, Southeast and South Asia.Since the inception of the GMS Program in 1992, the Asian Development Bank (ADB) has been a core partner. ADB and its partners have financed ten major infrastructure projects, representing investments totaling almost US$2 billion. ADB's share has been $772 million in loans. In addition, ADB has provided $56 million in technical assistance to support initiatives for human resource development, tourism, the environment, trade and investment. Such assistance has also addressed social issues such as HIV/AIDS and drug trafficking.

From http://www.adb.org/ 09/19/2002

WSI Internet Soars as Asian Women Take to the Net

SINGAPORE - WSI Internet continues its rapid Asian franchise expansion amidst record levels of Internet use among women in Asia-Pacific.According to new data released by Nielsen-Netratings (April 2001 to April 2002), the percentage of female Internet users in Asia-Pacific is experiencing significant growth. Japan saw the biggest growth among female users at 5.5 percent, while Singapore rose by 4.7 percent, and Hong Kong grew by 2.3 percent.Rounding out the list are Korea and Taiwan, which grew by 2 percent and 1.3 percent respectively. According to the report, women in the Asia-Pacific region are also spending longer online than in previous years. In Japan, women spent 32 percent more time online, while Singapore saw a 30 percent increase, and Taiwan women spent 18 percent longer online.Amidst the explosive Asian Internet growth, one company, WSI, continues to break franchise records. Now in its seventh year of business, WSI has established a record - 700 franchises in 87 countries worldwide, and is currently rated as the "#1 Internet Services Business", and the "4th Fastest Growing Franchise in the world". WSI has established one of the world's most successful franchise systems.No specific computer or Internet experience is required to operate a WSI franchise, and many of WSI's 700 franchisees work from a home office. WSI offers its franchisees one of the most complete and comprehensive training & certification programs available among franchise companies today. As well, a dynamic, on-going support program is custom-tailored to meet the unique and individual needs of each new franchisee. WSI franchisees (internet consultants), both men and women, are of all ages and backgrounds. Like a modern day architect, the job of each WSI franchisee is to assess their clients' business needs using WSI's patent-pending Lifecycle? System. The client's Internet Solution is then custom tailored to both reduce their business overheads and increase their revenues. Each client's Internet Solution is then uniquely built at one of WSI's many certified global production centers. Each WSI production center is strategically located in low cost, high-tech regions such as India and Australia - delivering each client a results oriented, technologically advanced Internet solution at an economical cost. WSI's international organization of franchise owners are at the forefront of the digital revolution, changing the way the world does business. WSI's success stems from a model that stresses the importance of long-term commitment to clients. To learn more about WSI, visit http://www.wsicorporate.com/business.asp?id=5293.

From http://www.atimes.com/ 09/21/2002

September 11 Dealt Blow to Civil Society Development in Central Asian States

Many human rights advocates and political analysts believed civil society development in Central Asia would suffer as a consequence of the September 11 terrorist attacks. Ultimately, it has, but not in ways that many expected. Incumbent authorities have indeed implemented measures that have eroded political freedoms. At the same time, opposition political movements are today active in several Central Asian nations, especially in Kazakhstan and Kyrgyzstan. A year ago, in the immediate aftermath of the terrorist tragedy, conventional wisdom expected an expanded crackdown against all those challenging authority in Central Asia. One US government source at the time said the attacks could give Central Asian leaders a "green light to quash civil liberties." [For background see the EurasiaNet human rights archives]. A few human rights experts voiced concerns about a drastic increase in arrests, especially in Uzbekistan, where President Islam Karimov's government was already busy rounding up suspected religious radicals. [For background see the Eurasia Insight archives]. Such mass arrests never occurred. But that is not to say that regional governments did not expand repressive activities. They just became more difficult to measure, some human rights advocates say. "You can't document an actual surge in [rights abuse] cases," said Catherine Fitzpatrick, CIS Program Director at the International League for Human Rights. "It's more about a new cynicism of [Central Asian] governments. They seem impervious to petitions from abroad " that seek a change in their behavior, Fitzpatrick continued. "They now feel like they don't have to go through the motions" of espousing democratic rhetoric. Authoritarianism has long been the chief feature of political life in Turkmenistan and Uzbekistan. But over the last year, repressive tendencies have rapidly developed in Kazakhstan and Kyrgyzstan. "There seems to be a decreasing conviction [among Central Asian leaders] that democratic methods are the best approach," John Schoeberlein, president of the Central Eurasian Studies Society. In Kazakhstan, President Nursultan Nazarbayev's administration in recent months has engineered legislative changes that make it much harder for opposition parties to mount electoral campaigns. The government has also imprisoned two high-profile opposition figures [For background see the Eurasia Insight archives] and has imposed far-reaching restrictions on independent media. "You now see repression of the press in a country [Kazakhstan] that used to enjoy a relatively free press," Schoeberlein said. The Kyrgyz government has taken similar action to stifle opposition. President Askar Akayev is pressing ahead with a constitutional reform process that many observers believe will greatly enhance executive authority. And citing security concerns, the government on September 9 proposed a bill that would outlaw virtually all forms of organized political protest for a three-month period. "Kyrgyzstan is taking the Belarus path," Fitzpatrick said. Surprisingly, Uzbekistan has seemed the most willing of all Central Asian states to make liberalization gestures. In March, for example, Uzbek authorities officially registered the Independent Human Rights Organization. Despite such moves, President Islam Karimov remains an opponent of political pluralism, experts say. "In Uzbekistan there have been some attempts to satisfy international concerns. But it is difficult to have confidence that the measures are taken out of conviction [in democratic principles]," Schoeberlein said. [For additional information see the Eurasia Insight archives]. According to Schoeberlein, Central Asian governments have been "steadily moving away from democratization" since the early 1990s, when the Central Asian states gained their independence. The September 11 attacks "hastened this trend by bringing the issue of security to the forefront, while democratization and human rights took a back seat," he said. The dichotomy of Central Asia's situation is that the September 11 terrorism tragedy also infused opposition movements with a sense of urgency. Over the past year, high-profile political opposition movements have come together in Turkmenistan, Kazakhstan and Kyrgyzstan. Turkmen opposition leaders, working from abroad, have pressed efforts to oust the country's leader Saparmurat Niyazov. Over the past year, several prominent former members of the hierarchy have joined the opposition, including former Foreign Minister Boris Shikhmuradov. [For background see the Eurasia Insight archive]. In Kazakhstan, a powerful opposition movement, Democratic Choice of Kazakhstan, emerged in early 2002 to pose a significant challenge to President Nursultan Nazarbayev's authority. [For background see the Eurasia Insight archive] Meanwhile, opposition protests in Kyrgyzstan have continued since a March confrontation that left at least five dead. Over the past year, the Kyrgyz political opposition has become more radicalized than in other Central Asian nations to the point that a major point of its political program is to force Akayev's resignation. To Schoeberlein, the increase in opposition activity does not come as a surprise. "If opposition movements are to have a future, then they must act now," Schoeberlein said. "The longer that authoritarian governments have to institutionalize the less likely that democratization will take place." The United States has had a "mixed impact" on Central Asian political developments over the past year, according to Schoeberlein. Expanded strategic cooperation among the United States and Central Asian states, under the auspices of the campaign against terrorism, has "emboldened" regional leaders in their move away from democratization, he suggested. Because the United States needs access to Central Asian military bases, Washington is less likely to protest government efforts to cement their authority, the thinking in Central Asian capitals goes. Conversely, Fitzpatrick said developments over the past year have left opposition leaders frustrated with the United States. "There was an expectation [among government critics] that the United States would use its leverage to put the brake on repression," Fitzpatrick said. Given current trends, Schoeberlein, Fitzpatrick and other observers express concern about the possibility of violent confrontation, particularly in Kyrgyzstan. The anti-democratization trend pursued by authorities in Central Asian states is seems to be on a collision course with the agenda of various opposition movements. Rising frustration could give way to desperation that, in turn, fuels political violence. "These authoritarian states are always brittle," Fitzpatrick said. "On the other hand, they [Central Asian leaders] are very determined" to retain a firm grip on power.

From http://www.eurasianet.org/ 09/11/2002

TOP

Shanghai Launches Anti-Hacker Monitor System

Yesky Company lately issued a series of online information security solutions in Shanghai. The Tiantian hacker invading examining and preventing system is the first of its kind launched by the company, which has cracked a hard nut in safeguarding online information security badly needed by the country. In the meanwhile, the company set up a research center in Shanghai. Since September 2000, the company began to undertake several important Internet security projects including Shanghai Demonstration Project S219, Shanghai Administration Network, Shanghai Pudong area, Shanghai Stock Exchange, Shanghai Medical Care system and some others. The online information security systems developed by the company including hacker alert system, online scanning system, anti-virus system, CPU protection system, Webkeeper have been widely used in government, army, finance, telecom, energy, communication and others fields.

From People's Daily 09/19/2002

Central Government to Invest 90 Billion Yuan in Tibet

The Chinese central government will spend over 90 billion yuan (about 10.8 billion US dollars) in Tibet during the country's 10th five-year plan period (2001-2005),said Legqog, Chairman of the Tibet Autonomous Region. He made the remarks Monday in Lhasa during an interview with reporters from 25 news organizations from 9 countries including Germany, the United Kingdom and the United States. During the interview, Legqoq noted that, during China's fourth working conference on Tibet last year, the central government set a goal of investing 31.2 billion yuan in Tibet on 117 key projects during the 2001-2005 period in order to improve the infrastructure as well as the quality of life. The government also decided to grant Tibet 36.9 billion yuan in fiscal subsidies. He further noted that the central government has offered a special policy to Tibet: the government will approve any project benefiting the Tibetan people. To date, the central government has invested 8 billion yuan in projects in Tibet. It is estimated that, during the 2001-2005 period, the central government will spend over 90 billion yuan in Tibet. Statistics show that during the first half of 2002, 18 of the 117 key projects in Tibet were completed, while 69 are in progress, with a total investment over 27 billion yuan.

From http://ce.cei.gov.cn/ 09/16/2002

Nortel to Provide Optical Ethernet Network in Southeastern China

Nortel Networks has won a contract from China Telecom to build a high-capacity, high-security optical Ethernet transmission network to connect Shaoxing, in the southeastern Zhejiang province, with the cities of Xinchang, Shangyu, Shuji and Bingzhou. China Telecom plans to use the new system, which will be launched by the end of the year, initially for data traffic, followed by voice services as market demand rises.

From Nortel Networks Press Release 09/16/2002

China to Open Up Its Basic Telecommunications Sector

China may further open up its basic telecommunications by late 2003 or early 2004, the Beijing-based International Finance News quoted insiders as saying. By then, prices of China's basic telecommunication services will be largely up to the market rather than, as until now, the government, according to the newspaper. Before this, the Ministry of Information Industry, the watchdog of China's telecommunication sector, already published nine categories, covering 34 items, of telecommunication services, whose prices are subjected to the free ups-&-downs in market. These published items all belong to the valued-added services, a category for which suppliers add a value to the customer's information. With this move, carriers of basic telecommunications - services mainly focusing on the relay of voice or data from sender to receiver - will be entitled to set the price tags on their own, simply after registering in relevant telecommunication administration. But the specific pace of the opening-up is closely tied to whether competition in the whole telecommunication sector is adequate enough, the newspaper said. The planned opening-up of the basic telecommunications is another step forward by China carrying out its World Trade Organization (WTO) commitments, the newspaper quoted the insiders as saying. In a sequence of first the value-added and then basic telecommunication services, China is expected to open them all within three to five years after the WTO entry. To the further opening-up decision, China's main telecommunication carriers responded in mixed manners. China Unicom and China Mobile, two domestic heavyweight mobile telecommunication servers, appear calm, citing the already sizzling competition in their sector. As a matter of fact, prices of basic telecommunications in the mobile sector have, to a large extent, walked beyond the government's hands. There will not be too much impact upon this sector even with a complete lift of the governmental price control. Analysts think China Telecom and China Netcom might have to bear more brunt coming with the likely liberated market. Both controlling nearly half of China's fixed-line phone services, a sector traditionally under the government's wing, the two may well likely to launch a price war against each other to woo more customers, the newspaper said. The present circumstances may well support such a prediction. After the restructuring in the past May, both China Telecom and China Netcom have got their own nation-wide fixed-line backbone telecommunication network. Moreover, the government permits each of the two to penetrate into the other's market. The other two basic telecommunication service suppliers, China Railcom - so far still relatively young in China's national telecommunication market - and China Satecom, whose business focuses mainly on Satellite-based communication and Internet services, have not aired their reaction yet.

From http://english.peopledaily.com.cn/ 09/17/2002

China's Economy to Grow at 8 Percent in 2006: Economists

The Chinese gross domestic product (GDP) was forecast on Sep.3 to enjoy an annual growth of between 7.5 and about 8.3 percent between 2002 and 2006, while the world economy is striving to climb from about minus 2 percent. The forecasts were made by economists at a two-day regional strategic forecast conference held by the Economist Corporate Network and attended by 200 business leaders on Sep.3. Compared to China, the world economy was forecast to grow at about 4 percent in 2006 - slowed down by sluggish growth of the economies of the United States, Europe and Japan. Robin Bew, the network's chief economist, told the conference that the US economy, in particular, suffered a catena of corporate scandals and equity market slump, that have hampered economic recovery, while Europe suffers from the danger of entering a double-dip recession. Vice President and Director of the network for China Lois Dougan Tretiak said China's growth is particularly driven by increasing consumption spending and exports, and stable investment. "Consumer spending is rising in China, as unemployment falls, and China's welfare net is perceptibly stronger," Tretiak remarked, estimating that the annual consumption spending will grow by about 7 percent in 2006. Annual exports will increase by about 13 percent in 2006; annual investment, about 12.5 percent; and annual inflation rate, around 2.5 percent in 2006, according to a forecast chart presented by Tretiak. She stressed that she has every confidence that future Chinese government officials will continue to be committed to China's World Trade Organization commitments and will maintain China's political and economic stability. The Chinese economy will also see the financial industry experience changes as new financial instruments widen business options, she said. Forecasting for the nearer term, she said estimates for the annual GDP growth for the years of 2003 and 2004 are 7.9 percent and 8 percent. Connie Bolland, a Hong Kong-based regional economist for the network told the media that China's performance remaining strong is good news for the economy of the Hong Kong Special Administrative Region. She said the current challenge for Hong Kong is to evolve a complementary growth model whereby it can both lead and gain from China's growth drives, especially in South China. "More cross-border economic liberalization can facilitate such growth. The local business community...should not forget about China's vast potential as Hong Kong's market and business partner," she said. The Economic Corporate Network service is offered by the Economist Group, publisher of the Economist newspaper.

From http://ce.cei.gov.cn/ 09/04/2002

IP Phone Numbers to Stir Japan Demand

TOKYO, Japan (Reuters) -- The planned allocation of telephone numbers to Internet protocol (IP) phones in Japan later this year will stir demand for the new technology, squeezing profits at conventional phone companies, analysts say. The Telecommunications Ministry will start taking telecoms carriers' applications for IP phone numbers from late September with the aim of allocating them by the year-end, enabling users to receive calls from regular phones. "The impact will be substantial. It (the number allocation) will give IP phones a chance to become a real alternative to the current fixed-line phones," Tsunehiro Tosa, senior researcher at Yano Research Institute, said. Yano Research expects individual IP phone users to grow to 6.51 million by 2005 from 1.58 million in 2001, prompted in part by the number allocation, which will be the world's first comprehensive allotment of phone numbers for IP phone service. The IP phone system carries voice over packet-based networks controlled by routers, which are cheaper to build than conventional telephone networks with costly circuit-switching systems, allowing lower call rates. But its users, while being able to dial outward, currently cannot receive calls from ordinary phones through the IP network, curbing demand for the new communication method. Improved functionality of the cheaper phone service is good news for recession-hit households as well as corporate customers, which are eager to cut costs after a decade-long economic slump in Japan. But it could deliver an additional blow to conventional carriers, which already face fierce price competition and declining voice traffic as more people turn to mobile phones. "Phone rates will certainly come under pressure. The more IP phones become like regular phones, the more people will be sensitive to the difference in phone charges between the two services," said Hitoshi Hayakawa, analyst at ING. Started by SoftbankInternet investor Softbank Corp sent a shockwave through Japan's telecoms sector in April when it started IP phone service enabling users to call anywhere in Japan and the continental United States for 7.5 yen (6.25 cents) per three minutes. It costs about 8.5 yen per three minutes to make a local call using conventional carriers such as Nippon Telegraph and Telephone Corp (NTT) and KDDI Corp. Softbank had 413,000 IP phone users in August. Increased IP phone usage is expected to exert heavy pressure on conventional phone companies in general, but it is likely to be long-distance-oriented carriers such as KDDI and Japan Telecom that will suffer the most. IP phones usually offer flat-rate service regardless of the distance, giving the maximum incentive to long-distance callers to migrate from conventional services. In contrast, NTT is relatively well positioned as it holds extensive optical fiber networks that will be used as a major conduit of its own IP phone service. Also, NTT virtually monopolizes so-called "last-mile" phone lines into homes and offices, leaving other carriers little choice but to use the telecoms giant's local lines to offer their services including IP phones. "There is a possibility that companies without access lines like Japan Telecom and KDDI could lose market share sharply," said Motoharu Sone, senior analyst at UFJ Tsubasa Research Institute. Analysts say the shift to IP phones is likely to come gradually, rather than in one giant leap. KDDI, Japan's second-largest telco, plans to offer IP phone service for individual customers on a trial basis after it acquires IP phone numbers.

From http://asia.cnn.com/ 09/11/2002

China to Catch Japan by 2032: Survey

Some 79 percent of Japanese and 59 percent of Chinese people believe China will catch up with Japan economically within 30 years, according to the results of a survey conducted in both countries and released Sunday. But 43 percent of Japanese and 67 percent of Chinese do not have a favorable opinion of each other's countries. Of the Japanese who did not have a favorable view of China, 35 percent said the increasing number of Chinese illegal immigrants and crimes involving Chinese is the main reason. That was the number one reason and is up from second place in a similar survey conducted five years ago. Twenty-eight percent of the Japanese surveyed had an unfavorable view due to what they considered as China's anti-Japanese interpretation of history. The survey was held prior to the 30th anniversary of the normalization of ties between the two countries and was conducted by a polling body comprised of Kyodo News and its member newspapers. The survey from five years ago showed "one-party dictatorship" was the main reason Japanese had an unfavorable opinion of China. Among Chinese respondents, 79 percent said they do not feel friendly toward Japan because it does not reflect on its aggression toward China and lacks an understanding of history. Seven percent said Japan is becoming nationalistic. Asked about the increasing number of crimes committed by Chinese, 49 percent of the Chinese respondents said they do not know about it. On the issue of Japan's prime minister paying tribute at the war-related Yasukuni Shrine in Tokyo, 54 percent of Japanese said the prime minister should visit the shrine, with 33 percent opposed. Among Chinese, 75 percent said a Japanese prime minister should not visit the shrine. On the issue of Taiwan, which Beijing regards as a renegade province, 71 percent of Japanese said they want the situation to remain the same, while 70 percent of Chinese said Taiwan should be reunited with China. Asked whether China poses a military threat to Japan, 36 percent of Japanese respondents said "yes" -- down from 46 percent five years ago. This apparently reflects China's missile test-launches into the waters around Taiwan in 1996 and the underground nuclear tests that were suspended that year. Meanwhile, 77 percent of Japanese said the government should either decrease or stop official development assistance to China, up 10 percentage points from five years ago. Although 33 percent of Chinese said ODA should remain the same, 50 percent said they think the funds should either be curbed or are unnecessary. Asked whether they like Chinese people, 65 percent of Japanese said they had no particular feeling one way or the other, while 22 percent said they like the Chinese and 12 percent said they do not. Among Chinese respondents, 42 percent said they dislike the Japanese, while 31 percent said they like them. The survey was conducted by interviews in Japan and China prior to the 30th anniversary of the two country's normalization of ties on Sept. 29. The nationwide survey in Japan questioned 1,884 people over 20 years old on Aug. 31 and Sept. 1, with both genders represented almost equally. The survey in China covered 2,185 people, with both genders represented almost equally, in Beijing, Shanghai, Guangzhou, Shenyang and Lanzhou on Aug. 17 and 18. The People's University of China in Beijing conducted the survey in China.

From http://www.japantimes.com/ 09/23/2002

Young Japanese Leaders Join with the World Economic Forum to Launch "Blueprint For Japan 2020"

The World Economic Forum announces today the launch of its Blueprint for Japan 2020 project created by Professor Klaus Schwab, President of the World Economic Forum, within the framework of the Young Asian Leaders Initiative. The objectives of the project are to identify and strategize on how Japan should approach its ten most significant challenges in building a revitalized Japan by 2020. Creating a dynamic and vibrant Asia, especially given the complexity of the 21st century, requires the engagement of young leaders from all walks of life. In this context, the World Economic Forum has expanded its Global Leaders for Tomorrow programme to include a regional focus by initiating the Young Asian Leaders Initiative for Japan, China and South Korea. Young Asian Leaders are chosen on the recommendation of the members, partners and other constituents of the World Economic Forum, in an independent and impartial selection process. Selection is based on the candidates' leadership, professional achievements, global and social awareness, and commitment to addressing issues beyond their immediate professional interests. The networks created will provide opportunities to share experiences and exchange professional views to jointly address issues of common concern. This is why the Blueprint for Japan 2020 has been launched. "Asian countries face particular challenges as a result of globalization and increasingly rapid changes in information, social structures and technology. It is crucial that Asia's young leaders have a space in which they can ensure that their society adapts and addresses challenges in a coherent manner," said Frank-J??rgen Richter, Director for Asia of the World Economic Forum. "We hope to contribute to Asia's social and economic development by discovering young leaders in Asia and promoting exchange among them." The Young Japanese Leaders who are launching the Blueprint for Japan 2020 include: Joichi Ito, President, Neoteny; Oki Matsumoto, President, Monex; Hiroshi Mikitani, President, Rakuten; Keiichiro Asao, Democratic Party; Motohisa Furukawa, Democratic Party; Yoshimasa Hayashi, LDP; Taro Kono, LDP; and Yasuhisa Shiozaki, LDP; Motoshige Ito, University of Tokyo; and Jiro Tamura, Keio University. The group of young leaders will meet regularly in Tokyo to identify the ten core issues of concern, and then draft proposals. They will use the World Economic Forum's 11th East Asia Economic Summit in Kuala Lumpur, Malaysia, from 6 to 8 October, as an opportunity to present their work to other Young Asian Leaders gathering at the Summit, and also to assess next steps. The Blueprint for Japan 2020 will be presented to the 1,000 corporate members of the World Economic Forum at its Annual Meeting 2003 in Davos where young leaders will take into consideration comments from the international political and business communities and further develop the Blueprint.

From http://www.weforum.org/ 08/30/2002

Japanese Colleges to Get State Funds to Find the Next Yahoo!

Tokyo (Bloomberg) -- The Development Bank of Japan will invest as much as 7.5 billion yen ($63 million) to help fund university start-ups, part of a government plan to create 1,000 new companies within three years to boost the economy. The state-owned lender is prepared to supply half the money for five new start-up funds, said Kenjiro Kobayashi, the bank's director-general of new business, in an interview. Using government funds to encourage college students and professors to turn research into businesses may spur more private investment. New funding sources are vital to supplement a banking system that for decades has focused on cementing ties with large businesses such as the Mitsubishi, Sumitomo and Mitsui groups. ``The venture capital industry is really immature compared with the U.S.,'' said Hiroshi Miyamoto, Japan representative at Constellation Partners, which has invested $450 million in venture capital funds worldwide. ``Japan has a herd mentality and everybody wants to do what the guy next door is doing.'' College campuses spawned some of the biggest new U.S. companies in recent years, including Dell Computer Corp., the world's second-largest personal computer maker. Stanford University electrical engineering students Jerry Yang and David Filo formed Yahoo! Inc. in 1994, the most-used Internet search site, receiving funds a year later from Japan's Softbank Corp. Japan hasn't developed a large venture capital industry, in part because investors take fewer risks than their U.S. and European counterparts, government officials said. Softbank Slump Venture capital as a percentage of gross domestic product amounted to 0.01 percent in Japan in 2000 compared with 0.19 percent in the U.S. and 0.57 percent in the U.K., according to the Organization of Economic Cooperation and Development. ``Our purpose is to help create new baby businesses and as they develop they can receive more money from private investors and banks,'' Kobayashi said. Many venture capital stock markets plunged in recent years, underscoring the risk for investors. Softbank, Japan's biggest Internet investor, lost 95 percent of its market value since December 1999 and is selling assets to pare $3 billion of debt. On Aug. 29, Yahoo! paid about $100 million to repurchase 11.1 million shares from Softbank. Nasdaq Stock Market Inc. last month ended its Nasdaq Japan venture, established two years ago to encourage Japanese start-ups to list on its exchange. Softbank has a 43 percent stake in Nasdaq Japan, which signed up less than two-fifths of targeted companies. Bank Lending The average funding for new ventures in Japan is about $3 million, half that in the U.S., according to SunBridge Inc., which invests in new Japanese companies. In 1999, 275 university-linked businesses opened for business in the U.S., against 34 in Japan, the Japanese government said. Private investment is needed to supplement bank lending, which hasn't risen in Japan since 1996. Interest rates have been close to zero since March 2001 as the Bank of Japan bids to spur growth and prevent consumer prices from extending four years of declines. Increased funding may not be enough, investors said. Japan doesn't offer the same tax breaks to new companies that are available elsewhere. It is also harder to hire and fire people in Japan and there are fewer organized groups of wealthy investors. Japan has about 250 private equity funds, compared with more than 800 in the U.S., which has an economy double the size, according to Thomson Financial. Its venture capital industry is about a tenth the size of that in the U.S., SunBridge estimates. People trying to start companies in Japan often meet resistance from property owners who don't want to rent space to companies without taking a large deposit. Credit History Japanese banks and investors are often unwilling to finance start-ups as they don't have a credit history or any collateral in case of a default, investors said. Neoteny, a venture capital company whose chairman is former Goldman Sachs Group Inc. partner Jun Makihara, has spent 2.8 billion yen on wages and administrative costs since December 1999. It invested 1 billion yen in technology companies including BeatCraft, which makes software for wireless devices. ``We've burned through a lot of our cash in operating expenses,'' said Makihara. ``We may need to raise more money.'' Some investors say Japanese universities may take a while to prove that their ideas can be turned into profitable businesses. ``It would be a rare university professor I would want to back in a start-up,'' said Allen Miner, who started SunBridge in December 1999 and invested $11 million in 18 Japanese companies.

From http://quote.bloomberg.com/ 09/03/2002

Detailed Plans Unveiled for New Asan City

The Ministry of Construction and Transportation (MOCT) unveiled on Wednesday detailed plans for the first-phase development of the new city in Asan, Chungnam Province, 80 km south of Seoul. The new residential town, covering an area of 2.65 million square meters, aims to siphon off the population of Seoul and Gyeonggi Province, a densely packed region. The ministry said it has designated a block of 3.53 million square meters of the designated region, surrounding Cheonan Station on the new Seoul to Busan bullet train, as the proposed site for the first phase of construction for the residential complexes. The site will house 12,500 apartment and residential units. Pre-construction sales of the units will be done in the first half of 2004, and the units will be available by around the end of 2006, MOCT explained. The new town is only a 30-minute ride from Seoul on the high-speed railway. The development will be completed in three different phases lasting until 2020, and the entire city is expected to accommodate a total of 53,500 housing units. According to the ministry, several universities, including Soonchunhyang Univ. and Yonsei Univ, have been negotiating to construct branches in the new town.

From http://english.chosun.com/ 09/25/2002

Mobile Phones to Replace Credit Cards

After overcoming some challenges, mobile commerce will eventually enable people to buy everything from movie tickets to gasoline using their wireless phones which in the future will act more like electronic wallets and purses. Three mobile phone carriers _ SK Telecom, KTF and LG Telecom _ are now rushing to offer customers an early glimpse of the benefits of m-commerce. To use the m-commerce service, which currently allows transactions over the wireless Internet at selected locations, customers first need to invest in special mobile phones equipped with infrared transmitter/receivers. Instead of carrying money, customers will be able to buy groceries or remit their deposits from banks by punching a payment button on their mobile phones. The mobile phones then transmit the users' pre-registered payment information, such as credit card numbers and passwords, to both the credit card companies and the shops over an infrared interface. Only Kookmin Card holders currently have access to the service, but LG Card and BC Card holders will also be included from next month. Although still in its infant stage, KTF and LGT are running commercial m-commerce services. SKT, a top mobile carrier, is still preparing to introduce a commercial service in November with presumably more advanced technology. KTF already claims some 900,000 users for its m-commerce service called ``K-merce,'' allowing customers to transfer money from their bank accounts. Its prime-time television advertisement has actor Ahn Sung-ki paying a bill via his mobile phone at a coffee shop. SKT has unveiled its ambitious plan to grab a chunk of the m-commerce market with its own payment scheme. Unlike its two rivals, SKT is likely to use a ``smart'' mobile phone in a bid to coax customers with increased security, one of the biggest potential hurdles to widespread adoption of m-commerce services. The leading mobile operator plans to sell some seven million smart phones by 2005, said SKT spokesman Kwon Chul-keun. ``The demand for m-commerce is expected to explode next year as mobile carriers begin a race to stake out ground in the market,'' he said. According to LGT, the size of the m-commerce market is estimated to reach 1.2 trillion won by 2005, compared with an expected 200 billion won this year. Traditional retail banks have raised concerns about the intrusion of mobile phone companies. What's more, the government is set to draft a new law governing online banking transactions that allows non-financial companies to conduct banking business in cyberspace. Wireless transactions are the right way to provide added customer convenience, but traditional banks claim the mobile carriers aren't ready to ensure the security needed for m-commerce. The number of m-commerce subscribers will skyrocket to more than 29 million in 2004, according to the International Data Corp. (IDC), a global mobile telecommunications analyst. It added the value of their transactions will go from being too small to count, to close to $21 billion over the same time frame. ``Wireless vendors can help break down some of the barriers to growth in the market by making the mobile electronic shopping experience fast and easy,'' the IDC points out. (by Kim Deok-hyun)

From http://search.hankooki.com/ 09/17/2002

North and South Korea Reconnect Rail Links

North and South Korea began work on reconnecting two railways across their sealed border on Wednesday in a symbolic step that Seoul said would "lay a bridge of reconciliation" between the two countries. Ceremonies to mark the start of construction were held on both sides of the 4km-wide landmined buffer zone that has divided the communist North and capitalist South since the Korean war ended in 1953.The breakthrough, a day after Japanese prime minister Junichiro Koizumi's historic visit to Pyongyang, added to growing momentum behind efforts to reduce tensions between North Korea and the outside world. Kim Suk-soo, South Korea's acting prime minister, said the railways heralded "a new beginning" for Korea, "burying a history marked by the scar of war and the pain of division." North and South Korean armed forces, which usually glower at each other across the divide, have agreed to co-operate in clearing landmines from the path of the two railways. Mr Kim said the rail link would allow the two Koreas, divided since the second world war, to "peacefully coexist" and build a "single economic community", reviving the North's shattered economy and eventually making reunification possible. Reconnection of the railways would be the biggest prize to date of South Korean president Kim Dae-jung's "sunshine" policy of inter-Korean reconciliation, less than six months before he leaves office. Inter-Korean engagement froze in June, when a naval clash between the pair left scores of sailors dead. However, relations have recovered rapidly since Pyongyang expressed "regret" for the sea battle. Progress in inter-Korean relations, together with restoration of ties between Pyongyang and Tokyo, has raised hopes that North Korea could be emerging from aggressive isolation. Reforms to North Korea's crumbling communist economy over the summer added to excitement about possible change in the totalitarian state. Once completed, the two railways - one along each of the peninsula's east and west coasts - would link South Korea by land to China, Russia and Europe, making it possible for goods and passengers to travel from Seoul to London. A tentatively proposed tunnel between South Korea and Japan could extend the route to Tokyo. Vladimir Putin, Russia's president, has lobbied for the restoration of inter-Korean rail links and offered to help upgrade North Korea's railways in hope that the scheme will breath new life into the Trans-Siberian railway. "Russia is ready to offer its best efforts to open a transport network between the Korean peninsula and Europe," said Mr Putin, adding that the railways would "strengthening peace and security" on the Korean peninsula and surrounding region. Trains could be travelling across the border by the end of this year if construction goes smoothly. However, the project has been dogged by delays since reconnection was agreed two years ago at the historic summit meeting between Kim Dae-jung and North Korean leader Kim Jong-il. Analysts warned that even after the railways were completed there was no guarantee that secretive North Korea would allow trains to move freely across the border. "The economic benefits of the railway will not be felt for a long time," said Ahn Young-sop, professor of North Korean studies at Myongji University. " The short-term significance is the symbolism of breaching the divide and the confidence it will build between the two armies." (by Andrew Ward)

From http://news.ft.com/ 09/18/2002

Workers' Tax Burdens Surge Since 1997 Crisis

Wage earners were found to have shouldered growing tax burdens since the 1997-98 Asian financial crisis, which led to a widening gap between rich and poor. Rep. Yim Tae-hee of the main opposition Grand National Party (GNP) said yesterday that wage earners' income tax payments have increased by 59.6 percent to 7.67 trillion won last year from 4.8 trillion won in 1998. Citing statistics released by the Ministry of Finance and Economy, Yim made the remarks during the first day of a two-day parliamentary inspection of the ministry. The collected income tax from wage earners was estimated at 4.93 trillion won in 1999 and 6.51 trillion won in 2000. Yim pointed out that the sharp increase was made despite the government's publicity campaign that the authorities have made efforts to ease tax burdens for wage earners by lowering tax rates and providing more tax deductions. He pointed out that wage earners' nominal income rose by 28.1 percent in 2001 from 1996. The inflation-adjusted income grew by 6.3 percent over the last six years. However, the GNP representative said the total income tax collected from wage earners jumped by 1.23 trillion won to 2001 from 1996, despite the number of wage earners declining by 1.02 million during the six-year period. According to Yim, per capita minimal tax burdens for wage earners surged by 47.3 percent 1.2 million won in 2000 from 695,000 won in 1996. Rep. Kang Un-tae of the ruling Millennium Democratic Party (MDP) also said that wage earners showed a higher increase than businesses in their tax burdens over the past years. He pointed out that income tax collected from wage earners accounted for 41.1 percent of the total income tax revenues, estimated at 18.66 trillion won in 2001. The number continued to rise from 37.2 percent in 2000, 31.1 percent in 1999 and 28 percent in 1998. In the meantime, income tax revenues collected from businesses were estimated at 3.9 trillion won in 2001, 2.84 trillion won in 2000, 2.49 trillion won in 1999 and 3 trillion won in 1998. Thus the percentage of business income tax over the total income tax stood at 21 percent in 2001, 16.3 percent in 2000, 15.8 percent in 1999 and 17.5 percent in 1998. Rep. Kang maintained that the statistics showed that wage earners have been forced to shoulder higher tax burdens than business operators. He noted that 53.1 percent of total business operators enjoyed 100-percent tax exemption in 2000, while only 45.1 percent of workers did not pay any income tax. He also said a gap between rich and poor has widened since the economic turmoil in late 1997. The Gini coefficient, a key measurement of income discrepancy, jumped from 0.283 in 1997 to 0.319 in 2001. The coefficient shows a wider income difference as it approaches 1. (by Park Yoon-bae)

From http://search.hankooki.com/ 09/16/2002

TOP

PM: Govt Will Protect Local Businesses

PANGKOR: While Malaysia still needs foreign direct investment (FDI), the country is not ready yet to lift the conditions put in place to safeguard its economy, as its businesses will not be able to compete with giant business organisations in the globalised economy. Prime Minister Datuk Seri Dr Mahathir Mohamad said these giant business organisations seemed to be merging and acquiring each other to become so big that they would be able to overwhelm the country completely. He said despite the outflow of FDI due to competition, Malaysia was still not too badly off as its industries were able to compete in the domestic and world markets. "Certainly, we will not be able to compete with the giants which are preparing to invade our country. We think they will not provide us with fair competition. If they are allowed in unrestricted, then all our banks and companies would go under," he said. Dr Mahathir said although Malaysia was critical of globalisation, it was not against this idea as the country had subscribed to the concept all along. He noted that Malaysia's high level of economic growth and its transformation from being an agrarian economy to an industrial economy was the result of FDI. He said if globalisation, including FDI, was to bring benefits to poor and developing countries, then it had to be regulated by taking into account the weaknesses and the sensitivities of these countries. Dr Mahathir also proposed that companies that benefited from globalisation pay a tax to the world for building the infrastructure so much needed by the poor and developing countries to make them more attractive to foreign investors. Dr Mahathir's proposal for a world tax was supported by Peter Bracher of Tesco Stores Plc Britain who said that the absence of good public infrastructure in Cambodia was the reason why Tesco did not expand its operations into that country. Tesco, which recently entered the Malaysian market, is a global hypermarket operator. He added that Tesco recently signed agreements with about 20 small Malaysian companies to become suppliers for its hypermarkets globally.

From http://thestar.com.my/ 09/09/2002

Laos: ADB To Support Northern Development Planning Project

The Asian Development Bank (ADB) will grant US$ 700,000 for a planning project for the development of nine provinces in northern Laos. An aide memoire to this grant was signed at the Committee for Planning and Co-operation on September 13 by Vice President of the Committee Mrs Khempheng Pholsena, and head of the ADB team Gil Hong Kim.The grant will be spent on preparations for making a strategic plan for the development of the northern region with a focus on comprehensive and balanced development in the area. The project will operate for 17 months, which will start in November 2002 and end in March 2004. The project cost amounts to US$ 825,000. The Lao Government will make a contribution of US$ 125,000 to this cost.

From http://www.kplnet.net/ 09/16/2002

Myanmar Strives for Industrial Advancement

Myanmar has been working hard for the systematic advancement of its industrial sector by harmoniously developing the state, cooperative and private sectors in this regard. The government, in addition to its own state sector, has rendered assistance for the progress of the cooperative and the private sectors in the development of heavy, medium and small industries. Since 1995, Myanmar has established 18 industrial zones in nine states and divisions, including six in Yangon, for the development of the private sector where a total of 4,496 factories and plants including heavy industry, medium-sized and small ones have gone into production there. These industrial zones are producing agricultural machinery, import-substitutes, consumers goods and foodstuff. To promote industrial development and to gradually transform an agricultural country into an agro-based industrial one, Myanmar formed the Industrial Development Central Committee in May 1999 and laid down a 30-year long-term industrial development plan from 2001-02 to 2030-31. According to official statistics, there was a total of more than 57,000 industrial businesses in Myanmar as of 2000-01, an increase of over 15,000 from 1988-89. The increase of the number of factories has offered more job opportunities in the country with the number of employees in the three sectors of state, cooperative and private rising to over 25 million from 18 million in 1988. The figures also show that the net value of goods produced in the industrial sector increased up to 10,204 million kyats (about 14.5 million US dollars) in 2000-01, up 149.24 percent from 1988-89.

From Xinhua News Agency 09/13/2002

Malaysia: Getting Set for Challenges in Global Economy

MALAYSIA has become a highly desirable place to do business as the country understands the reality that the rule of law is the prerequisite of a sound financial services sector, Barclays of United Kingdom chief executive officer for business banking Roger Davis said. Speaking at the Asian Global Leadership Forum in Pangkor Laut, Perak, yesterday, he said banking systems played a vital role in the public governance of a nation as they were instruments of public policies in the preservation and creation of wealth. In fact, he said, this was an attitude so ingrained in the national psyche of most countries that many people, including bank shareholders, viewed their ownership of banks driven as much from their citizenship as from their pension fund. On the other hand, Davis said some public officials seemed to think that their national banks ought to behave like any other government department. "There appears to be the impression that banks should be direct instruments to correct any social wrong or indeed score a few political points, irrespective of the obligations that management has to its shareholders and customers," he said in his paper "How Banks and Financial Institutions Can Contribute To A More Stable, Safer World - To Economic Development - To Closing The Wealth Gap." At times, Davis said, in some jurisdictions, there did not even seem to be the realisation that the rule of law was the most important factor towards establishing a sound financial services sector. "Contracts are seen more as conveniences rather than binding obligations. Those jurisdiction that fail to grasp this simple truth (that rule of law is the first requisite of a sound financial services sector) will have no one to blame but themselves for the consequences)," he said. Davis said some bankers seemed to be unaware that the impact of their actions might extend beyond the boardroom. This remote control management blinds banks to the reality that they are dealing with real people's lives, he said. "For example, the imposed 'structural correction' of closing down a major employer means lost livelihoods and shattered dreams," he said. He believes that while banks should not perpetually finance money-losing propositions, they had an obligation to understand and take into account local conditions and the full consequences of their actions - a practice that, he said, was not just a good policy but was also a good business. "I ran Barclays' operations in Asia Pacific for five years. It quickly became apparent to me that the greatest challenge was to understand changing cultures and practices in all their hue and subtlety. "The only way to meet this challenge was to have both feet planted firmly on the ground," he said. Davis also felt that there was a need to develop effective bilateral partnerships between banks and governments to address the more complex and demanding challenges brought about by this new century. "All too often, we seem to be battling with one another when our customers and voters expect us to co-operate. Our experiences at Barclays, when we have worked with government, have always been productive. So, let us cooperate rather than compete," he said. Also at the forum was Singapore Trade and Industry Minister George Yeo who spoke about the economic integration of East Asia and the result of this fast-growing intra-regional web of trade and investments. Presenting a paper on "Snapshots of the Global Economy - The Return of The Dragon," Yeo said the integration was fuelled by fierce competition not only in labour-intensive industries like textiles but also in leading technology-intensive industries such as wafer fabs. He said in East Asia, China had become a major member of an increasingly integrated East Asian community, noting that China's growth had forced East Asian countries to make major adjustments in their economic policies. "At some point in the not-too-distant future, global economic policy coordination must include China and it will be necessary to expand the G8 to G9," Yeo added. (by Mokhtar Hanafiah)

From http://thestar.com.my/ 09/08/2002

Indonesia: Government Provides 25% Discount for SME Debts

Small and medium-scale enterprises (SMEs) with bad debts owed to the banking sector can enjoy a 25 percent debt reduction if they make a one-time cash settlement, said State Minister of Cooperatives and Small and Medium Enterprises H. Alimarwan Hanan. He said that the deal had been agreed on by Minister of Finance Boediono and State Minister of State Enterprises Laksamana Sukardi. "It's been decided to grant a 25 percent haircut to SMEs who can afford to repay their debts in cash. "But for those who cannot, they have two years to make payments at an interest rate of 9 percent per year," Ali said after a meeting with Vice President Hamzah Haz. After years of political wrangling, President Megawati Soekarnoputri signed a special decree on the restructuring of SME debts. The decree does not stipulate the size of the haircut facility to be given to SMEs, but instead it assigned the two above ministers to make the decision. The SMEs owe some Rp 39 trillion (about US$4.3 billion) in bad debts to the banking sector and to the Indonesian Bank Restructuring Agency (IBRA), which took over a huge amount of non-performing loans from the banking industry during the late 1990s financial crisis. The offices of the State Minister of Cooperatives and SMES, with strong backing from Hamzah, initially proposed a haircut facility of more than 50 percent to help revive the SMEs. But the proposal was strongly opposed by the banking industry, which is still struggling to survive the banking crisis. Reports said that the bankers made their lobby through the economics ministers. Bankers argued that if they were forced to give too lenient debt-restructuring terms to SMEs, weak banks might suffer from more serious bleeding. In addition, bankers said a huge debt haircut facility would also be seen as unfair to other SMEs, which have been conscientious in repaying their debts. Experts said that by doing this, those who had not abandoned their obligation to repay their debts would probably ask for the same discount, which would eventually further threaten the bank's liquidity. Joining the controversy were also those banks that said the debts to be restructured were not entirely owed by SMEs. They said some were debts comprising consumer loans owed by the wealthy during the lending spree of the 1997 pre-crisis period. To date, the government categorizes the debts belonging to SMEs by the definition that they are owed by individuals and amounting to less than Rp 5 billion. Total debts, most of which are under the control of IBRA, amount to Rp 31.6 trillion. Presidential Decree No. 56/2002 on the restructuring of SMEs will serve as the legal basis for the restructuring of those debts, which are owed by 414,700 SMEs. It is widely recognized that debt restructuring will be crucial for SMEs to seek working capital to expand their businesses, which is critical given its ability to absorb a huge part of the work force.

From http://www.thejakartapost.com/ 09/03/2002

New IT Company Formed to Market RP's E-services

A group of local and international businessmen have formed Philippine IT Offshore Network (PITON) to market Philippine e-services globally. The group's main objective is to bridge the local supply of IT human resources with international demand for offshore information technology outsourcing services. PITON is the first, largest and premier IT offshore vendor network and consulting firm in the Philippines. It currently represents 20 Philippine-based, leading IT service providers including domestic and international software development firms, multimedia and web design companies, and contact centers. Its vendors' clients include Fortune 500 corporations such as Citibank, P&G, Microsoft, Epson, Canon, Fluor-Daniel, Nokia, and Schlumberger. Ralf Ellspermann, PITON's chief executive officer, said the time to market the offshore capabilities of the country's best performing local and multinational IT vendors has never been better. "The continuing economic downturn is forcing more foreign-based corporations to consider offshore outsourcing as the best way to significantly reduce cost without sacrificing quality. With geopolitical tensions on the rise in other parts of the world, the Philippines' position as one of the world's foremost offshore outsourcing destinations has been strengthened." Respected IT research organizations such as Gartner, Giga Information Group and Software Outsourcing Research (SOR) rank the Philippines as one of the world's top four offshore outsourcing destinations for application development and call center services. The Giga Information Group has said the country is the world's best offshore alternative to India and has the potential of becoming the call center hub of Asia. However, there is an immense need to concentrate on marketing and promoting what the Philippines has to offer since the offshore IT outsourcing market in the country presently lacks visibility, according to Ellspermann. "There is a clamor for a local organization - such as the National Association of Software and Services Companies (NASSCOM) in India - that will spearhead initiatives and activities that will promote the Philippines' IT outsourcing capabilities and advantages globally," Ellspermann said. "It is quite unfortunate that only a very few people in this country, and more importantly, corporate decision makers abroad, seem to be aware of this fact. On the other hand, it enables us to carry this message to our potential clients in different regions of the world," Ellspermann said. PITON is taking a significant initial step toward better global awareness in a bid to make the Philippines' IT outsourcing services more competitive in the IT offshore marketplace. "We are making a serious effort to promote Philippine IT advantages and offerings, especially call center services, which are considered the fastest growing IT segment in the country," Ellspermann said. "Service providers are sprouting up almost on a monthly basis as foreign companies enter the Philippines to set up offshore operations, giving prospective clients a myriad of choices," he explained. "Potential outsourcers who are unaware of the offshore IT outsourcing market in the Philippines can be spared the arduous vendor identification and selection process by tapping PITON's extensive knowledge of the market and vendors." Ellspermann noted that it is crucial that prospective clients are aware of options available to them in the market. "Our vendor networking and consulting practices are designed to help our clients practically eliminate all offshore outsourcing-related risk while maximizing the benefits. We achieve this due to our hands on approach and an unmatched knowledge of the Philippine offshore IT and call center markets as well as the key service providers." PITON enables clients to secure the offshore IT outsourcing services that they require at the most competitive price. Being based in the Philippines and employing a rigorous vendor selection criteria, PITON is best positioned to advise international clients of the most qualified service provider to meet specialized requirements. PITON is chaired by PLDT chairman Antonio Cojuangco, with Bank of Commerce director Ramon Cojuangco as executive vice president and chief financial officer, and Soluziona Philippines president Jose Guingona as an executive director. (by Edu H. Lopez)

From http://www.mb.com.ph/ 09/12/2002

Philippines: BOC Set to Implement Full Computerization Program

The Bureau of Customs (BoC) is set to implement the rules and regulations on export and import procedures to hasten its implementation of the e-Commerce law following a go-signal from the Department of Justice (DoJ). A legal opinion on the issue was issued last week by Justice Secretary Hernando B. Perez in response to a request earlier made by Trade Secretary Mar Roxas for a legal opinion on whether or not the Bureau of Customs (BoC) has the power to change its export and import processing system from the old, manual way to electronics system. Roxas had informed Perez that a task force under the DTI has been assigned to assist the customs bureau into shifting to electronics export-import procedures. But the BoC was hesitant to wire its procedures on fears that the provisions of the E-commerce law deviate from the Tariff and Customs Code. This hesitance has stalled the computerization of import and export transactions to the detriment of the country's international trade. In his legal opinion on the issue, Perez categorically said, "we hold that government agencies, such as the Bureau of Customs, may promulgate rules and regulations to implement the Electronic Commerce Act." Perez further explained that the BoC can do it even if the new rules will deviate from its existing rules and procedures for as long as the new rules will conform with the intent of the e-commerce law. Under the law passed last year, all government agencies have been compelled to adopt electronics systems in their operations and in transactions with the private sector. What has been delegated to government agencies under the electronics law is the power to issue supplementary legislative regulation, Perez explained. "Not only was the job to be accomplished and the entity to do it clearly described and identified; the scope of the authority granted was also specifically determined," the justice head concluded in legal opinion number 61 issued this year. With the Justice opinion, it was seen that all legal impediments to the full computerization of the BoC's operations have been hurdled. The business community has long been pressing government to modernize its customs operations. When fully in use, electronics operations of customs procedures are expected to drastically cut the red tape in that agency of government and reduce to a minimum corruption in the bureau. (by Edu H. Lopez)

From http://www.mb.com.ph/ 09/07/2002

Bayantrade Chief Asserts E-marketplace is Fastest Growing Sector in E-commerce

Independent research indicates the share of e-commerce accounted for by e-marketplaces will grow to 25 percent globally by 2004 from just 1.4 percent in 2000. BayanTrade vice chairman and CEO Carol E. Carreon quoted Giga Information Group, that e-marketplaces will be the fastest growing component of e-commerce over the next two years. That growth will come at the expense of private EDI (electronic data interchange) and EDI VANs (value added networks)," Ms. Carreon said. BayanTrade provides a public e-marketplace, where many companies can bid for or procure through online catalogue products and services. Its horizontal facility allows companies from any industry to purchase what are called indirect products such as office supplies, electronic equipment and computers, and professional services. BayanTrade's vertical facilities allow companies in specific industries to purchase direct products and services that are unique to their industries. BayanTrade operates verticals for four industries: construction and real estate, electronics and semiconductors, power and utilities, and the financial sectors. Carreon was reacting to a recent report arguing that the e-marketplace model is flawed. She believes that BayanTrade is and will continue to define e-commerce in the Philippines. The report suggested that competitors can't successfully operate an e-marketplace together, an assertion Carreon said isn't backed up by the reality. "In fact, the consortium model is the most successful e-commerce model globally. There are a number of reasons for this. First, is the consortium's capacity to attract large numbers of sellers. For example, our founding consortium together with our vertical accounts for 40 percent of the total Philippine purchase spend. That's a powerful reason for sellers to join BayanTrade. "Next, the benefits of economies of scale with respect to developing infrastructure and services are substantial and long term, and most companies have other urgent priorities competing for capital, people, and time. Third, e-marketplaces provide an excellent venue for collaboration among competitors, an accepted and growing management practice across industries. Competition has been around for decades, it's growing, and it's not going away," Carreon explained. "Finally, e-marketplace communities are an important source of information on procurement and commodity trends, which can be observed as they develop by the online community, enhancing their capacity to respond to shifts in the market," Carreon said. She said that rapid growth in value pass through (VPT) - the value of transactions completed on the e-marketplace - is another "hard" rather than "speculative" indicator of the rapid take up of e-commerce in the Philippines, and the contribution of public e-marketplaces. "We have reached R5.0 billion in value pass through (VPT) in the first eight months of 2002, or 114 percent of VPT for the whole of 2001. The number of e-Bidding events is already 132 percent of 2002, and e-Catalogue Purchasing is 172 percent. So we're growing at better than 100 percent a year, and adding four to five verticals a year, too." BayanTrade president and COO Dante Briones said that, "one reason our model is working is that 99 percent of the trading relationships on BayanTrade is private, or between one buyer and one or more sellers. In fact, we are offering a hosted Private Exchange solution companies that can leverage without the huge capital outlay dedicated private exchanges require. There is a huge cost associated with putting up dedicated private exchanges and companies are compelled to manage their investments based on real returns, not false promises. Our model provides the fastest, most cost-efficient alternative for leveraging the many benefits of e-commerce." Carreon believes there is a place for dedicated private exchanges. "Very large companies will use private exchanges because large companies and multinationals have the economy of scale for that to make sense. But that won't make sense for most companies, especially in the Philippines where 80 percent of all firms are small- and medium-scale enterprises. And those that do have private exchanges - which include four of our consortium members - still use public e-marketplaces for the visibility of suppliers we are able to offer. "For sellers, they want a larger pie, a bigger universe to sell to. You can't get that with a private exchange," Carreon explained. So far, BayanTrade has been able to provide consistent savings to buyers, validating the role of e-marketplaces. Carreon said that savings on transactions conducted on BayanTrade consistently average around 12 percent, and go as high as 70 percent. "BayanTrade makes an important contribution to increase cost efficiency," she said, "but our buyers and sellers also realize other benefits, such as lower overhead as a result of enhanced procurement processes, and higher productivity. That leads to higher profits, and happy shareholders." Contrary to reports that an e-marketplace can't integrate its operations with the ERP systems of buyers and sellers, Carreon noted that BayanTrade has performed such integration services across two separate ERP platforms.(by By Edu H. Lopez)

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

Administrative Tax Measures Lag

Slow enforcement of the administrative reform measures designed to increase the collection performances of the bureaus of Internal Revenue and Customs has been partly blamed for the continued shortfall in government revenue performance. Finance Secretary Jose Isidro N. Camacho said several administrative reforms measures have been instituted by both agencies, but, so far, these measures had infused only some P2.66 billion in additional revenues. These measures include a relief system for value-added tax (VAT) to enable the bureau to verify taxpayers' compliance with VAT, an industry benchmarking to ensure that firms found remitting lower than the benchmarks would be automatically audited. Tthe BoC traced its shortfall in revenues to the appreciation of the peso against the US dollar as well as lower importation of dutiable materials. Against the average foreign exchange rate of P52, the value of the peso vis-vis the dollar has gone up to an average of P50.80. This caused the BoC's performance to fell by P1.4 billion. Camacho said BoC should have put in an additional P5 billion in collection from reforms measures. Instead, BoC posted a P11.2 billion shortfall, Camacho noted. This is despite BoC pursuing monitoring the levels of assessment of the transaction value system, the re-engineering of the warehousing system, the enhancement and computerization of monitoring, and tighter policies on collection of duties and taxes on garments raw materials. Camacho observed that the BIR has not achieved even one-fourth of the P16 billion projected to be collected through identified administrative measures. This brought BIR's revenue collection slippage to hit P41.4 billion as of the first seven months of the year. BIR collections represent 80 percent of the total earnings of the national government, while BoC pours-in 10 percent. As a consequence of these lackluster performance and despite the belt-tightening measure the department of budget and management, the national government's budget deficit has ballooned to P133.1 billion, already overshooting its full-year target ceiling of P130 billion. But Camacho noticed that the intensified monitoring of the BIR on the payment of the 10 percent VAT is bearing fruits, noting a 10.4 percent improvement in the BIR collection arising from this administrative measure. This, he said, partly softened up the sluggish performance in other areas caused by low interest rates environment. According to Camacho, the low interest rates regime dented the performance of the BIR since bank's tax payment on interest income, which accounts for 25 percent of its collection, has dropped. (by Fil C. Sionil)

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

Penang Unveils K-ICT Blueprint

PENANG: Penang has become the first state to unveil the Knowledge-Information Communications Technology (K-ICT) blueprint to transform the state into an in "intelligent land" by 2010. It has drawn up five "strategic initiatives" under the blueprint to attain the "intelligent land" goal after realising that it could no longer compete with others on the basis of land, labour and capital. Chief Minister Tan Sri Dr Koh Tsu Koon announced the Penang K-ICT blueprint towards Penang i-land K-Economy at the monthly gathering of civil servants at Dewan Tunku, Komtar yesterday. Also present were Deputy Chief Minister Datuk Dr Hilmi Yahaya, State Secretary Datuk Khalid Ramli, and Energy, Communications and Multimedia Ministry parliamentary secretary Chia Kwang Chye. Dr Koh said the strategic initiatives would focus on connectivity, k-worker development, e-economy, digital equity and electronic good governance. "We will appeal to telecommunications companies to help in ensuring Penang becomes a fully connected state by 2005. The current level is about 85%'' he said. On digital divide, he said k-community centres (computer centres) would be set up in all villages within the next five years, beginning with large villages. Dr Koh said the electronic good governance would ensure that the "entire state government would be re-invented with its structure and mindset transformed through a fully networked e-government that is client-focused, efficient and transparent." The k-worker development would focus on training of manpower while the e-economy would focus on higher value-added business and the usage of e-business and e-commerce in all sectors. Dr Koh said the connectivity steering committee would be co-chaired by Chia and state executive councillor Datuk Koay Kar Huah; and the k-worker development by state executive councillor Datuk Dr Toh Kin Woon and Universiti Sains Malaysia School of Computer Sciences dean Prof Zahrain Yusoff. The e-good governance steering committee would be co-chaired by Khalid and Mampu director-general Datuk Dr Muhammad Rais Abdul Karim; e-economy by Penang Development Corporation general manager Datuk Siti Balkish Sharif and Datuk S.H. Wong, who is vice-president and general manager of Worldwide Assembly Test Manufacturing Intel Corp. The digital equity committee will be headed by state executive councillor Datuk Jahara Hamid. (by K. Suthakar)

From http://thestar.com.my/ 09/19/2002

EC Pledges $98m for Development Efforts

HA NOI - The European Commission has vowed to provide 100 million euros (US$98 million) for sustainable development in Viet Nam over the next two years. The European Commission's three-year National Indicators Programme (NIP) has a budget of 101 million euros covers a range of initiatives designed to reduce poverty in an economically, socially and environmentally sustainable manner. The NIP will support integrated development in the northern highlands; and help reform education, vocational training, public administration, institutions, the private sector and promote good governance. The programme also aims to help the country integrate into the global economy and regional economic groupings. This new programme reflects Vietnamese priorities and is fully in keeping with the Government's Comprehensive Poverty Reduction and Growth Strategy. A memorandum on the EC aid package was signed in Ha Noi yesterday by MPI Minister Vo Hong Phuc, and EC Delegation Head Ambassador Frederic Baron. The EC's aid budget of about 34 million euros each year for Viet Nam is bolstered by several million euros' worth of initiatives financed under the framework of regional programmes, making it one of the country's largest donors.

From http://vietnamnews.vnagency.com.vn/ 09/23/2002

P33.7-B Projects Okd by President

President Gloria Macapagal Arroyo has approved 12 new major projects worth P33.7 billion designed to promote agricultural productivity, intensify the delivery of services, notably in health and education, and improve infrastructure in Metro Manila and the countryside. The President, who chairs the National Economic and Development Authority (NEDA), said that on top of these major projects is the P10.80-billion Agno River Integrated Irrigation Project which is expected to provide year-round water supply to irrigate some 70,800 hectares and raise the output of rice and other crops in Pangasinan and Tarlac. The President said the project will also make farming highly competitive and profitable and increase per capita income, upgrade the living standards of the people, and create jobs in Central Luzon. Covered in the project are the repair of the San Roque diversion weir and intake; construction of the reregulating pond with a capacity of 4.6 million cubic meters; construction of a canal at the right bank of the Agno River to supply existing service areas of the Agno River Irrigation System (ARIS): and construction of a siphon across the Agno River that will link the main canal of lower ARIS. The President also approved the P4.52-billion Pasig-Marikina Channel Improvement Project Phase I, which aims to ease the flooding caused by the overflowing of the Pasig-Marikina River. Flooding has resulted in severe damage to properties and infrastructure, she said, noting that the project will lessen the overflowing of Pasig River at times of heavy discharge by increasing the river's conveyance capacity. She said the project will be elevated with the erection of some 18.2 kilometers of parapet wall and 17.6 kilometers of revetment walls, and the dredging and excavation of about 7,000 cubic meters of riverbed deposits from the Del Pan Bridge to the Napindin Channel. The project will further include the repair of about ten kilometers of damaged stretches of river walls to prevent erosion and the collapse of riverbanks, she added. Other projects also approved by the President were the P3.4-billion Agrarian Reform Community Development Project Phase II, the P2.53-billion Autonomous Region in Muslim Mindanao Social Fund for Peace Development, the P1.52-billion General Santos Fishing Port Complex Expansion/Improvement Project; the P1.52-billion Bago River Irrigation System Rehabilitation and Improvement Project; the P610-million 26th Tranche Increased Food Production Program; The P3.4-billion Upgrading the Inter-Urban Highway System Project; the P3.23-billion Valenzuela-Obando-Meycauyan Area Drainage System Improvement and Related Works; the P900-million Education Facilities Improvement Program Phase VI; the P450-million Philippine Follow-Up Measles Elimination Campaign; and the P825-million Upgrading of Essential Medical Equipment for Strategic Government Referral Hospitals in the Southern Mindanao. (by Ferdie J. Maglalang)

From http://www.mb.com.ph/ 09/20/2002

Singapore Telecom Plans $1.6B Cable

Singapore Telecommunications Ltd. and 12 partners plan to build a $1.6 billion underwater cable network linking Southeast Asia, the Middle East and Western Europe, the company said Wednesday. SingTel spokesman Francis Huan said the proposed cable would link 12 countries: Bangladesh, Egypt, France, India, Indonesia, Italy, Malaysia, Pakistan, Saudi Arabia, Singapore, Sri Lanka and the United Arab Emirates. "Though the current market situation might not seem conducive to embark on this project, this is the opportune time for us to gather like-minded partners to plan and build a network to ease the expected bandwidth bottleneck between Asia and Europe," said Lim Shyong, a SingTel vice president. The other partners in the new consortium are Bangladesh Telegraph and Telephone Board, Bharti Telesonic of India, Emirates Telecommunications Corp. of United Arab Emirates, France Telecom, Pakistan Telecommunications Co., PT Indosat of Indonesia, Saudi Telecom of Saudi Arabia, Srilanka Telecom Ltd. Sri Lanka, Telecom Egypt, Telecom Italia SpA, Telekom Malaysia Bhd., and Videsh Sanchar Nigam Ltd. of India.

From http://www.washingtonpost.com/ 09/04/2002

S'pore Start-up Pips Giants like Microsoft

A HOME-GROWN software company has pipped behemoths like Microsoft to become the first in the world to clear a major hurdle in the race to create a common e-business language. The upstart software development company GridNode earned this distinction after its software underwent extremely rigorous testing, including passing 203 independent tests in a single sitting. The tests were set by RosettaNet, a non-profit consortium of more than 450 information technology, electronic components and semiconductor manufacturing companies with over US$1 trillion (S$1.78 trillion) in annual revenue working to create and implement industry-wide, e-business standards. Calling GridNode's coup a tremendous accomplishment, RosettaNet's chief Jennifer Hamilton said: 'Software compliance is a critical first step in achieving interoperability across the entire trading network.' On how it managed to beat the big boys, GridNode's chief executive officer Leow Chee Tong told The Straits Times: 'Being small, we're mobile and agile. We can move fast and catch up fast.' When contacted, an Infocommm Development Authority of Singapore spokesman said: 'GridNode is one of the earliest Singapore companies to use RosettaNet language in developing a product to assist companies in their online communication. 'Its certification of compliance with RosettaNet specifications demonstrates Singapore infocomm companies' capabilities to progress rapidly with market trends.' GridNode, which was formed in 2000, has raised more than US$8 million in investments and has over 60 employees, as well as subsidiaries in Taiwan, Japan and the United States. It creates software that makes it cheaper and easier for businesses to do e-commerce with each other, and its customers include large enterprises like Seagate Singapore. Said Mr Leow: 'We definitely feel proud about getting the recognition, and for putting a Singapore software company on the global map.' Microsoft, which sits on the RosettaNet board, said it is working closely with the organisation to get the compliance badge. Mr Albert Chew, Solutions Manager of Microsoft Asia Pacific, said that GridNode's compliance was for passing one of 77 tests on business processes - the only one so far that RosettaNet has made available for testing. 'We're not worried. Being compliant with one process is only a minor milestone, and we intend to go for a larger number of them before making any announcements,' he said

From http://straitstimes.asia1.com.sg/ 09/23/2002

UN Reps Declare Viet Nam Is on Right Development Track

HA NOI - Viet Nam is on the right track to development and integration and will receive more backing from international organisations in its efforts for World Trade Organisation membership, representatives of UNCTAD and UNDP have promised. Tran Van Thinh, ambassador, and Reinaldo Figueredo, special advisor to the UN Conference on Trade and Development/UN Development Programme, made these observations on Wednesday while meeting with Deputy Prime Minister Vu Khoan. The two officials also affirmed that UNCTAD/UNDP would strengthen its co-operation with Viet Nam when the nation officially accedes to WTO. Khoan greatly appreciated UNCTAD/UNDP's co-operation with Vietnamese authorities and briefed the two representatives about the country's priorities in human resource development and economic restructuring in line with the global trend of integration. The Deputy Prime Minister also dwelled on Viet Nam's new efforts in battling hunger and poverty and building a more comprehensive legal system. He expected greater support from UNCTAD/UNDP in future, given the many challenges awaiting Viet Nam once the country attained WTO membership.

From http://vietnamnews.vnagency.com.vn/ 09/05/2002

Gov't Pounds Internet Users to Value Education to Fend Off Cyber Attacks

The most difficult barrier for an Internet attack to breach is an educated user, the National Computer Center reminds. Many Filipinos surf the Internet, some even dare to shop and bank online without really considering that if we can get out to the world from our computers, the world can also get in, a statement for NCC says. Internet attacks can take several forms. Viruses can infect and destroy your computer and prevent you from accessing information on the Internet. Hackers can gain access to systems and information that should remain protected. Be one of those educated users by attending the "Once a Month sa NCC" lecture slated this month. Titled "Internet Security: Issues and Concerns", the event will be on September 20 at the NCC building in UP Diliman, Quezon City. Anybody who thinks lectures on the Internet security is a not so relevant topic had better think it over. The free lecture is open to all government ICT workers, ICT enthusiasts and members of the academe. Slots, however are limited so attendance must be confirmed. In a related development, released at a time the world observed the first anniversary of the Twin Tower attack in New York on September 11, a US Embassy news report says: "A new survey of information security specialists at organizations around the world finds that despite high level awareness the risk of computer attacks even before the events of last September 11th - almost one-third of the companies surveyed says they may still not be adequately equipped to deal with an attack on the computer networks by cyberterrorism." Conducted jointly by the Internet Security Alliance (ISAlliance), the National Association of Manufacturers (NAM) and Red Siren Technologies Inc., the survey asked respondents to computer companies' attitudes regarding information security issues, both today and prior to last year's terrorist attacks on the world Trade Center and the Pentagon. The survey found that: * 30 percent of respondents said their firms do not have adequate plans for dealing with information security and cybeterrorism issues, down from 39 percent last year; * 33 percent said information securities is not a visible priority at the executive on board level to the their organizations; * 39 percent said information security plans are not regularly communicated to be reviewed by top corporate executive; yet 88 percent said their companies recognize information security as an issue essential to the survivability of their business, up from 82 percent prior to the attacks. The survey was conducted from August 12-23, targeting corporate firms from throughout North Americas, Europe, the Middle East and Pacific Rim regions. "Based on these result, our challenge is to educate companies about the need for taking added preventative steps now, as well as the hard-nosed reality that this situation will not change. Enterprises of all sizes have remained active and vigilant on an ongoing basis if they are going to protect against cyberattacks on the systems," says Doug Goodall, Red Siren president. "Information security needs to be a top priority for any successful business, from the executive level to the IT manager," says Dave McCurdy, ISAlliance's executive director. "Businesses rely more on the Internet and e-commerce than ever before and confronting new and emerging cyber-threats without sound IT security practices is not sound corporate management." The ISAlliance is the publisher of "Common Sense Guide for Senior Managers: Top Ten Recommended Information Security Practices." Forty-eight percent of respondents said that the September 2001 attacks had made them "more concerned" about cyberterrorism and its impact on the organizations; 49 percent reported no change in attitude at it. (by Edison D. Ong)

From http://www.mb.com.ph/ 09/16/2002

TOP

 
Bangalore IT.Com Expected to Garner Business Worth $300 Million

The days when the country used to host a plethora of IT exhibitions may be history now, but there are still a couple of shows that command enough national, and more importantly, international recognition. One is the annual Nasscom jamboree that takes place in Mumbai, while the other is the Bangalore IT.com, now considered a showcase event for India's Silicon Valley. The 2002 edition, to be held between 28 October and 1 November would highlight three sectors-BPO, e-governance and banking & finance, reveals Vivek Kulkarni, IT secretary, Karnataka. With more than 330 sponsors and companies from different countries like the US, UK, Germany, Sri Lanka, Korea, Japan, Belgium and Taiwan confirming participation, Kulkarni feels that this would be Asia's largest ICT event. Even different Indian states like Tamil Nadu, Andhra Pradesh, Chandigarh, West Bengal and Haryana are likely to have a significant presence at the exhibition. Kulkarni expects business worth more than $300 million to be generated from the event. Keeping in mind the vast potential that exists in the BPO sector, IT.com 2002 would be hosting a BPO summit; an interactive session on BPO skills besides a short-term training course on bioinformatics. The session on BPO skills would allow each visitor to apply for a 15-minute test to check out his skills as a call centre agent. The e-governance thrust would provide a platform where IT-savvy state governments could discuss implementation strategies with other states. The focus on the banking and finance segment would see IT companies demonstrating their products to the banks, while the banks would in turn demonstrate the usage of these products to the public. This, Kulkarni feels, would bring the IT companies in direct interactive contact with the general masses for the first time in an IT exhibition.

From http://www.express-computer.com/ 09/16/2002

Regional Cooperation Needed to Develop Water Resources: PM

Prime Minister Khaleda Zia yesterday said unilateral intervention at the upper riparian region in the flows of common rivers worsens poverty situation of lower-riparian country like Bangladesh because water is very important for an agrarian economy. Water is also an important component of poverty alleviation plan, she said as a donor-sponsored international meet began here to work out an appropriate water-management strategy. Khaleda Zia told the opening session that a National Water Management Plan is under consideration for approval by her government for proper development of water resources. But, the PM noted, as a lower-riparian country Bangladesh alone cannot develop its water resources. "So we always attach importance to regional co-operation." She said Bangladesh had been afflicted by poverty for some centuries. "The definition of poverty has now changed. Only having two square meals a day doesn't mean poverty alleviation," she said inaugurating the international workshop. In her opening speech at the Asia-Pacific Consultation Workshop on Water and Poverty, the prime minister explained that matters like education, health and supply of safe drinking water are now getting equal importance along with ensuring two meals. Hoping that experiences to be gained through interaction between local and foreign water experts in the workshop would help in developing the country's water management and formulating a water policy, Khaleda urged the local experts to give emphasis on evolving, developing and applying less-expensive homespun technologies. She discouraged use of expensive technology for resolving water-management problem. Justifying her suggestion the PM said many water-related problems could be solved through indigenous know-how and commoners take that course indeed. Water Resources Planning Organisation (WARPO), a government institution, and BRAC has organised the five- day workshop at the Bangladesh-China Friendship Conference Centre. The Water Resources Ministry and the Asian Development Bank jointly sponsored the workshop supported by the Netherlands and Danish governments. round 300 water specialists are taking part in the workshop -- some 150 of them from foreign countries and international organisations. The countries include host Bangladesh, India, Nepal, Sri Lanka, Pakistan, Japan and Singapore. Water Resources Minister LK Siddiqui, State Minister for Water Resources Goutam Chakravarty, ADB vice-president Myoung HO Shin, BRAC advisor Faruq A Chowdhury and the secretary for Water Resources Ministry also spoke at the opening session. The prime minister observed that development of agrarian Bangladesh largely depends on ensuring adequate supply of water during necessity, control of floods and erosion, conservation of water and planned utilisation of water resources. These matters are also very important in poverty reduction. For this reason, she recalled, Shaheed President Ziaur Rahman in 1978 initiated programmes for rehabilitation of landless people through distribution of "khas" land among them through implementation of Land Reclamation Project and Delta Development Project. The prime minister said one of the significant aspects of poverty reduction strategy paper (PRSP) prepared by her government is proper utilisation of water resources, supply of safe water for vast rural and urban population, pollution control and planned investment for the development of water resources.

From http://www.dailystarnews.com/ 09/23/2002

Bhutan's IT Vision

The Bhutan IT master plan, which covers all major national IT projects in the 9th five year plan, identifies seven key areas of focus and action. They are - infrastructure development, institutional arrangements, human resources and training, information management and content development, regulations, guidelines, and legislation, public awareness and IT development in the private sector. With Nu. 516.6 million or 55 percent of the total budget allocated to infrastructure development, the plan underscores infrastructure as a prerequisite for development of IT. To improve the guidance and coordination of IT activities, a new ministry of communications and information technology will be established. The DIT will be strengthened with separate research, application, HRD and policy, legislative and regulatory sections. The government will enact an IT Act, which will encompass legislation against computer crimes, indecent and illegal materials and other IT related issues. Legislation on digital signatures will also be enacted to pave the way for electronic correspondence. As one of the first steps towards e-governance, LAN will be installed in all government agencies in Thimphu and the dzongkhag administrations by the middle of the 9th plan. A All ministries and government agencies in the capital will be connected through fibre-optic cables. For geog administrations, offices having access to electricity and telephones will be provided with dial-up Internet connection. By the end of the ninth five-year plan, a quarter of all geog administrations will have dial-up links. Whenever possible, IT training shall be conducted within the country. To meet the immediate demand of IT workforce, the government will subsidize intensive short-term courses in IT related subjects for school-leavers. An IT HRD master plan will be developed, which will form the basis for devising IT training programs and placements of IT personnel. IT job profiles will match the skills of IT professionals. A web portal providing one-stop access to all government services and information will be set up. A new nation-wide citizenship database system will be developed. The government will work with application manufacturers to ensure that applications most commonly used in Bhutan are compatible with Dzongkha Windows operating system. The use of Dzongkha on the Internet will be encouraged to ensure the widest possible dissemination of information. Public Internet access points will be set up in all post offices around the country. Private IT entrepreneurs will be encouraged to produce software for export and the government will promote the introduction of e-business and e-commerce.

From http://www.kuenselonline.com/ 09/13/2002

India Still Ahead of China in IT

New Delhi, If international ranking on parameters like network and e-commerce readiness are any indication, the Chinese threat to India has yet to become real. While India ranks 54 on the networked readiness index, a measure of the preparedness of nations for the networked world, China ranks 64.The index has been put together by the Center for International Development at Harvard University, and for the first time forms a part of the Global Information Technology Report. The report, released by the World Economic Forum, assesses the capacity of 75 countries to exploit the opportunities offered by the IT, communications and technology (ICT) sector. Despite the better information infrastructure, where China ranks 55th compared to India at 65, the dragon trails far behind India in software, hardware and support. In this area, China ranks as low as 71 while India is at 34. In fact, China's software exports are currently one-thirteenth of India. According to the report, the Chinese government's dual policy towards ICT has been a double-edged sword. On the one hand the Chinese government perceives ICT as a powerful tool for economic development while on the other it is wary of the potentially disruptive social and political impact that can arise out of the unchecked use of technology. Due to this dual policy, while China can boast of a better information infrastructure and access, and a good economic environment, the restrictive attitude about information exchange over the Net has bogged down e-commerce initiatives in the country. While India ranks 29th on e-commerce, China trails behind at 46.On the parameter of software products fitting local needs, India scores high at 26 with China again trailing at 66. This despite the fact that in contrast to India, where most software is destined for exports, China targets the domestic market only. Even in the availability of specialized IT services, India scores over China with the former ranked 11th and the latter 51st.In fact, these findings gel well with the e-readiness study conducted by the Economist Intelligence Unit in cooperation with IBM. Out of the 60 countries covered by the e-readiness study, India ranks 43rd as compared to China which is at 51st position (by Prerna K. Mishra).

From http://www.hindustantimes.com/news/ 09/08/2002

Bangladesh: Int'l Symposium on Population Begins

A two-day international symposium titled 'Population and development challenges in some Asian countries' began in the city yesterday to discuss inadequately addressed issues like poverty, education and health. Jointly organised by the Ministry of Health and Family Welfare and the United Nations Population Fund, the symposium is aimed at facilitating regional policy-makers to share their experiences for better integration of strategies for population management and those for development and poverty reduction in South Asia. The symposium will focus on three areas - 'challenges of demographic transition', 'rethinking population policies' and 'integrating population concerns in poverty reduction strategy'. Health Minister Dr Khandaker Mosharraf Hossain, Health Secretary M Fazlur Rahman, Director of UNFPA Country Support Team, Nepal, Dr Wasim Zaman, and Principal Secretary to the prime minister Dr Kamal Uddin Siddiqui spoke at the inaugural session. Dr Hossein Malek Afzali, deputy minister for health and medical education of Iran, and J V R Prasada Rao, secretary, Ministry of Population Welfare of India, also attended the session. Dr Khandaker Mosharraf Hossain said the size of the poor population in absolute number in all countries in the region continues to grow with the increase in population. "Another revealing feature of these countries is rapidity with which their urban population is growing. This overview clearly shows that the people of this region are engaged in combating the problems arisen out of population growth on one hand and massive threat of poverty owing to lack of income opportunities on the other," he said. Dr Wasim Zaman said, "We have to focus on certain issue like rights of choices for health, particularly contraceptives. But rights cannot be translated into action without resources." "One of the biggest challenges is governance and equity in some of the countries in the region. I urge the donor community to look at Asia, particularly South Asia." Vasantha Kandiah of the United Nations Statistics Division was a guest speaker at the symposium. Delegates from India, Pakistan, Indonesia, Iran, Nepal, Sri Lanka and host Bangladesh are attending the sessions.

From http://www.dailystarnews.com/ 09/23/2002

Certificate Distribution Ceremony of ITCN Asia 2002 Held

KARACHI (PNS): Certificates Distribution Ceremony of ITCN Asia 2002 Exhibition and Conference was held Tuesday at Islamic Chamber of Commerce and Industry (ICCI) Auditorium. Dr. Abdul Hafeez Shailh Minister for Finance & Development Sindh was the Chief Guest of this prestigious event. The Managing Director of PSEB Suhail Shahid was also invited as the Guest of honour. Many other important personalities such as Anis Ahmed, Dr. Khurseed Nizam, Atiq-ur-Rehman from Ecommerce Gateway. Sarmad Ali, Executive Director Jang Group of Newspaper and Nasir Mirza, Office Incharge ICCI were also present at this important ceremony. Dr. Abdul Hafeez Shaikh and Suhail Shahid, president the certificates to the students who worked voluntarily in ITCN Asia 2002. The certificates were also given to the management team of ITCN Asia 2002 and to the representatives of Patterns. PSEB, Sindh IT Board and IBA. Hafeez Shaikh appreciated the extraordinary participation of the students in ITCN Asia 2002. He said that their dedication and willingness is the strength of a prosperous Pakistan in the coming years. Their role in ITCN Asia 2002 was painstaking. Their positive attitude and hard work has not only impressed the local visitors but also the foreign visitors. Dr. Khursheed Nizam said that the significant role of student volunteers was a major factor in the success of ITCN Asia 2002. He also said that it was the courage and enthusiasm of our young generation that presidents themselves as the most capable and willing to do their best to promote Pakistan. ITCN Asia 2002 Exhibition and Conference was organized for the second time in Pakistan from August 10-12, 2002 at Expo Center and Sheraton Hotel, Karachi. Government of Sindh, Ecommerce Gateway, and Commerce Net, Singapore have collaboration for this event to showcase the IT potential of Pakistan and create Business opportunities for the development of It industry and economy.

From http://www.paknews.com/ 09/18/2002

IT Companies Prefer Experience over Youth

NEW DELHI: The average age of employees in technology companies is on the rise. IT companies, which have been known for employing a young workforce through campus recruitments, are now going back to people with experience. In one year, the average age of employees at Infosys Technologies grew by over a year. As on March 31, 2002, it stood at 26.5 years compared to 25 years just a year ago. According to Hema Ravichandar, V-P of human resources, the rise in average age is due to the software giant's preference for experienced people, particularly professionals with domain expertise. Infosys, which has an employee strength of around 11,000 today, hired 1,548 people during the last financial year. The average age of Wipro employees stands at 27 years today, a marked increase from the previous year. Says Joydeep Bose, GM (HR), ''The average age of our employees is growing primarily because we are increasingly hiring professionals with experience. ''Wipro added 919 people in April-June and is recruiting another 2,000 in batches to ensure proper induction of the new recruits. In fact, Vivek Paul, vice-chairman, had indicated that the company would recruit four out of 10 candidates from campuses. Over 1,500 new recruits joined TCS in the first quarter of this financial year and it intends to recruit over 3,000, including experienced professionals in its middle-level management team and trainees. Gerhard Watzinger, CEO of Mascot Systems, feels it is difficult to get people with 5-10 years of experience. ''The skill sets in the areas such as business intelligence, data warehousing and enterprise application integrations are most sought after these days,'' he says. Interestingly, campus recruitments have dropped to 2-16 per cent of the total manpower requirement for the year, according to a recent Nasscom-Hewitt study. These were as high as 60 per cent till three years ago, it pointed out. As the industry matures, the need to have experienced people is being felt increasingly. At the same time, more applicants are accepting offers, with offer acceptances in the ratio of 8:9, according to the study. This ratio used to be 6:8 a couple of years ago. In fact, employee referrals and external consultants emerged as the most common practices in the recruitment of experienced people. Though hiring of more experienced professionals has stepped up, focus on training continues, according to the report. While senior employees get more behavioural training, technical training programmes are more popular at junior levels.

From http://timesofindia.indiatimes.com/ 09/18/2002

IT Capital Cold to Online Bill Payment

BANGALORE: The citizens of India's Silicon capital have still not warmed up to paying bills on the Internet and would rather ache their feet at winding queues. Of the Bharat Sanchar Nigam Ltd (BSNL)'s 9.5 lakh customers in Bangalore, hardly 6,000 pay their bimonthly phone bill on the Net. Customers are comfortable paying their bills at conventional payment counters rather than click away. Nearly a year ago, ICICI launched www.billjunction.com to help customers pay their bills on the Internet for various services, including BSNL's. Bangaloreans can pay power, water, phone, mobile bills and even fees of a particular college through this site. And for those with cold feet for technology, Bill junction will soon launch bill payments over phone using an Interactive Voice Response System. Payment will be routed again through RBI clearance. Mumbai and Kolkata already have this system in place. A case of inertia is what Bangaloreans seem to experience. They have been reluctant to go through an ``intermediary'' to pay their bill, and would rather stand in a queue once in two months to pay up. They also have doubts of the authenticity of an online receipt. But over time, people have begun to show confidence in this system. ``There is a customer growth of 50 to 60 per cent every month,'' Manesh Nair, zonal manger of Bill junction, told The Times of India. Bangalore Telecom Circle Principal General Manager B.R. Baliga pins down the cold response to a lack of awareness of the customer. ``People need to recognise the advantage of changing over to this system. The bills give details of this system, but people don't look. They only see the bill amount. ''Nair feels the acceptance level of this system will go up with more endorsement from the service providers. Those who avoid BSNL counter queues, pay through the electronic clearance service through the Reserve Bank of India where the bill amount is remitted through the customers' account and transferred to BSNL. ``Bangalore has around 45,000 customers paying through the electronic clearance service,'' says V. Srinivasan, BSNL General Manager (New Services and Marketing). On Bill junction, bills can be paid 24 hours, no new bank account is required, the site sounds alerts when new bills arrive, and gives computerised receipts. Nearly 11,000 Bangalore customers pay their power bill on this site, and the BWSSB bill payment launched three months ago is yet to catch up with a few hundred customers using the site at present. BSNL lucky draws. The BSNL has announced a promotional scheme to speed up revenue collection. It is in the form of two lucky draws __ one is for customers who have no outstanding payment against their telephone and telex as of September 30; the other is for those who clear all arrears by September 30.Customers can check details of the new scheme on www.karnataka.dotindia.com.

From http://timesofindia.indiatimes.com/ 09/19/2002

Maldives: MNCCI Launches Website

MALE (HNS) - Maldives National Chamber of Commerce and Industry has launched its website, MNCCI.com, on Tuesday. The website was officially inaugurated at a function held at Alfresco Cafe by state dignitary Abdul Sattar Moosa Didi. The website is expected to provide information about Maldives business to foreign parties. The website designer, Nocturnal Designs, promised wider development of the site over the next two years.

From http://www.haveeru.com.mv/ 09/18/2002

Musharraf Approves $ 1.2b Project for Karachi--Mega Projects Being Completed at Fast Pace

KARACHI (PNS): President General Pervez Musharraf on Tuesday approved 1.2 billion dollars Karachi Magno Metro Project for Karachi and directed the provincial government and City District Government Karachi to commence the project with immediate effect. President General Pervez Musharraf said that a number of mega projects worth billions of rupees for Karachi are being implemented at an exemplarily fast pace and many of them were progressing ahead of schedule. "We have allocated billions of rupees for Sindh Province to ensure its fast development in priority sectors and this should offset the impression, if any, that Sindh is being ignored." He was addressing a select gathering at Governor House which comprised the Nazims and Naib Nazims of Sindh, industrialists, businessmen, intellectuals, editors, senior journalists, women representing various walks of life, as well as Sindh Governor Mohammedmian Soomro, Corps Commander, Lt Gen Tariq Waseem Ghazi, Provincial Ministers, Chief Secretary Sindh and senior Sindh Government officials. The President said the projects reviewed include the Northern by-pass which is progressing well, than the Lyari Expressway which is also going well and specially the resettlement of the people who are being shifted from the slums. He said it is unfortunate that adverse reports are projected sometime in the media as if something wrong is being done. The president said the people who are being shifted from these slums as well those living in the bed of Lyari in a pitiful condition in hutments, amidst garbage and face fatilities when the river is flooded, are being allotted 80 square yards plots along with cash Rs 50,000. These people will come out of unhealthy conditions and rehabilitated at a place where they will have, schools, dispensaries, electricity, sewerage, sui gas and other facilities and they will have ownership of their houses and still if it is being projected adversely then it is unfortunate. He then referred to review made with regard to 100 mgd K-III water supply project for Karachi and said on completion, the water supply problem of Karachi will be resolved to a great extent. Gen. Musharraf described the progress made so far as satisfactory and recalled that the foundation stones of all these three projects were laid by him. President also informed about the FTC and Shareah Faisal fly-over projects and said that work on them is also going on as per schedule. He said the meeting also reviewed the much demanded Right Bank Outfall Drain Project which would save Manchar lake from pollution caused by the fall of effluents of other provinces into it as a result of which some one lakh fishermen had become displaced. He pointed out that the initial cost of the project was estimated at Rs 116 billion before his government came in. He said that when he took over the project cost came down to Rs 76 billion. The president said that he asked the Pakistan Army to evaluate the project cost and it was further brought down to Rs 14 billion after a six month study. He said that work on this project is going on and when completed it will carry effluent to sea which will help the rehabilitation of Manchar Lake. The President said another project reviewed was regarding Reni Canal between Sukkur and Kotri barrages which the government wants to implement at a cost of Rs 12 to 15 billion. However, in view of some disputes over its feasibility, he had a meeting with the concerned Nazims during an interaction with them, he listened to their observations and removed their misgivings about the project which when implemented would meet the water requirements of three districts of Sindh. He said Thar coal was another important project which was reviewed at a meeting. He said work on this project has started and the area from Islam Kot to Mitthi and Naukot which leads to Nangarparkar is now giving an improved look. The president said under this project, the world's biggest coal reserves are being explored and the same would be used for operation of coal fired power plants being set up with the Chinese assistance. Gen. Musharraf said that another Chinese team is coming to Pakistan on September 5 and this project is on track when initially we will have a 300 mw power unit here. He pointed out that co-related events, we have taken water to that remote area, electricity is being taken, roads being built and railway line will be laid later, while an air strip is under construction. The President said like Korakoram Highway which stands today as symbol of fifty years of Pak-China friendship, the Thar Coal and Gawadar Port project would also serve as symbol of unflinching friendhsip between Pakistan and China. Pervez Musharraf informed that a German firm has brought a proposal regarding megnetic train operation in Karachi. He said the city Nazim has done a lot of work on rail transport plan for Karachi. He described the megnetic train a fantastic project which he pointed out runs at an elevated level without causing distrubance to the ground taffic. "A feasibility study of this project for Karachi and later for other cities of the country is being carried out. It will be an exceptionally futuristic project which would serve as a very cheap and fast mode of transport and will make the railway system in Karachi more efficient," he said. The president said that since this project will be implemented on BOT basis and completed in eighteen months, it will not over burden the government exchequer. Earlier Strict security arrangements had been made in the midst of one day long visit of President Musharraf to the city. According to the details, City Administration along with the law enforcement agencies had closed all the link roads to the Governor House, which resulted in a lot of inconvenience to the public. Police and the Rangers closed the traffic on the Fatima Jinnah Road, Cantt Road and Aiwan-e-Sadr Road. This caused the traffic jam on the I.I Chander Road and the other link roads. Besides, the police and the rangers had also held positions on all the buildings in and around the Governor House and Army House, thereby, prohibiting movements. A large number of people have expressed grief and annoyance over the action and suggested the President and the other high ups to use helicopters for their to and fro.

From http://www.paknews.com/ 09/04/2002

Pakistan: Macro Economic Indicators Show Growth Since 9/11

KARACHI (PNS): The macro economic indicators including real GDP (Gross Domestic Product) have shown a healthy sign of recovery and growth with inflation at a historic low of 3.5 per cent since the tragic incidents of 9/11 last year, official figures said. A single decision of joining hands on the US-led war against terrorism transformed the country's situation in virtually every aspect. It has had effect on the political standing, economic situation, and financial markets of the country. However, such a significant recovery by an economy, which was in shambles before, has not yet put any praiseworthy impact on common man's life in the country. In fact, the masses have had a negative impact. The real GDP growth, showing a decent progress of about one per cent, jumped up to 3.60 per cent on August 31, 2002. The growth rate was 2.55 per cent before the 9/11 incidents. The inflation rate on the basis of consumer price index also decreased, at 3.97 per cent recorded in end-July 2002, the inflation rate was over four per cent before the 9/11, at 4.11 per cent recorded in the beginning of August 2001. In FY02, the inflation was kept at a historic low of 3.5 per cent. However, the nominal GDP growth rate fell to slightly over six per cent in the fiscal year 2001-02, down over 29 per cent, compared to 8.50 per cent in the corresponding period a year earlier. Pakistan's fragile economy has now the support of $7.5 billion foreign exchange reserves, healthy and rising remittances and a massive debt re-profiling. The remittances soared to $2.522 billion by end-July 2002, up 149 per cent, compared with remittances at $1.013 billion on end-August 2001. "The $12.5 billion Paris Club debt rescheduling, $1 billion write-off vowed by the United State' government coupled with $600 million grant, all played a major role in reducing the burden on the local economy," said Khalid Iqbal Siddiqui, a senior analyst at Invest Cap. The money supply in the country grew by an amazing 15 per cent in FY02 mainly on account of dollar inflows. The current account balance soared to $2.744 billion in August-July 2002, up 729 per cent, compared with $331 million in the corresponding period a year ago. The Pak rupee got a handsome appreciation against dollar. The rupee-dollar parity in the inter-bank stood at slightly over Rs59 by August 31, 2002 compared with Rs64 a year ago. The rupee marked a vigorous strength against the US dollar, now 7.2 per cent stronger since 9/11. Had the State Bank not stabilised the greenback to protect exporters' interests, the rupee would have gained more strength. An explosive reversal of capital flight has left interest rates in Pakistan at historic lows, with treasuries and corporate bond prices showing a bullish trend. The 10-year government bonds now yield 9.4 per cent to 9.5 per cent in the secondary market as against 13.1-13.2 per cent in September last year. The foreign direct investment (FDI) did not show a much better progress considering the whopping foreign exchange reserves. The FDI came to $485 million in FY02, up about 51 per cent, compared with $322 million a year earlier. The country faced a trade deficit but managed an encouraging $9.213 billion of exports during August-July 2001-02, compared with $9.129 billion a year ago. The imports were at $10.474 billion as against $10.770 billion in August-July 2000-01. Tax collection also showed some improvement, though not as much satisfactory. The entire tax collection came to Rs401 billion in FY02, slightly up 2.29 per cent, compared with Rs331 billion in FY01. The tax collection by the Central Board of Revenue came to Rs52 billion in July-August 2002 as against Rs46.5 billion a year ago. The financial markets also improved. The benchmark index at the Karachi Stock Exchange plunged to new lows after market crashed on the onset of the US-led attacks on neighbouring Afghanistan. The stock market showed a confident recovery, which made it one of the best performing bourse world-wide with a gain of 59 per cent to-date since September 11.

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

Govt Enhanced Science & IT Budget by 1 Billion

ISLAMABAD, September 16 (PNS): Federal Government has made one billion rupees increase in budget of Ministry of Science and Technology for the current financial year. In 2001-2 total budget of the Ministry was at 6 billion rupees that had been increased to 7 billion rupees in 2002-3. One billion rupees increase in the budget of the Ministry of Science and Technology is aimed at rapid development in information technology and science in the country. The current budget will be spent on the expansion of software industry, development of telecom, science and technology.

From http://www.paknews.com/ 09/16/2002

$1.5m R&D Fund for Knowledge Industry

New Delhi: The government has decided to set up a $1.5-million fund for promoting research and development activities in knowledge-based industries such as bio-technology, pharmaceuticals and chemicals. A number of new policy initiatives in the areas of labour reforms and creation of special economic zones would be taken, said deputy prime minister LK Advani while inaugurating India Chem-2002 here on Tuesday. Mr Advani said the government would play a proactive role in promoting research and developmental activities in these sectors. These efforts would be supplemented by facilitating foreign investments in knowledge-based sectors. Mr Advani also said, "we need to combine swadeshi spirit with foreign knowledge to achieve the desired growth." Addressing the session, chemicals and fertilisers minister SS Dhindsa said due to strong network of research laboratories, educational institutions and technological institutions in these areas, India has a big potential to attract MNCs to set up R&D facilities. Realizing India's strength in the knowledge-based sector General Electrical has agreed to set up an R&D centre in Bangalore with an initial capital outlay of $130 million, he said. Mr Dhindsa said the chemicals, petrochemicals and pharmaceuticals industry has been growing at a rate that is twice the growth rate of the country's GDP. The government has identified the sector as a thrust area for economic growth and exports. The three-day mega show jointly being organised by Ficci and the department of petrochemiclas will facilitate foreign companies to appreciate the quality of chemical products in the country. Indian companies, will get the opportunity to see the latest state of the art technologies being developed globally, he said. Over 79 foreign companies from 13 countries are participating in the exposition beginning on Wednesday. Germany has the largest presence with 33 companies followed by the US with 16 participants.

From http://www.financialexpress.com/ 09/17/2002

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Information Security in the State Sector

On 4 September in Astana, a Moscow company "Informzaschita" together with the ministry of finance of RK will hold a seminar called "Information security in the state sector". KZ-today was advised by the ministry of finance of RK. The seminar is held for the specialists in information protection area, working in the ministries and other authorities of Kazakhstan.

From http://www.gazeta.kz/ 09/13/2002

Helping to Rebuild Education System in Afghanistan

MANILA, PHILIPPINES - The Asian Development Bank (ADB) has agreed to provide a US$4 million grant for a project to help rebuild Afghanistan's education system. The grant will be from ADB's Japan Fund for Poverty Reduction (JFPR), financed by the Government of Japan. The project will pilot a sustainable approach to community-based, gender-sensitive basic education. It will take into account the need for physical facilities, equipment, and materials, as well as for training teachers and school management. War, hardship, and migration have disrupted education for a generation of Afghans. Less than half the population is literate. Women are especially disadvantaged, with as many as 80 percent unable to read or write. Out of 4.5 million eligible school-age children, only 900,000 boys and 90,000 girls are in primary school. However, with the return of refugees and internally displaced persons, the number of registered students is rising. About four out of five schools need extensive repairs. Only a third have toilets for pupils. The special needs of females are not met and the routes to school are insecure in many areas. The project will also address Afghanistan's enormous nonformal education needs - to provide literacy and vocational skills to street children, former child combatants, and ex-soldiers. About 37,000 pupils will benefit from the project, including over 7,000 girls who will receive some stipend. Refresher training will be extended to about 750 teachers. The project will generate about 1,000 construction-related jobs. "Education will build the human capital needed for economic development, as well as promote peace, stability, and social cohesion, the foundation of nation building," says ADB Director for Social Sectors, Edward Haugh. Communities and NGOs will play a key role by proposing subprojects, implementing these subprojects, and developing effective education practices. The project is due to be implemented over two years, starting in October 2002. The Afghanistan Assistance Coordination Authority (AACA), the coordinating agency for development aid, will oversee the project while the Ministry of Education will be the executing agency. An international NGO with extensive basic education experience in Afghanistan will provide capacity-building support. The JFPR was set up in 2000 with an initial contribution of 10 billion yen (about US$90 million), followed by additional contributions of $155 million and a commitment of $50 million. The fund supports projects that target poor people and prioritizes innovative approaches.

From http://www.adb.org/ 09/11/2002

Uzbek Government Grants Privileges to Internet Providers

Government of Uzbekistan has resolved on providing privileges and preferences to operators providing data transmission services and Internet access to educational, medical and scientific institutions, as well as rural users.

From http://81.29.68.227/ 08/28/2002

IMF Delegation in Uzbekistan to Assess Macroeconomic Situation

The International Monetary Fund (IMF) delegation, led by Jules Erik J de Vrier, the advisor to the head of second European Division of IMF, is on a working visit in Uzbekistan. During the next 10 days, the delegation will review the state of macroeconomic situation of the country in the first half of 2002. The IMF experts will review the course of monetary and fiscal policy, discuss with government officials the macroeconomic development in 2002 and its prospects for the future, assess an inflation level, study the state of trade and tariff policy, export restrictions and change of import regime. They will also assess the efficiency of managing treasury bonds, demonopolisation policy and removal of controls over prices and wages, course of privatisation, and carry out the analysis of country payment balance and capacity of pension fund. The previous working visit of IMF delegation to Uzbekistan took place in mid June of this year. Mission has conducted review of implementation of Staff Monitoring Program (SMP), which was outlined in "Memorandum of Economic and Financial Policies for period of January 1 - June 30, 2002 ". As a result of experts assessment, the decision was made to extend the period of monitoring for two more months in order to estimate a degree of stability and irreversibility of reforms in the country. During the present visit, the basic elements of economic programme for 2002-2003 years will be drawn up, which according to Uzbek government expectations, could be supported with financial resources of the Fund and other international financial institutions. Uzbekistan joined IMF in 1992. In 1995, IMF provided Uzbek government with Systemic Transformation Facility (STF) in the amount of USD 144 mln. The same year, the Stand-by Arrangement was approved for support of payment balance of Uzbekistan. In November 1996, IMF has discontinued allocation of the second transhe of the credit. Since 1997, the IMF has been providing assistance with annual review of Uzbek economy and consultations according to the fourth clause of Fund's charter.

From http://eng.gazetasng.ru/ 09/12/2002

Central Asia Gas Pipeline Talks Revived

KABUL, Afghanistan (CNN) -- New talks have begun on the construction of a natural gas pipeline from Central Asia to the Arabian Sea, with officials from Afghanistan, Pakistan and Turkmenistan pledging to move forward on the long-delayed project. "We're very hopeful about the future," Joma Mohammad Mohammadi, Afghanistan's minister of mines and industry, said Monday. "The people and the government of Afghanistan is very determined to bring peace. We're all living with hope and determination to improve the situation in the country and make insecurity something of the past." Representatives of the three countries met in Kabul on Monday to sign the framework for a feasibility study for the project. Officials are expected to meet again next month in Turkmenistan to work out how they will cooperate on the project once that study is complete. The planned pipeline would stretch nearly 2,400 km (1,500 miles) and connect natural gas fields in Turkmenistan with the industrial city of Multan, in central Pakistan. Earlier plans foundered amid the Afghan civil war and following the U.S. missile strikes on al Qaeda bases in Afghanistan in 1998, but have been resurrected since the fall of Afghanistan's Taliban government last year. "All three countries are strongly committed to make all possible efforts for the success of the project, and we look forward to receiving the feasibility study," Mohammadi said. "We very much hope that the study will show the project feasible, and once that is determined, we do not have much concern about how to finance it and how to construct it and how to manage it. It looks like all those matters are under control," he said.

From http://asia.cnn.com/ 09/16/2002

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Fiji's First Web-Based Radio Program Launched

Suva --fijivillage.com has launched a web-based radio program, Namaste Fiji, designed for the large Fiji Indian audience overseas. Leading Hindi broadcaster Anirudh Diwakar, together with other Hindi announcers from Radio Navtarang, will host the weekly program, Namaste Fiji Diwakar Radio Navtarang's Programs Director said: "What's special about this show is that it caters specifically for an international audience. "People living overseas will be able to interact or get involved with Namaste Fiji, by sending dedications, birthday calls and other thoughts via the net, so it's really an international radio from Fiji crossing national boundaries. "For instance we had an interview with Miss Hibiscus, Shital Ram, and from my experience that's the kind of thing our overseas audience want to know, but is not readily available to them." fijivillage.com is part of the Communications Fiji Limited group, which also includes Fiji radio stations Navtarang, FM96, Viti FM, and Legend. It is the only subscription-based website operating out of Fiji. Webmaster Seniloli Koroi said Namaste Fiji adds to other features on fijivillage.com These include news, Hindi talkback radio show Aamne Saamne, Diwakar's Navtarang breakfast show, Viti FM's Vuravura ni qito (World of Sports) and recordings of soccer and rugby commentaries.

From http://www.pacificislands.cc/ 09/17/2002

Canberra Looks at $9b Insurance Plan

On the eve of the first anniversary of the September 11 hijackings, the Federal Government is considering indemnifying the owners of high-rise office buildings for up to $9 billion against catastrophic terrorist attacks. The government is to act as insurer of last resort, underwriting claims against a new insurance pool, that is to be set up by the industry to pay out claims for acts of terrorism. In a discussion paper prepared for federal Treasury by Trowbridge Consulting, one option would result in the insurance pool collecting $100 million annually by way of a three-year levy. The insurance pool could be topped up in the event of an attack and would be backed up by a $1 billion commercial bank loan. If this was exhausted then the Federal Government would become the underwriter of last resort to meet further losses of up to $9 billion. Options for the insurance pool have been kept confidential with invitees to workshops organised by Trowbridge sworn to secrecy. The Federal Government is under pressure to finalise its proposal soon amid fears that it will become increasingly difficult for developers and landlords to obtain financing for new offices and infrastructure projects. The Australian Bankers Association says affordable terrorism insurance is virtually impossible to find. But The Age has been told there has been intense behind-the-scenes debate among key industry bodies as to pricing, the operations of a levy, damages excesses and even definitions of the damage to be covered. It has still not been decided whether the insurance pool should cover nuclear, biological and chemical attacks, whether it should pay out for claims of malicious damage and vandalism or be optional. Should it cover, for example, an A-bomb attack or a single attack in which plutonium is strapped to explosives and set off in an office foyer? "We've been told that the proposal is a constantly evolving one," one Sydney-based industry specialist said. In general, the insurance scheme is expected to operate similarly to that of Pool Re, which was set up by the British Government at the height of the IRA's terror campaign. Under that scheme, premiums cover bombings and if its reserves are exhausted, member companies contribute another 10 per cent, with any remaining liabilities indemnified by the British Government. Any surpluses are returned to taxpayers so the pool works out revenue neutral. But Australia does not have a large insurance sector to sustain a pool with deep reserves. The Property Council of Australia and bankers argue the levy should be compulsory and collected from as wide a range of businesses as possible in order to make the scheme affordable and sustainable. In turn, the insurance industry is worried about a consumer backlash from the imposition of another levy on insurance policies. The Property Council's chief executive, Peter Verwer, said his group broadly supported a scheme covering the widest possible number of businesses and risks. "If people pick and choose there is a major equity issue," Mr Verwer said. He did not think there would be a backlash: "This is a matter of national interest because we have to do more than protect borders, we have to protect our national infrastructure and the government recognises that(by Linda Morris).

From http://www.theage.com.au/ 09/05/2002

IT Specialists Fight Massive Pay Cuts

More than 100 computer specialists have taken a major technology company to court for threatening to cut their salary by up to 50 per cent. Deloitte Consulting told them to accept new rates or face dismissal without redundancy pay because of a declining market. Many of the consultants travelled to Australia from India, New Zealand and the United States for contracts worth up to $117,000 a year with the company. The contractors joined the Community and Public Sector Union after Deloitte proposed new pay scales. Australian Industrial Relations Commissioner Greg Smith yesterday brokered a deal that saw Deloitte accept the union as negotiator for the workers. The company also agreed to defer its September 30 deadline for pay cuts until the outcome of talks next week. The union told the commission that Deloitte had entered freely into employee contracts but now wanted staff to work longer and harder for less pay. The union's assistant secretary, Steve Jones, said the company's move was a way of avoiding redundancy pay. He told the commission about 66 per cent or 600 of the company's 900 staff faced pay cuts of up to 52 per cent. About 24 per cent faced no change to their contract while 10 per cent had been offered a pay rise. If staff failed to accept the new terms they had been told their contracts would end by September 30. Calling for an interim award, Mr Jones said Deloitte had behaved in a "thoroughly reprehensible manner". Counsel for Deloitte, Nick Ruskin, said the market had declined over the past two years with the collapse of dot-com companies, the Enron scandal and September 11. Mr Ruskin said Deloitte had invoked redundancy programs and productivity drives. A pay review was a last resort. Mr Ruskin said the company was seeking average wage cuts of 10 per cent. The company had based its wages on a benchmark above the industry average. Sector wages had dropped significantly over the past 12 months, leaving the company no choice but to bring rates into line with its competitors. He said two workers would suffer a 50 per cent pay cut and 12 others would suffer cuts between 40 and 49 per cent, a point disputed by the union (by Paul Robinson).

From http://www.theage.com.au/ 09/05/2002

Women Dominate New Jobs Growth

THE economy is finally creating substantial numbers of full-time jobs after months in which part-time positions were the only source of new employment. Official employment figures for August released yesterday show 87,700 new full-time positions, as well as an increase in the number of people looking for work. The new jobs went overwhelmingly to women - 80 per cent of the total - suggesting a recovery in the retail, hospitality and services sectors, analysts said. The unemployment rate remained steady at 6.2 per cent despite an estimated increase of 13,400 jobless, reflecting overall growth in the employment market, the Australian Bureau of Statistics said. Market analysts said the survey was volatile and the months ahead would be more difficult as lower exports and drought took their toll. The increase in full-time positions was overdue after only lacklustre improvement, despite a year of good economic growth, they said. Prime Minister John Howard said the result meant a million additional jobs had been created since his election in 1996. However, job creation is still slower than the growth in the adult working age population, which is up 1.3 million. But an increase in the number of people opting to take retirement or going into full-time employment kept unemployment numbers steady. Full-time jobs are up 453,900 since March 1996, and part-time positions up 591,000. "There's no more important economic or social obligation of a government than that of jobs generation," Mr Howard said. "And after 6? years in office to be able to look back and reflect on the creation of so many jobs is a mark of this Government's successful economic policies and also a mark of the entrepreneurial flair of Australian businesses, the productivity improvement and the general health and wellbeing of the Australian economy." Trade Minister Mark Vaile said the drought would start to affect exports but that other countries were also suffering from extreme weather. Similar conditions in grain producers such as the US and Canada would cut production there, he said. "If you have difficult climatic conditions that cause a lesser production level, then it is going to have an effect on export figures," he said. "With a lower level of a harvest in the US and Canada because of similar circumstances, it is going to mean there is going to be a shortage of grain on the world market." (by Sid Marris)

From http://www.theaustralian.news.com.au/ 09/13/2002

Australia: Growth Hits Speed Bump

THE surging domestic economy has been given a reality check by sobering new data on growth, retail sales and manufacturing warning that the world-beating boom has peaked. The figures released yesterday appeared to remove any prospect of the Reserve Bank of Australia pushing up official interest rates today. They suggest international uncertainty, the early financial effects of widespread drought and the first signs of consumer spending fatigue are starting to unsettle the economy. The national accounts showed what Treasurer Peter Costello called a "solid" result - the economy grew 0.6 per cent for the June quarter and 3.8 per cent for the year. Mr Costello conceded growth was easing but insisted Australia was still performing strongly by world standards. He warned - yet again - that the "precarious" US economy, still trying to cope with the psychological blow of the September 11 terrorist attacks, remained the greatest threat to domestic growth With the Reserve Bank still inclined to raise interest rates once it is persuaded Australia won't be upset by the overseas turmoil, Mr Costello continues to suggest there is no inflationary threat to justify tightening rates. "I always get into trouble when I comment on interest rates and, as you know, I studiously decline from doing so but this is solid growth," he said. "We are not seeing inflationary signs, 2.2 per cent, either at the moment or down the track." The RBA board is expected to leave official rates unchanged this month at 4.75 per cent - equating to a home mortgage lending rate of 6.57 per cent. Economists were divided on yesterday's statistics, with some warning the apparent slowing was "deceptive" and that low interest rates should be allowed to continue stimulating the economy. But others thought they marked the start of a "slippery slope" and were not persuaded by the Treasurer's prediction that the "composition" of growth would switch smoothly from housing and consumption to business investment. The figures showed construction was up 5.8 per cent for the June quarter, while spending on accommodation, cafes and restaurants up 3.4 per cent, and retail sales up 2 per cent. Business investment was up 8.1 per cent for the quarter. But agriculture was down 2.1 per cent, as was property and business services. Retail sales for July were weaker, showing a 0.5 per cent fall - the first slip since August 2001. But retailers blamed the result on the finish of end-of-financial-year sales the month before. "I am not surprised to see the July sales a bit softer," said David Jones chairman and RBA board member Dick Warburton. The Westpac/Australian Chamber of Commerce and Industry quarterly survey, also released yesterday, showed a sharp drop in new orders, with more firms expecting sales to fall rather than to rise, and a falling-away of general business confidence. While most economists had been predicting the national accounts to show quarterly growth of 1 per cent, one of those who picked the result, ICAP chief economist Ric Simes said it showed the economy could not sustain 4 per cent annual growth without putting pressure on the balance of payments. "Policy-makers should be worried about the demand side. If it is so strong, why can't we produce it locally especially when the dollar is so low," he said (by Sid Marris).

From http://www.theaustralian.news.com.au/ 09/04/2002

IT Consortium Gets Govt Backing

The Government will contribute $500,000 towards a new initiative to boost the information and communication technology (ICT) sector. The Wellington-based MediaLab South Pacific Inc is a research consortium of institutions and the private sector to turn ICT ideas into commercial reality more quickly. The funding comes from Industry New Zealand's Strategic Investment Fund, matching a $686,000 already pledged by industry and academic groups who founded MediaLab and make up its national membership. Chief executive Michael Gregg said the extra money would enable MediaLab to open its doors in October and begin a number of world-class research projects. "We want to break down any barriers that prevent our research providers and private sector members from collaborating within the ICT and digital media sectors," Mr Gregg said. Strategic partners, who contribute $50,000 in membership costs, include Telecom, TelstraClear, Unisys, and Massey and Victoria universities. Industry and research partners include Ericsson Communications, Industrial Research Ltd, Oktobor and Whitireia Polytechnic. MediaLab chairman, Ian McIntosh, who is Deputy Dean (Research) at Victoria University, was enthusiastic about the potential of MediaLab. "We've spent a year building a business model and reviewing intellectual property options that allow MediaLab to add real value to the research already underway within industry and in our universities and polytechnics," he said. Industry NZ chief executive Neil Mackay said membership of MediaLab was a "who's who of the Wellington region and national Information and Communications Technology, digital media and research communities". "That reach will also extend to international companies who will be attracted to New Zealand by the sheer excellence of MediaLab's activities." One of the research projects MediaLab has lined up is a "wireless bed management" system, which allows hospitals to accurately view which beds are available before cancelling surgery. Another project, which would take three to five years to develop, was a computer game-based literacy programme. "The work we're doing in that space will be identifying the triggers that motivate children to continue to read, and investigating ways they can be built into a PC-based game," said Mr Gregg. MediaLab was already talking to publishers and venture capital firms in North American market.

From http://www.stuff.co.nz/ 09/25/2002

New Zealand: Long and Winding Road to Approval of Eastern Corridor

The eastern highway is not a done deal. In fact, the proposals for a six-lane road from the central city through the eastern suburbs to Manukau are just that - proposals. The public has until October 4 to make public submissions on the plans by Eastdor, a consortium of planning, engineering and environmental consultants hired in March to come up with broad options for the eastern corridor. The Auckland and Manukau city councils will then consider the feedback and commission a more detailed study of the options. Crucial to this study will be an assessment of the environmental effects. The detailed study will form the basis for the councils seeking a new designation for the corridor and resource consents to build over the coastal areas of Hobson Bay, Orakei Basin and Purewa Creek. Auckland City transport planning manager Janine Bell said the detailed study would take about 12 months. The councils would go to tender for the $1.5 million contract, 52 per cent paid for by the Auckland and Manukau councils and 48 per cent by the national funding agency, Transfund. Once the detailed options were released, the public would have an opportunity to make submissions, followed by a series of hearings. Janine Bell said independent commissioners would hear the land designation applications in Auckland and Manukau cities. The Auckland Regional Council would hear resource consent applications for coastal areas. It is inevitable that the decisions of the commissioners and the ARC will be challenged in the Environment Court. It is anyone's guess how long that process will take, but Janine Bell said the minimum timeframe was one year. Should the councils receive final approval from the courts, it will take two to three years to complete the design work, come up with a funding package and build the highway. Under the best-case scenario, it could be open by 2007. It could also never happen. (by Bernard Orsman)

From http://www.nzherald.co.nz/ 09/03/2002

Electricity Shortages Tipped as Maui Declines

Threats of electricity shortages and power price rises have been raised by Government energy experts, who say New Zealand needs a replacement for the fading Maui natural gas field. An added need for new power stations to cope with increasing electricity demand is outlined in official briefing papers released yesterday by Energy Minister Pete Hodgson. They say demand for electricity is climbing at the rate of around 2 per cent, or 800 gigawatt hours, a year, requiring more than 150 megawatts (MW) of new generation capacity each year. New Zealand's biggest thermal power station, at Huntly, has a capacity of 1000MW. Transpower, the owner and manager of the national power grid, forecasts that, by 2005, assuming high load growth, existing generation will not be enough to meet demand in a dry year. In July it said that electricity prices north of Auckland would double in less than a decade unless money was invested in new power stations or improving the national grid. The impending depletion of the Maui gas field in 2007 is the common factor in many of the most pessimistic predictions of electricity shortages, as its cheap gas is needed to fuel power stations, particularly when dry years force hydro stations to curtail production. The Pohokura field is likely to start producing natural gas in 2005. It is only one-third the size of Maui and expected to provide more expensive gas. The only new power station confirmed for construction is a gas-fired station at Huntly, which should provide 400MW in 2005 for the state-owned power company Genesis. Privately owned Contact Energy has shelved plans for a similar 400MW station, costing up to $450 million, at its Otahuhu site, saying it cannot guarantee supplies of enough natural gas at a cheap enough price. It is looking at buying power stations in Australia. State-owned enterprise Meridian Energy will lodge resource consent applications later this year to build a billion-dollar hydro scheme on the South Island's Waitaki River, to generate 570MW within 10 years. Energy officials have said that it is likely more coal will be needed "to cover supply shortfalls in the period until a more comfortable generation balance is restored". Mr Hodgson said it was important that economic growth was in some way "de-coupled" from growth in energy demand. New Zealand had to improve its energy efficiency. He said he expected to have some certainty by the end of this year that new generation was being built, but he would not be leaving it entirely to market forces. "The theoretical role is that the market will provide. I am not a minister who will accept that the market left to its own devices will always provide in a timely way." The interests of electricity companies were not always "totally aligned with the needs of the nation". He said he was confident that unless there was a winter like last year, there would be enough electricity generated to cope with expected growth in demand. New Zealand had been "spoiled" by the Maui gas field, not only through extremely cheap gas, but also its physical characteristics that allowed it to be "turned up", with more gas sucked out of the field. Mr Hodgson said the market was structured in the way the power companies wanted and if they failed to deliver there would be Government regulation. "I say to electricity companies - you want a competitive model, you've got a competitive model. You've got to be sure that model works and generation arrives in a timely manner." Mr Hodgson said he was not a minister to just sit back waiting for the companies to build new power stations. (by Chris Daniels)

From http://www.nzherald.co.nz/ 09/05/2002

Help for Hearing on Internet

A website dedicated to furthering the aims of the Oticon Foundation in New Zealand goes live to mark Deaf Awareness Week (September 23-30) at Oticon "We aim to improve the lives of hearing-impaired New Zealanders by providing web-based access to our grant information, research and publications," says Karen Pullar, an audiologist and secretary to the trustees. The foundation gives $100,000 each year to projects that increase awareness and knowledge about hearing loss. These have included groundbreaking research into classroom acoustics in primary schools, and information for architects and building consultants on assistive listening systems. Grants have also gone towards specialist training, research and services for the hearing-impaired and visits from overseas experts. Karen Pullar says the website will make applying for grants easier. "The Oticon Foundation website will make the process of applying for grants easier as people can find out information about the quality and range of projects that we have funded."

From http://www.nzherald.co.nz/ 09/23/2002

New Caledonia Joins Pacific Islands Forum Trade, Investment Meeting

Suva (PINA Nius Online) - New Caledonia will be represented for the first time as heads of trade and investment agencies in Pacific Islands Forum island countries meet next week - in Beijing, China. The sixth annual meeting of the Heads of Investment Promotion Agencies will coincide with the opening of the Pacific Islands Forum Trade Office in Beijing. New Caledonia, a French territory which has observer status with the Forum, will be represented by its trade and investment promotion agency, Adecal. A representative of the Chinese private sector will also be invited to join the meeting. The representative will speak on Chinese expectations of the Pacific Islands region for investment purposes. Staff of the Forum Trade Office in Beijing say there is growing interest from China for trade and investment opportunities in the Pacific Islands. Pharmaceutical interests in Zhuhai city in Guangdong Province are studying Pacific Island herbal products, such as noni and kava, a Forum Secretariat news release said. This is for possible use in the herbal and pharmaceutical industry, and follows investment seminars already run by the Forum office. Trade Representative Rohan Ellis said the office is also helping Fiji and Vanuatu with their applications to be listed as an Approved Destination Status for Chinese. China's National Tourism Administration Committee approves tourism destinations for Chinese citizens. A major construction and travel operator indicated interest in developing vacation options to Fiji, the Forum Secretariat news release said. The investment seminars also identified food manufacturers who are seeking joint ventures for small food production plants in Tonga and Samoa, it said. Seminars in other Chinese cities have focused on fisheries, aquaculture, farming and forestry resources in the region and mineral and fossil fuel resources in Melanesia. In Hainan Province, the Hainan Ministry of Agriculture has flagged more projects in aquaculture, the news release said. It is also keen to extend technical assistance to commercial fishing. The news release said Hainan investors are seeking to build trade with the islands, while importing products such as taro and vanilla for produce markets, and coconut kernels for a coconut juice production factory. The Pacific Islands Forum Trade Office began operations in Beijing in January. Its official opening by Forum Secretary-General Noel Levi is on Wednesday. The Heads of Investment Promotion Agencies meeting is Thursday and Friday.

From http://www.pacificislands.cc/ 09/06/2002

Solomon: ICT-- Rural e-Mail Station Brings Farmers Access to Information

Honiara (SIBC/PINA Nius Online) - A rural community in North Malaita in the Solomon Islands now has access to e-mail, thanks to cooperation between three groups.A partnership between the pioneering People First Network (PFNet), the AusAID Community Peace and Rehabilitation Fund, and Kastom Garden Association brought e-mail to Silolo.It will provide the community easy access to cheap communication, including local farmers sharing information and obtaining technical and marketing advice, a statement said, PFnet was initiated by the Solomon Islands Development Administration and Participatory Planning Programme. It has been supported by United Nations agencies.Its objectives include creating a rural mail network using radio technology, solar power and information management techniques. The community e-mail station is the sixth of its kind throughout the Solomon Islands, but the first in Malaita Province. In June, PFNet launched a rural e-mail station enabling students to take University of the South Pacific (USP) courses using PFnet facilities set up at a high school in South Choiseul. The project, a news release said, was expected to lead to:- better access to distance learning courses in rural areas, - better delivery and supervision of the students by USP administrators and tutors,- and the USP Centre in Honiara developing course variations specially designed for delivery by e-mail.# Meanwhile, a leading Solomon Islands Non Government Organisation (NGO) said unless Solomon Islanders relearn the skills of gardening and fishing, they could face starvation.Solomon Islands Development Trust executive director Abraham Beanisia said the country has become too reliant on imported foods such as rice and bread. But he said they need money to pay for imported food and this is becoming increasingly difficult because of the economic crisis the country is in. The land and sea can become the supermarket for Solomon Islanders, he said.

From http://www.pacificislands.cc/ 09/17/2002

Pacific Prepares for Economic Partnership Negotiations with EU

Suva - Pacific Islands countries will this week begin seeking to negotiate a development agreement with the European Union (EU), rather than one based only on market access, a senior regional official said. Pacific Islands Forum Acting Secretary-General Iosefa Maiava made the comment on the eve of negotiations opening in Brussels to establish economic partnership agreements with the EU. The economic partnership agreements come under the Cotonou Agreement, the massive aid, trade and development partnership between the EU and the ACP (African, Caribbean, Pacific) group of nations. Mr Maiava said in a statement issued in Suva by the Forum Secretariat: "Even though globalisation has been forced upon us by events beyond our region, it is up to the Pacific region to turn this challenge to our advantage. "An Economic Partnership Agreement might provide us with an opportunity to do that. Mr Maiava said the concept of special treatment for the weaker members of the global community - especially the Least Developed Countries - was a central theme to the Pacific ACP states. He said the ACP group needed to pay attention to the issue of World Trade Organisation (WTO) compatibility of any new trading arrangements with the EU. But the weakness and vulnerability of many of Pacific Island economies meant that it was essential to be flexible, open-minded and practical. Last month in Suva the Pacific ACP Leaders endorsed a two-phase approach to the negotiations for an Economic Partnership Agreement: one that was ACP-wide, and a second for Pacific ACP states. Mr Maiava noted that the Cotonou Agreement with the European Union sought to reduce poverty, promote sustainable development, and integrate the ACP countries into the global economy. He said: "Therefore, an EPA should help and not frustrate the achievement of such an objective. "It must help our people, not through welfare handouts, but through opportunities to earn incomes by using their resources - their land, their fisheries, their industries and their business talents." The negotiations for an economic partnership with the European Union start on Friday. They have five years to reach an agreement that will shape future relations between the EU and the ACP and the Pacific ACP states. Pacific ACP states are: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu. European Union (EU) members are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, United Kingdom. - PINA Nius Online.

From http://www.pacificislands.cc/ 09/23/2002

Challenge to Papua New Guinea- Find a National Culture

Port Moresby (NBC/PINA Nius Online) - Papua New Guineans have been challenged to find a culture that will represent the true identity of the country. Culture and Tourism Minister Alois Kingsley made the call when speaking at the launch of the 2002 Hiri Moale Festival in Port Moresby. Mr Kingsley said currently Papua New Guinea has many unique and diverse cultures and traditions. However, there is no one culture people in the country can claim as a true image of Papua New Guinea. He said he believes establishing one true culture for Papua New Guinea will further create a sense of belonging and patriotism within people. The minister encouraged Papua New Guinea to put the interest of the nation before that of their province or ethnic groups - an attitude that will complement a true one identity of the country. He also commended the Motu-Koitabu people for maintaining their cultural heritage through the Hiri Moale Festival, a benefit for future generations as well. A total of 23 Hiri Hanenamo contestants are taking part. Meanwhile, traditional canoe racing is continuing at the Ela Beach. Mayor of Townsville, Anthony Mooney, and other dignitaries and representatives of foreign missions were at the beach to be part of the celebrations. Townsville is the sister city of Port Moresby. Opening the festival, Governor-General Sir Silas Atopare urged all people of Papua New Guinea to preserve their traditions and cultures because they bind people and unite communities. He said as new challenges of Western influence come into Papua New Guinea, people should continue to promote and maintain their respective cultures and traditions from extinction.

From http://www.pacificislands.cc/ 09/15/2002

Pacific Ywcas Get Help Bridging the Digital Divide

Pago Pago (Samoa News/PINA Nius Online) - South Pacific YWCAs are getting help bridging the digital divide to improve services and leadership opportunities for women in the Pacific Islands. Two American Samoa YWCA representatives - President Upuolevavau Tasi Lili'o, and Youth Representative Sepora Tagaloa - are amongst Pacific women at training being held in Melbourne, Australia. This is the first phase of the World YWCA Council's preparation for the International Women's Summit 2003 - to provide leadership training in computer and internet use. The council says since women and girls are often victims of the "digital divide" with limited access to computers and/or training in information technology fields, it should place a priority on this. It is including computer and Internet training in all regional and global training events before the International Women's Summit. Specialized consultants will help each participating woman become proficient in: o using the Internet to find information; o sending and receiving e-mail; o using forums and discussion groups for continued collaborations; o the basics of setting up websites. Through this training women will achieve greater opportunities for sharing and connecting with other women leaders throughout the globe, the World Council said. The YWCA of Australia will be the hostess for the World Council/International Women's Summit for 2003. As part of its coordinating role it initiated funding for the computer training project. This will: Present a hands-on introduction to computer and Internet skills for women in leadership positions. Facilitate training in the use of World YWCA resources, including the Internet and guide to establishing individual country YWCA website pages on the World Wide Web. Expand access to information, research and resources through website searches and development of skills to achieve this. Introduction to non-web based tools such as e-mail, e-mail forums, list services, and data bases. Build the individual capacity of each YWCA to develop its own organization's international training needs and abilities to access appropriate resources to fund identified priorities. Assist in the identification of local NGOs, government Internet societies, universities and schools that can assist with technical skills and equipment. Follow up training and support for individuals when they return to their organization and have had the opportunity to further identify their individual information and skills development needs.

http://www.pacificislands.cc/ 09/18/2002

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ADB and MIGA Promote Foreign Direct Investment in Asia

The Asian Development Bank (ADB) and the Multilateral Investment Guarantee Agency (MIGA) today agreed to collaborate in supporting foreign direct investment in Asia. According to a Memorandum of Understanding signed here by MIGA's Executive Vice President Motomichi Ikawa and ADB Vice President (Finance and Administration) John Lintjer, the two agencies will promote economic growth and sustainable development in Asia through closer collaboration on projects and programs. ADB and MIGA will support joint projects in which one or both will provide investment guarantees, in combination with ADB direct assistance, such as loans or equity investments. Eligible projects must be financially, technically, and environmentally sound. One such collaborative project, already undertaken by the two agencies, is the Manila North Tollways Corporation, which entails the expansion and rehabilitation of a toll road in the Philippines. MIGA and ADB will also work together to increase awareness of political risk insurance and guarantees in Asia. They will collaborate to support private sector development in other ways, such as providing technical assistance to governments and investment promotion boards. "The signing of this memorandum, and last week's opening of our regional office in Singapore, signal our commitment to increasing the flows of foreign investment into the region," said Mr. Ikawa. "By formalizing our cooperation with ADB, we take this commitment one step further." "This partnership creates a powerful combination -- MIGA's experience in political risk, and ADB's regional expertise and resources," said Mr. Lintjer."Together, they strengthen our hand for private sector development and reducing poverty in Asia." ADB, a leading multilateral development finance institution in the Asian and Pacific region, helps its developing member countries through loans, grants, equity investments, and guarantees, including those covering specified non-commercial risks. MIGA, a member of the World Bank Group, provides guarantees against non-commercial risks to nationals from its member countries investing in developing economies. It also provides technical assistance to the governments of developing member countries to help them attract foreign direct investment.

From http://81.29.68.227/ 09/24/2002

APEC Finance Ministers Commit to 'Immense' Battle Against Terrorism Funds

LOS CABOS, (AFX) - Asia-Pacific finance ministers vowed to detect and destroy hidden terrorist money networks after a two-meeting, but conceded it will be an "immense", uphill struggle." The war on terrorist financing is an immense undertaking," US Treasury Secretary Paul O'Neill told partners in the 21-member Asia-Pacific Economic Cooperation (APEC) forum meeting here." The openness of our modern financial system, which allows savers and investors to fuel economic growth in every nation, also creates opportunities for terrorists to hide in the shadows," he added. "Our challenge is to protect the freedom and flexibility of the world financial system, which is essential for successful economic development in the APEC states in particular, while driving our enemies into the sunlight, where we can sweep them up. "The APEC ministers released a new action plan with the ambitious goal of shifting the fight away from the formal banking sector to other channels, such as the "hawala" network used mostly by foreign workers to move funds between Asia and the Middle East. Highlights of the plan were commitments to:- Tighten scrutiny of charities and of "hawalas".- Cut off access to the financial system by freezing the assets of terrorists and their supporters.- Sharpen the effectiveness of freeze orders on terrorist assets by using the full force of current laws and ensuring compliance.- Join forces between the private and public sector, sharing information, and implementing standards drawn up by the United Nations, the Paris-based Financial Action Task Force and other international groupings.

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

Statement of Heads of Regional Development Banks

Johannesburg, South Africa - The following statement was issued today by the heads of the regional development banks including African Development Bank President Omar Kabbaj, Asian Development Bank President Tadao Chino, European Bank for Reconstruction and Development President Jean Lemierre and Inter-American Development Bank President Enrique V. Iglesias. During the World Summit on Sustainable Development, heads of the world's regional development banks stressed their continuing commitment to promoting sustainable development and their belief that the principles of sustainability will be implemented best through a partnership of governments, international institutions, sub-regional organisations, private enterprises, local populations and other stakeholders, according to EBRD press-release. Each of the four banks works to promote sustainable development in a separate region of the world and uses particular tools and approaches. Whether working to help countries to build and undertake sustainable development agendas that will reduce poverty and preserve the environment; enhancing transparency; or financing the private sector to invest responsibly towards development, the banks leverage their expertise towards sustainable prosperity for the people of their regions. In each region there has been progress. But there are many challenges ahead in achieving the aims set out at the Earth Summit a decade ago. At their meeting in March, at the Monterrey Conference on Financing for Development, the heads of development banks emphasized sensitivity to the particular conditions of each country. The regional development banks bring their special commitment, knowledge and focus on individual country situations to the collective international effort. They also pointed out the need to refine systems to monitor effectiveness of their programmes. The Johannesburg Summit underscores the importance of many voices around an agreed objective - the voices of institutions and governments alongside voices of NGOs and communities, responsible businesses and all stakeholders. We, the heads of regional development banks, reaffirm our strong commitment to work in partnership to leverage the power of a multitude of voices to serve in the real and effective implementation of the principles of sustainable development.

From http://81.29.68.227/ 09/02/2002

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BOC Ranked 1st Among Emerging-market Banks

The Bank of China (BOC) announced in Beijing Tuesday that Euro money magazine has ranked it first out of 250 banks for shareholder equity in an emerging market. According to the authoritative finance magazine, some emerging market banks achieved rapid growth and profits, despite global gloom, through restructuring, cost-cutting and consolidation over the year, which "set them apart from stagnant global rivals." Of the banks with the best equity growth, Chinese, Korean, Southeast Asian and East European banks were the most outstanding. A total of 17 Chinese banks were included in the ranking. By the end of 2001, BOC shareholder equity amounted to US$26.387 billion, an annual growth of eight percent from the previous year. In the first half of 2002, the bank registered an operating profit of 21.346 billion yuan (about US$2.58 billion). By the end of June, the bank's rate of non-performing loans dropped 2.12 percentage points to 25.39 percent.

From Xinhua News Agency 09/18/2002

Shanghai Sets Up Credit System for CPAs

China's commercial center Shanghai has recently set up special files to track the credit standing of 2,500 certified public accountants (CPA) and all its 84 accounting firms in a bid to improve transparency and creditability in the accounting sector. Initiated by the city's CPA Association and the Shanghai Credit Information Services, the new credit system was designed to record the credit standing of these CPAs and accounting firms and collect records of fraudulent practices and penalties. These would be publicised in local newspapers or on websites. Insiders say the credit system will help regulate accounting practice, promote honesty and good faith and upgrade the overall creditability of the industry. The system would gradually expand to include other accounting personnel in Shanghai, said a source with the city's CPA Association. The move came amid a creditability crisis affecting accountantsas a result of recent malpractice in the Chinese and overseas security markets, he said. The 84 accounting firms in Shanghai employ over 6,700 people, including 2,520 CPAs. Among them, eight large-scale CPA firms are responsible for auditing the financial statements of some 2,000 listed firms. The sound investment environment in Shanghai has also drawn renowned international accounting firms such as Price waterhouse Coopers, Deloitte Touche Tohmatsu and Ernst & Whinney, which have set up their regional headquarters in Shanghai.

From http://ce.cei.gov.cn/ 09/06/2002

China Unicom Launches Mega Flotation

SHANGHAI/HONG KONG, China (Reuters) -- China's No. 2 cellular carrier, the Unicom Group, has launched its massive 11.5 billion yuan (US$1.4 billion) domestic IPO, giving mainland investors an opportunity to tap the booming mobile market. China United Telecommunications Corp Ltd's five billion A share issue is priced at 2.3 yuan per share, equivalent to 20.23 times 2001 earnings, and will raise net proceeds of 11.26 billion yuan, the firm said in an issue prospectus on Tuesday. The offer was launched to strategic and institutional investors on Tuesday -- they can buy up to 45 percent of the IPO, the largest ever in China by number of shares and the second largest in value. Strategic investors, which can buy up to 25 percent of the offer, must hold on to their shares for 12 to 18 months after listing. Shares sold to institutional investors are locked up for six months. The rest of the IPO will be launched to secondary share market investors, including retail punters, on Friday. Analysts expect Unicom's offering to be popular with domestic investors since the group is the first mobile operator to sell shares in the mainland, the world's largest cellular market with more than 175 million mobile subscribers and growing rapidly. Analysts said the Unicom Group, which also has fixed-line and paging operations, has a strong corporate performance record and a bright future. "We expect income and profit to continue to rise steadily in the next few years," the prospectus said without giving a forecast. First-half net profit was 920 million yuan, up 5.7 percent year on year. The A share unit will be 74.6 percent owned by China United Telecommunications Corp, the parent of Hong Kong-listed China Unicom Ltd. Net proceeds would be used to construct Unicom's CDMA (code division multiple access) network. Some analysts noted that at a price-to-earnings ratio of 20.23 times, the A-share valuation compares unfavorably to that of China Unicom Ltd. Its Hong Kong shares closed at HK$5.05 or a historic P/E of 14.99 times on Monday. Nevertheless, analysts said there was room for the shares to rise on debut because retail investors tend to focus on absolute share prices and Unicom's was relatively low. The cheapest stock on the domestic market, Maanshan Iron and Steel, closed at 3.50 yuan on Monday. Analysts said that since Hong Kong and A shares are not exchangeable, there is little correlation between share price movements. "You may get a very different share performance between the two markets," said Alistair Scott of Merrill Lynch. China's largest domestic IPO so far is an 11.8 billion yuan offer by oil giant Sinopec Corp in July 2001. Unicom did not say when the A shares will start trading on the Shanghai stock exchange, only that it would aim for a quick listing after completion of the IPO.

From http://asia.cnn.com/ 09/17/2002

China's Small, Medium-sized Banks Open to Private Shareholders

China's central bank Monday "welcomed and supported" private and overseas investors in buying shares in the country's small and medium-sized commercial banks. Liu Shiyu, a senior official in charge of banking supervision, said small and medium-sized commercial banks had accounted for 20 percent of the total assets, deposits and loans of the country's commercial banks by the end of June this year. Their development has promoted competition between banks and benefited the growth of small and medium-sized enterprises and private enterprises. Liu said the People's Bank of China will give the go-ahead to applications for establishing small or medium-sized commercial banks in cities and prefectures without commercial banks, as long as the investment by local enterprises and individual capital reach 100 million yuan (12 million US dollars) and requirements of the law on commercial banking are met. But he gave not details on how overseas investment can enter small and medium-sized commercial banks. The official said government departments have been exploring ways to guide private investment in commercial banks during the country's financial reform. Small and medium-sized commercial banks in China were set up during the process of the country's transition from a planned economy to a market economy.

From Xinhua News Agency 09/17/2002

China: Bank Giant Looking to NPLs

Despite its landmark purchase late last year of non-performing assets from a State-owned asset management company and the subsequent stall in proceedings, Morgan Stanley is considering further moves into the risky yet potentially lucrative Chinese business sector. The investment banking giant is seeking a broader involvement in the country's increasingly urgent drive to recover its mountainous non-performing loans (NPLs). "We are in touch with almost every bank you can think of," Zhao Jing, executive director and newly-appointed chief representative of Morgan Stanley in Beijing, said this week. "The bigger it is, the better economies of scale. The broader the composition (of NPLs) is, the better it is for Morgan Stanley." In a breakthrough in China's battle for NPLs, the Huarong Asset Management Company signed a deal last November to sell 10.8 billion yuan (US$1.3 billion) of non-performing assets to an international consortium led by Morgan Stanley. The consortium also included the Lehman Brothers, Salomen Smith Barney and KTH Capital. The buyers and Huarong have agreed to establish a joint venture to manage the assets but are still waiting for the final approval. Zhao said it is only a matter of time. "It's the first time (foreign investors bought non-performing assets), so there are new issues to handle." Although she said it is proceeding smoothly, she would not say when the approval is expected to be made. Zhao said the joint venture will be established shortly after the approval and become operational. Analysts say the high NPL ratios are seriously hindering reform in China's four State-owned commercial banks, all of which have announced plans to list, typically in five years. The deal between Morgan Stanley and Huarong, they say, is a test for the possibility of large-scale foreign participation in solving China's bad loan problem, which the government is increasingly inclined to resolve. "If the recovery (of bad assets) turns out to be good, everybody will come and the price will then rise," Zhao said. The central bank said the four asset management companies recovered 45.4 billion yuan (US$5.5 billion) in cash by the end of June, 21.6 per cent of the non-performing assets they had disposed of.

From http://www1.chinadaily.com.cn/ 09/05/2002

Japanese Government Bond Auction Fails

Investor confidence in Japan suffered another blow on Friday after a Y1,800bn auction of 10-year Japanese government bonds was undersubscribed for the first time in its history. Traders were unnerved by the unprecedented lack of demand, but chalked it up to a case of incredibly bad timing. Earlier this week, the Bank of Japan said it would buy shares directly from commercial banks in an effort to reduce their massive exposure to stock markets, a move which sent shock waves through the markets. "It indicates the disarray that exists in the financial markets right now, in terms of the BoJ sending one set of signals and the government not yet being fully coordinated and delivering a clear set of other signals of what they're going to do, if anything," said John Richards, strategist at Barclays Capital in Tokyo. Junichiro Koizumi, Japan's prime minister, said on Friday the government would unveil measures in October to speed up the disposal of banks' bad loans. But investors were sceptical regarding the resolve of the government to take definitive action to curb deflation and said the failed auction raised questions regarding its abilities to raise future funds. The bid volume for the auction was Y1,185bn, well short of the Y1,800bn on offer. It was the first undersubscribed issue since 1989, when Japan began competitive price auctions for 10-year JGBs. Thanks to a finance ministry safety net, however, a syndicate of financial institutions is expected to buy the undersubscribed portion of the auction of about Y165bn. Masaru Hayami, governor of the BoJ, was unconcerned. "I am not that worried. I believe investors' appetite for JGBs is unchanged," said Mr Hayami. He added that 10-year JGBs were in a correction phase and that some market instability was inevitable. But investors thought otherwise, and the auction's failure sent the JGB market reeling. The yield on the benchmark 10-year JGB rose 12.5 basis points to near two-month highs and the key 10-year JGB futures contract fell more than a point to 139.04 in intraday trade. The yen also plunged after the auction, falling to three-year lows against the euro and slipping sharply against the dollar. The euro rose to Y121.2 against the yen while the dollar reached a high of Y123.39 in European trade. "If auctions are consistently uncovered it undermines confidence in the system," said Mr Richards. "The borrower will not able to pay its bills or rollover its existing debts - that also applies to the MoF, in this case, which is why [the undersubscribed auction] was so embarrassing." Thursday's auction was eerily reminiscent of a best-selling novel in Japan published nearly two years ago, called Nihon Kokusai, which translates as Japanese Government Bonds. The book, which was much discussed on talk shows and in the media after its release, told the story of a group of bond traders who deliberately created a financial crisis by boycotting a Y1,400bn auction of 10-year JGBs. By boycotting the auction, the traders were aiming to force the Japanese government into making much-needed reforms. On Friday, Merrill Lynch bond strategist Masuhihsa Kobayashi said: "It seems like that fiction is becoming a reality."

From http://news.ft.com/ 09/20/2002

Japan: Nation's Tax Revenue Down 17.4 %

Japan's tax revenue fell 17.4 percent to about 3.81 trillion yen in July from the year earlier for the 11th consecutive monthly decline, the Finance Ministry said Monday. The figure demonstrates that the sluggish business performance amid the prolonged recession has caused a decline in the nation's tax revenue. By type of taxes, revenue from income tax plummeted 17.1 percent because of a sharp fall in bonuses paid to salaried workers. Moreover, the government refunded 500 billion yen in corporate tax to corporations that settled their accounts last March because of a sharp decline in profits.

From http://mdn.mainichi.co.jp/ 09/02/2002

Nikkei Index at Its Lowest in 19 Years

Plummeting share prices on the Tokyo Stock Exchange on Tuesday meant more bad news for banks and institutional investors trying to shed their cross-shareholdings. The Nikkei 225 index stood at 9,217.04 at the close, the lowest in 19 years, leading analysts to fear an even deeper plunge resulting in unrealized losses for Japanese banks, life insurance companies and other shareholders. The Nikkei lost 304.59 points, and the broader TOPIX index of all First Section issues fell 26.12 points from Monday, to 904.24. On paper, shares listed on the First Section have lost about 13 percent in the last six months to 259.21 trillion yen, or about 332 trillion yen less than their value in December 1989, when capital inflation drove the Nikkei index to an all-time high. Banks, which tumbled in Tuesday trading, are imperiled by potential unrealized losses, since they are major shareholders of their troubled corporate clients. The Tuesday plunge will burden banks beset by hulking bad loans and will also create unrealized losses for nine big life insurance companies. The Tokyo Stock Exchange's plunge is expected to result in horrible half-year reports for banks, which could prolong the drive to write off their bad loans, in turn increasing uncertainty over the nation's economic prospects, according to a trader at a leading securities firm. Daiwa Institute of Research estimates the unrealized losses on holdings by key banks have swelled to 4.07 trillion yen in recent days. Unrealized losses from interlocking shareholdings by 12 major banks totaled 1.14 trillion yen at the end of June, when the Nikkei index hit 10,621-about 1,400 yen higher than Tuesday's closing. Nippon Steel Corp., which showed about 50 billion yen in unrealized losses from plunging bank shares in the last fiscal year, anticipates worse capital fallout. Analysts say the domestic plunge was fueled by a drop on European exchanges and the rising value of the yen, which hurt export-oriented companies, such as automakers and electronics manufacturers. Many companies are trying to sell off their cross-shareholdings in business partners before the fiscal half-year settlement at the end of the month.

From http://www.asahi.com/ 09/04/2002

Central Bank in Japan Will Buy Stocks From Banks

TOKYO Under political pressure to bail out the financial industry in the country, the Bank of Japan said Wednesday that it planned to buy stocks from banks, an unparalleled move that analysts said could undermine the bank's credibility. .The central bank's policy board said shares held by banks were "a significant destabilizing factor" for the financial system and said reducing such risk was an "urgent" task. .Speaking later with reporters, the Bank of Japan's governor, Masaru Hayami, said, "Japanese banks have a lot of shares, and as the central bank, we want to help them reduce the impact of falling stocks." .The announcement, which followed a two-day policy board meeting, represented a sharp reversal of the central bank's stance on the cleanup of the Japanese financial sector. Hayami has long argued that the central bank had already done as much as it could by lowering interest rates to zero. Lawmakers, he has said, were at fault for not doing more to help the banks. .Significantly, the bank's decision came a day before the government was to announce details of an "anti-deflation" package to raise stock prices and stabilize the financial industry. Analysts said the timing of the two events suggested that central bankers and leading policymakers privately had worked out a deal. ."We potentially have the long-awaited coordinated effort to stabilize the financial system and ultimately to combat deflation," said Ryo Hino, an economist at J.P. Morgan Securities in Tokyo. .The Bank of Japan's decision was also groundbreaking because central banks, as custodians of national currencies, often shun equities in favor of bonds and other more stable investments. If the market suspects the bank will lose money on its stock purchases, the yen could fall. But lawmakers, worried that the weak stock market could debilitate the banks, have publicly called on the Bank of Japan to buy stocks in recent weeks. Several politicians also renewed threats to rewrite the Bank of Japan Law to gut the central bank's independence. .The government was stirred into action when the stock market fell to 19-year lows this month. When the fiscal half-year ends Sept. 30, banks will have to reassess their stock portfolios at prevailing market prices. With stocks at current levels, Japan's largest banks would be forced to book more than $30 billion in losses.

From http://www.iht.com/ 09/19/2002

China Surpasses US As World's Most Attractive Investment

China has for the first time supplanted the US as the most attractive destination for foreign direct investment, according to senior executives of the world's largest companies. Chief executives and chief financial officers are attracted by the size of China's market, the vibrancy of its economy, and the perception that there are few competitors with entrenched positions. But they are also disillusioned with the US as the world's most dynamic economy. Executives responding to an annual survey by AT Kearney, the consultancy, expressed growing concerns over the security of investments in the US. For the first time since the Asian crisis of 1997/98, executives said they were less likely to consider investing abroad. Although confidence in the global economy has improved since the September 11 attacks, interest in foreign investment remains subdued. In previous years, the survey has proved to be a good predictor of trends in foreign direct investment. Figures from the United Nations Conference on Trade and Development last week confirmed the conclusion of AT Kearney's survey of 2001, which warned of waning investor confidence. UNCTAD reported that foreign direct investment more than halved last year, falling to $735bn (?73bn) worldwide. The largest reduction was in industrial countries, with only modest declines in FDI flows to the developing world. In 2001, China attracted just under $50bn FDI compared with $125bn going to the US. But while foreign investment levels in China were growing, the level of FDI in the US fell from $301bn in 2000. Beijing's ability to attract investment has increased despite many companies being disappointed by operating in China. Paul Laudicina, managing director of AT Kearney's global business policy council, said: "Investors have great confidence in the Chinese government and its administrative ability in spite of the fact that many investors were not meeting their profitability targets." China's entry into the World Trade Organisation, its rapid economic growth and the prospects of a huge market are tempting for many executives. Former communist countries also scored highly in the survey. Russia moved up the rankings from 32nd to 17th, while Hungary, the Czech Republic and Poland also improved their position.

From http://news.ft.com/ 09/20/2002

Size of Public Funds Grows

The total amount of public funds injected into the financial and business sectors increased to W157 trillion as of the end of August. Of that total, however, only W50 trillion has been recovered. The money has been pumped into the sectors to bail out financial institutions and businesses that have been struggling since the 1997 financial crisis. According the Ministry of Finance and Economy on Tuesday, the total amount of public funds rose toW157 trillion, due to the government's spending of W3.9 billion on equity investments for mutual savings banks and W24.9 billion in deposit payments for credit unions in August.

From http://srch.chosun.com/ 09/24/2002

Public Funds Ruled Out for Japanese Banks

The Japanese banking system does not need an injection of public funds because banks are making steady progress in dealing with their non-performing loans, according to Hakuo Yanagisawa, minister in charge of the Financial Service Agency (FSA).Japanese banks had plans to remove 10,000bn (52bn) worth of non-performing loans in the year to next March and were well on their way to completing their bad debt disposals by March 2005, he said in a video conference to US and Japanese finance officials, economists and bankers meeting in Virginia at the weekend. "It is a mistake to discuss the injection of public funds as part of macroeconomic policy," he said. Mr Yanagisawa's comments suggest the Japanese government will have difficulty agreeing measures for its comprehensive programme to accelerate bad debt disposals which Junichiro Koizumi, prime minister, said on Friday would be announced next month. There have been calls for more aggressive measures to deal with Japan's bad loan problem, including using public funds. The Council on Economic and Fiscal Policy, the government's most senior advisory panel, on Friday urged a comprehensive programme to accelerate bad debt disposals. Members of the council, representing the private sector, want more stringent assessment of bad loans held by Japanese banks, faster disposal of bad loans and recapitalisation of the banks, all of which point to an injection of public funds. The Bank of Japan, which last week announced plans to support the stock market by buying shares from banks in an effort to reduce their massive shareholdings, also plans to conduct an assessment of the level of bad debts. The central bank is expected to buy between 1,000bn and 3,000bn of shares in an unprecedented move that highlights its concerns about the impact of the weak market on the financial system. The ruling Liberal Democratic party's special committee dealing with deflation also urged the FSA to inject public funds into the banks. However, as Mr Yanagisawa's comments indicate, the FSA could veto calls for more aggressive action. The FSA, which is responsible for inspecting banks, has insisted that Japan's banks are not in need of public funds.

From http://news.ft.com/ 09/22/2002

Boj Takes Gamble to Avert Financial Crisis

Japan's central bank is trying to shock the government and banks into action in a last-ditch gamble to avert a crisis in the country's financial system, a senior Bank of Japan official said on Tuesday. The bank's announcement last week that it would buy shares from financial institutions was a high-risk move driven by its increasing frustration at government inaction, the official added. "This is our independent decision based on our serious concern about the state of the financial system," said the official. "We are well aware of the risks to our balance sheet. We never meant to do this. But unusual circumstances call for unusual measures." Although the Japanese banking system has been battling for years under the weight of huge bad debts, the BoJ believes it is now on the brink of a full-blown crisis that could have a serious impact on the global economy. "We think that now might be the last chance. We should have done this six months or a year ago," said the official. Last week the BoJ stunned markets by announcing it would purchase shares from banks to allow them to accelerate the disposal of trillions of yen in bad loans. Share purchases, up to a total of about 3,000bn (?24.8bn), will start in the next few weeks and continue for up to two years. The BoJ is prepared for the possibility of losses deriving from a further fall in equity prices. Banks have been told to unwind their cross-shareholdings, but their need to offload shares has helped drive stock markets towards 20-year lows. There is no guarantee that banks will sell shares at depressed levels to the BoJ. "We are not 100 per cent sure that this approach will work. It's a big gamble," the official said. Nor is it clear how the government will respond. Share prices fell last week when Junichiro Koizumi, prime minister, made it clear he did not have any specific measures to complement the BoJ's action. "The response by the government to [previous] warnings by the BoJ has been lukewarm," said the official. ( by David Pilling)

From http://news.ft.com/ 09/24/2002

IMF Calls on Japan to End Deflation within 18 Months

WASHINGTON (Kyodo) The International Monetary Fund urged Japan on Wednesday to end deflation within 18 months with a more aggressive monetary policy and an injection of public funds into viable banks. In its semiannual World Economic Outlook report, the IMF revised upward its estimate of economic growth in Japan to a contraction of 0.5 percent for 2002 from the 1 percent shrinkage projected in the previous report in April. It predicted an expansion of 1.1 percent for 2003 from the earlier projected growth of 0.8 percent. The Washington-based institution said however that Japan needs to fix its bad-loan problems and end deflation to ignite sustainable economic growth. It is vital for Japan to serve as an engine for the world economy amid growing concerns over the sustainability of the U.S.-led global recovery, it said. The IMF pressed Japan to expand its "quantitative" monetary easing and tackle deflation with a sense of urgency by setting a deadline. "A more aggressive monetary stimulus is needed to support economic activity, comprising a public commitment to end deflation in no more than 12 to 18 months, backed by further quantitative easing," the report says. "The recent appreciation of the yen bolsters the case for further easing, as it will negatively affect activity and prices if sustained." In March 2001, the Bank of Japan announced it was easing monetary policy by shifting its operating target from the key overnight bank lending rate -- already near zero -- to current account balances held by financial institutions at the central bank. Under quantitative monetary easing, the BOJ has raised the current-account balance target level several times to increase liquidity in the banking system. The IMF also urged Japan to break the vicious cycle in which unrecognized bad loans make banks unwilling to lend, hurting financial intermediation and corporate activity, and thereby creating new nonperforming loans to replace those being written off. The Japanese government should "recapitalize viable banks, possibly using public funds, but subject to strong conditionality," it says. A resolution of the bad-loan issue is a prerequisite for the planned removal of full government refund guarantees on ordinary bank deposits in April, the IMF said. The government is considering postponing the refund limit until September. The IMF criticized the government for lacking decisive action to revitalize the long sluggish economy. and called for drastic reforms. "Over the last decade, the authorities have adopted a gradualist approach to reform, rather than taking decisive action to solve long-standing structural weaknesses exposed by the bursting of the asset price bubble in the early 1990s." While stressing the need to rebuild strained national finances over the medium term, the IMF suggested Japan compile a supplementary budget if the economic situation deteriorates. Economic reforms could have adverse effects on the economy in the short run, including a rise in unemployment through accelerated corporate restructuring. The IMF, meanwhile, was less upbeat on the global economy than it was in April. Citing such factors as sharp falls in global stock markets since the end of March, accompanied with a depreciation of the dollar, the IMF said "concerns about the pace and sustainability of the recovery have risen significantly." In particular, the IMF said the recovery in the United States, which has led the global recovery, is now expected to be "considerably weaker than earlier thought." The IMF left its estimate of global economic growth in 2002 unchanged at 2.8 percent but lowered its 2003 growth projection to 3.7 percent from 4 percent. The growth estimate for the U.S. economy is now 2.2 percent for 2002, down from 2.3 percent, and 2.6 percent for 2003, down from 3.4 percent.

From http://www.japantimes.co.jp/ 09/26/2002

Banks Urged to Improve Financial Health

Financial regulators have decided to instruct domestic banks to expand their capital base, in a move to improve their financial soundness, while forcing them to mobilize profits to increase their capital adequacy ratios. An official at the Financial Supervisory Service (FSS) said yesterday that the financial watchdog has mapped out a plan to make local banks increase their ``core capital'' within this year in order to upgrade their financial structure. He explained that domestic banks' financial structure is more vulnerable to shocks and changes from the outside compared with financial institutions in advanced countries such as the United States. Core capital refers to the capital a financial institution must possess in order to comply with financial regulations. Core capital, a barometer for the soundness of a financial structure, consists of surplus and capital, which is differentiated from ``supplementary capital,'' composed of subordinate bonds and loan-loss reserves. The financial watchdog said it would instruct banks to increase capital as early as possible, taking into consideration the state of local stock markets. The FSS also said this would be taken into consideration in its evaluation of banks' management status. According to data compiled by the FSS, Korea First Bank posted the highest core capital ratio at the end of March, with 8.65 percent, followed by Shinhan with 7.86 percent, Daegu with 7.63 percent, Kookmin with 7.26 percent, Jeju with 7.01 percent and Kyongnam with 7 percent. The comparable ratio at other banks was below 7 percent: Hanvit (6.80 percent), Jeonbuk (6.55 percent), Hana (6.48 percent), Chohung (6.45 percent), Koram (5.74 percent), Kwangju (5.58 percent), Seoul (5.51 percent) and Korea Exchange Bank (5 percent). The financial watchdog said this stands in stark contrast to the core capital ratios of major banks in advanced nations, which often surpass 10 percent. The FSS is also poised to drive banks to accumulate reserve funds in addition to loan-loss provisions, as do listed corporations, by introducing an ``accumulation system,'' which has yet to be applied to the banking sector. In the context of corporate finance, the term ``accumulation system'' refers to profits that are added to the capital base of a company rather than paid out as dividends. Current law stipulates that a listed company should accumulate 10 percent of annual net profits unless its Bank for International Settlement capital adequacy ratio reaches 30 percent or higher. At the same time, the FSS is currently pushing for a plan to have banks set aside more loss reserves for loans extended to corporations. ``If local banks focus primarily on boosting short-term gains in a situation when the long-term profit structure and financial structures remain weak, chances are high that banks will see their profits drain out before normalizing financial structures due to growing pressures from shareholders to pay out dividends,'' the FSS official said. In May, Moody's Investors Service, the U.S.-based credit rating agency, gave domestic banks a grade of ``D minus'' for financial soundness, placing the nation's banking industry 70th of 79 countries evaluated _ below Mexico (38th), Malaysia (51st) and the Philippines (64th). (By Kim Jae-kyoung)

From http://search.hankooki.com/ 09/01/2002

Bad Loan Trade Cause Huge Losses for State Agency

A bad-loan disposal subsidiary of the Korea Deposit Insurance Corp (KDIC), the state financial-sector restructuring agency, has lost W5.5 trillion through its liquidation procedures for the non-performing debts of banks and insurance firms. Rep. Ahn Dae-ryun, of the minor opposition party United Liberal Democrats, unveiled on Monday statistics that he claimed were acquired from the subsidiary, showing that Liquidation Finance Co.'s total losses from underselling the bad debts reached W5.54 trillion by the end of June. KDIC set up the subsidiary, Liquidation Finance Co., in December 1999. Since its inauguration, the KDIC unit has purchased a total of W19.75 trillion in non-performing loans from financial organizations and sold them for only W14.21 trillion, incurring massive losses. Ahn claimed that the loss was attributable to the subsidiary's purchases of such bad loans at their book value instead of market value. KDIC officials said that the losses were inevitable, because in the case of Korea First Bank, the agency had to take over the bank's bad debts at their book value according to a "put-back contract," under which the government had to buy the bank's bad loans that would turn sour after the takeover, over a two-year period.

From http://srch.chosun.com/09/24/2002

Budget Proposal Hits W111.7 Trillion

The government has proposed a general budget for next year of W111.7 trillion, up 1.9 percent over this year's main and supplementary budgets. The budget increase ratio increases by 5.5 percent if the supplementary budget, set up mainly to pay for disaster relief for Typhoon Rusa, is excluded. In a cabinet meeting held Tuesday, the government confirmed the budget proposal for the fiscal year 2003, which will be submitted to the National Assembly early next month. In terms of tax revenue, the new budget estimates that the government will collect a total of W103.16 trillion in taxes, up 10 percent over this year. The figure accounts for about W3 million per capita in tax payments next year, up by W290,000 from this year. For a four-member family, the total tax payment is expected to go over W12 million. Taxing individuals over W3 million marks a record high in the country's history. The total expected tax revenue for central and provincial governments is likely to reach 22.6 percent of the nation's Gross Domestic Product (GDP), slightly over this year's 22.5 percent. Government sources said the 1.9 percent increase in the budget next year, compared to about 10 percent growth in tax revenue, has been planned to achieve a balanced budget next year. It will be the first balanced budget since the 1997 financial crisis. Critics, however, argued that the target for realizing a balanced budget next year, requiring stringent government spending, is overstretched. They say the Kim Dae-jung administration had committed itself to balancing the budget within his tenure and that the budget for next year ignores various realistic market conditions in order to reach this target. By sector, W24.37 trillion has been earmarked for the educational sector, up 8.2 percent year-on-year; W22.62 trillion for personnel expenses, up 8.6 percent; W17.4 trillion for defense, up 6.4 percent; W16.75 trillion for social overhead capital projects, up 6.4 percent; W10.92 trillion for social welfare, up 9.3 percent; and W5.25 trillion for research and development, up 6.1 percent. The unification and foreign affairs budget next year is set to shrink by 16.8 percent from this year, as the government is likely to cut back its funding for inter-Korean economic cooperation. The main budget for next year is to increase to W183.1 trillion when counting in the 22 special budgets for next year, totaling W71.4 trillion, up 5.3 percent over this year. (by Sunwoo Jung)

From http://english.chosun.com/ 09/24/2002

Koizumi Backs BOJ Bad-Loan Disposal Measures

Prime Minister Junichiro Koizumi said Thursday the government will take every possible measure in cooperation with the Bank of Japan to accelerate the disposal of nonperforming loans and prevent a financial crisis. However, he said there is no silver bullet to end deflation. "The disposal of nonperforming loans is a key pillar to overcoming deflation," Koizumi said in a speech at a Tokyo hotel. "And I will accelerate the disposal to normalize the situation in fiscal 2005 as planned." The BOJ said Wednesday it will consider directly purchasing shares held by more than a dozen Japanese banks to protect them from fluctuations in share prices. The surprise BOJ move -- unprecedented and abnormal for a central bank of any major industrialized economy -- has been greeted with mixed reactions even within Koizumi's government and the ruling coalition. Despite being welcomed by Financial Services Minister Hakuo Yanagisawa and Finance Minister Masajuro Shiokawa, Heizo Takenaka -- the economic and fiscal policy minister -- said the BOJ should have explored conventional policy tools to boost the money supply. Which is unusual, considering that both he and Shiokawa had just weeks ago urged the BOJ to take the unorthodox step of using public pension and postal savings money to invest in exchange-traded funds (ETFs) -- an illegal transaction for the central bank. Taro Aso, chairman of the Policy Research Council of the Liberal Democratic Party, also blasted the BOJ's move. "It will cause many problems," he told reporters. "The BOJ should take responsibility for when it acts independently from the government." Basic problems remainWASHINGTON (Kyodo) The proposed purchase of stocks from commercial banks by the Bank of Japan will probably not resolve Japan's basic economic problems, a former U.S. Treasury assistant secretary said Wednesday. "I think one has to view this as a sign of how serious the problems are in Japan," Charles Dallara, managing director of the Institute of International Finance, said at a news conference. "But this does not to me sound like . . . a fundamental solution." Asked for his opinion on the BOJ plan, Dallara said Japan needs to instead accelerate the disposal of bad loans by banks and deregulate to get out of the doldrums. "In my view, the answer lies more in the direction of aggressive resolution of problems which linger over the financial sector, more in the direction of further liberalization," he said. FT slams BOJ planLONDON (Kyodo) The Bank of Japan's plan to buy shares held by banks lacks policy coherency and does not provide a fundamental solution for bolstering the banking system, the Financial Times said Thursday. "The BOJ's latest measures smack more of desperate expediency than joined-up policymaking -- and for that very reason may well have the opposite effect to the one intended," the British economic daily said in its editorial. "Longer term, outside investors are likely to be alarmed, rather than comforted, by the bank's move." The paper conceded that the central bank, having exhausted all orthodox policy measures to fight deflation, needs to resort to unorthodox measures. But it added, "Unfortunately, this does not seem to be the case -- at least judging by the bank's stated intentions and the reaction of other Japanese policymakers." The BOJ's measures are designed to be "a tactical fix to bolster the banks' balance sheets, rather than representing any strategic change of policy," the newspaper said. "Even from a pragmatic viewpoint, though, the BOJ's plan lacks coherence, amounting to little more than a covert form of off-balance-sheet subsidy," it also said. "Who is to decide which shares to buy and when to sell? This is to be a murky process, fraught with risks of manipulation."

From http://www.japantimes.com/ 09/20/2002

TOP

Singapore: Banks Wary of Extra Loans under New Lending Rules

AS banks pull out all the stops to win new home loans and retain existing borrowers, they are also shying away from courting additional business allowed under the new lending rules announced last month. Banks say the prudent approach is necessary because of the risks involved. But this is likely to come as a disappointment to small businesses or budding entrepreneurs who were counting on being able to raise finance for their businesses more easily and cheaply.

From http://business-times.asia1.com.sg/ 09/06/2002

Indonesian Risk Professional Association Established in Jakarta

JAKARTA (JP): Several financial professionals established here on Thursday the Indonesian Professional Risk Association (IRPA). The risk management forum is a professional organization that is proactive in giving risk management input and has a vision to encourage the implementation of risk management in the national financial service industry. Its membership consists of an optimal combination of three professional groups in risk management, namely a practitioner in the financial service industry, academicians and consultants, and others supporting financial service institutions. "This association will be an exchange forum for thoughts and experiences of professionals in the field of risk management to match the perceptions of risk management with maintaining operational activities so as to avoid any losses which would exceed the abilities of the financial service industry," said I Wayan Pugeg, the chairman of the IRPA Executive Board, in a press release. (by Darul Aqsha)

From http://www.thejakartapost.com/ 09/19/2002

Malaysia: Tough Competition in Attracting FDIs

Malaysia is currently facing stiff competition from other countries in enticing foreign direct investment (FDI) following the incentives offered by these countries. "There are countries which offer special incentives based on their capabilities in order to attract investments," parliamentary secretary to the Ministry of International Trade and Industry Datuk Fu Ah Kiow said in his reply to a question posed by Dr James Dawos Mamit (BN-Mambong) at the Dewan Rakyat here Wednesday. For example, Singapore offers a RM152 million grant to foreign investors to set up factories there while the US offers free land and Australia provides RM208 millon grant, he said. With such attractive incentives, some investors who had initially chosen to invest in Malaysia, shifted to other countries. Fu said that Malaysia has also introduced new incentives to attract foreign investors. However, Malaysia's capability to offer incentives to foreign investors was limited. Responding to a supplementary question from Datuk Seri Abdul Hadi Awang (Pas-Marang), Fu said that the issue of other countries wanting to sabotage Malaysia by offering better incentives did not arise. He said it was a fact that in this capitalist world all countries would try to offer attractive packages and incentives to attract investments. "All will try to attract investments, sometimes we win, sometimes we lose and in the past we have managed to attract investors to Malaysia," he said. He said that the country should have a positive attitude by continuing to increase competitiveness to attract foreign investors.

From http://www.dailyexpress.com/ 09/12/2002

Philippines: Anti-Poverty Bank for ASEAN Urged

Speaker Jose de Venecia, head of the Philippine delegation to the 23rd ASEAN Inter-Parliamentary Organization (AIPO) General Assembly in Vietnam, pushed yesterday for the creation of an ASEAN Anti-Poverty Bank that would ease the adverse effects of globalization among Asia's poorest people and remove one of the major factors that have caused the upsurge of terrorism. In an information dispatch sent from Hanoi, the Philippine delegation also revealed that it has proposed the expansion of the trilateral anti-terrorist agreement among the Philippines, Indonesia, and Malaysia to include the six North and Central Asian states grouped under the Shanghai Cooperation Organization. Under the proposed pact, cooperative efforts between the Shanghai Six and the ASEANB tripower would be ensured to block terrorist efforts sourced from Central and Russia in the campaign against international terrorism. Aside from China and Russia, other members of the Shanghai Six include Kazakhstan, Krygyztan, Tajikistan, and Uzbekistan. The twin proposals submitted by De Venecia followed an earlier initiative of the House leader for the creation of an ASEAN Parliament to be patterned after the European parliament that has been credited with the stability and economic progress in the continent. De Venecia said the regional Parliament would hasten the economic and political integration of the region as countries around the world are "turning increasingly toward unification." He explained that globalization, far from lifting the lives of the region's poorest peoples, "has done far less to raise their incomes than ASEAN's political and economic leaders had hoped." He pointed out that despite the round of multilateral market-opening negotiations within the World Trade Organization, ASEAN economies have continued to feel the ill-effects of the 1997 East Asian financial meltdown. "That nerve-wrecking economic debacle continues to prevent most nations from fully returning to the path of sustained recover ad growth, thus setting back efforts to wipe out mass poverty among their peoples, not excluding the Philippines," the Philippine resolution said. The creation of the anti-poverty bank was initially proposed by De Venecia early this year. It was adopted by President Gloria Macapagal Arroyo and presented last July as the Philippine government proposal at the 35th ASEAN Ministerial Meeting in Brunei. In his opening speech at the Hanoi assembly, De Venecia sought support for the anti-poverty bank from the region's parliaments. The proposal, he said, has been tabled for discussion by the ASEAN Finance Ministers and the ASEAN Ministers Responsible for Rural Development and Poverty Eradication. De Venecia said ASEAN nations "are fully aware that mass poverty in the developing countries is the breeding ground for international terrorism." The proposed bank, he said, would fund national anti-poverty measures supported by the G7 countries and the European Union, as well as by China and South Korea and is expected to push economic efforts to alleviate deprivation and want in the ASEAN region. "Micro-lending for the poor of the retioin will unleash their entrepreneurial potential," he said. He also advocated an exchange of best legislation among ASEAN's parliaments to fight terrorism, the drug cartels, transnational crimes, and address the moral imperatives of human rights and migration. Immediately after the Sept. 11 terrorist attacks in the US, De Venecia initiated a trilateral agreement, signed on May 27, 2002, among the government of the Philippines, Malaysia and Indonesia, to combat jointly international terrorism and other cross-border crimes. (by Ben R. Rosario)

From http://www.mb.com.ph/ 09/10/2002

Indonesia: Cleaning Up the Banks

Bank Indonesia (the central bank) is right in persistently pushing ahead with its efforts to reduce the number of non-performing loans (NPls) in the banking industry to a maximum of 5 percent of outstanding loans by the end of 2002.But the central bank is also wise in not blindly following the timetable for the enforcement of the minimum 12 percent capital adequacy ratio (CAR) requirement based on the new Basel Capital Accord being developed by the Bank for International Settlements. After all, even the developed economies with already well-established banking industries will only begin applying the new capital adequacy standards in 2006. In the present circumstances where all large domestic banks are still weak and dependent on interest income from government bonds for almost 50 percent of their revenues, the central bank should be realistic. Insisting on adopting the new capital standard accords, which revise the internal ratings-based (IRB) approach to credit risks to include operational and market risks, might force banks to resort to artificial risk-weighting of their transactions. What is the use of trying to show the international financial markets that our banks have met the international guidelines if in reality their capital adequacy ratios are merely cosmetic? This is, however, not to suggest that banks should be allowed to operate with weak capital ratios. But the minimum 8 percent CAR requirement currently being enforced could well be adequate, given the present circumstances, if real ratios are revealed that result from true risk-weighting of assets and are then tightly monitored under an effective supervisory mechanism. Moreover, even within the Basel Committee of the Bank for International Settlements, the debate is still going on about the definition of market and operational risks in view of the unique characteristics of national markets. But enforcing the minimum 5 percent NPL level under more stringent rules is a must in light of the need to develop a sound banking industry. Even achieving this target has proved to be an uphill task in spite of the massive cleansing of the industry of bad loans in 1998 and 1999, when all the largest national banks had to be recapitalized by the government with bonds. Latest Bank Indonesia data shows that industry-wide, NPLs still averaged 12.4 percent as of June. More than 33 banks were burdened with NPLs as high as 35 percent, and there is a high risk that more than 40 percent of the 148 banks in the country may not be able to achieve the maximum 5 percent NPL target later this year. It is indeed most imperative now to minimize NPLs to allow banks to devote more resources to viably marketing loans to the corporate sector. The 1997/1998 banking crisis destroyed highly valuable bank assets in the form of reliable data banks on creditworthy borrowers, as well as the trust between the corporate sector and the banking industry. It is now high time for banks to allocate more resources to rebuilding this trust and to developing a more reliable credit information system. Otherwise, banks will never be able to resume a full-fledged intermediation role. The conditions now are more conducive for restructuring bad loans and extending new credits since overall economic risks have been decreasing as a result of the relative stability in the political situation and rupiah exchange rate, as well as reduced inflationary pressures. Previously, instability in almost all sectors made it virtually impossible to reasonably assess business plans in the light of loan restructuring or new credit assessment. However, under more flexible CAR rules, it is most imperative for the central bank to steadily improve the effectiveness of its bank supervisory mechanism to ensure the sort of high-quality financial reporting that is essential for the efficiency and stability of the financial system. The growing capacity for financial engineering and innovation, as revealed in several cases of aggressive accounting and corporate fraud that were uncovered recently in the United States, requires the central bank to put more emphasis on qualitative supervisory oversight. But this is possible only if banks are subject to stringent disclosure requirements that force them to always issue meaningful and reliable financial and operational reporting. It goes without saying that the financial information issued by banks and other corporations has a signaling function in that it facilitates the identification of the most productive use of economic resources, thereby enabling reliable assessment of prospective returns and risks.

From http://www.thejakartapost.com/ 09/17/2002

Vietnam Acts to Boost Stock Market

HANOI, Vietnam (AP) -- In a move to boost the country's falling bourse, Vietnam will guarantee that overseas investors can exchange their stock market profits into U.S. dollars, officials said Monday. A new regulation, which takes effect September 28, promises both individual and institutional investors from abroad that all their stock profits will be convertible into dollars, a central bank official said. The official, who spoke on condition of anonymity, said the new policy was aimed at encouraging more offshore investors to enter the country's stock market. Previously, there was no written policy on repatriation of profits -- a situation which the government believes may have caused potential investors to shy away. Opened in July 2000 A State Securities Commission executive said Vietnam's stock market, which opened in July 2000, needs to attract more investors to develop further. The market index has fallen 12 percent over the last four months because of the departure of many domestic investors, who have limited financial capabilities, the executive said on condition of anonymity. Vietnam's stock market has 19 listings so far, nine of which made their debut this year. The State Securities Commission said it aims to have 25 listings by the end of 2002.

From http://asia.cnn.com/ 09/16/2002

Singapore to Boost Finance and Medical Hub Status

EXPORT-DEPENDENT Singapore accelerated efforts to reposition key industries on Wednesday by stressing the need to tap foreign capital and business. Three groups under the Economic Review Committee (ERC) proposed that the city state look beyond its small borders to capture potential business in financial, healthcare and legal services. Singapore, which stepped out of its worst recession in four decades this year, is rushing to diversify away from manufacturing to more knowledge-based industries. The financial services group suggested that the central bank and Government Investment Corporation (GIC) increase the scope and size of assets for management by Singapore-based funds to speed up the city state's push to become a fund management hub. Singapore-based fund managers may get to manage billions of dollars more in state funds, including pensions, if proposals by the government-led panel are put into place. Tax cuts to lure investors, coupled with legal changes to attract private equity and hedge funds, would help offset a shrinking foreign exchange market, the panel said. The policy to get more government funds to be managed in Singapore has been going on since 1997, when the GIC and the Monetary Authority of Singapore announced plans to place some S$35 billion (US$19.7 billion) with fund managers over three years. The GIC's target was not met within the timeframe due to the Asian financial crisis in 1997/98. But the government agency, which manages Singapore's reserves of more than US$100 billion, had said it should meet the target by 2003. "Since the Asian financial crisis, the government has been careful about how they allocate their monies," Robert Stein, chairman of the panel comprising public and private sector experts told Reuters after the news conference. RISK EXCHANGE Stein said the government can provide seed capital or take equity stakes in start-ups and small- and medium-sized fund managers to help develop asset management activities. The other major thrust of the panel's recommendations was designed to promote Singapore as a place for financial institutions to centralise back office processing activities. The panel also recommended developing an Asian risk exchange for banks and insurers, who could offload risk using instruments such as credit default swaps and asset-backed bonds. To recapture its position as a healthcare hub, another committee said Singapore needed to market its clinical expertise and expand its base of foreign patients. The aim was to increase the number of foreign patients to one million per annum by 2012, which would add about one percent to gross domestic product at that time, the group said. The group forecast that this would create 13,000 new jobs, largely in the medical, nursing and paramedical professions. "Singapore has historically been the healthcare hub for patients and professionals from the region," Loo Choon Yong, chairman of the healthcare services working group, told a news conference. But he said healthcare providers elsewhere in the region were catching up and competing with local hospitals. A third panel recommended incentives to boost in-house counsels in multinational companies and getting local law firms and lawyers to expand legal work abroad and to China. Singapore should aim to become an important dispute resolution centre and to increase the volume and quality of legal work flowing in and out of the country. The recommendations from the various committees will only be reviewed for approval by the government next year. (by Jacqueline Wong)

From http://www.singapore-window.org/ 09/18/2002

Banks Have to Do More to Step Up Security

BANKS here have not yet been able to comply with all the tightened security measures spelt out by the Monetary Authority of Singapore (MAS) to make online transactions safer. Among these measures is the addition of another layer of checks, such as asking users to key in a second authorisation code, on top of their own password. Yesterday, an MAS spokesman told The Straits Times that these measures were a result of lessons learnt from the hacking incident involving DBS Bank. In June, a hacker broke into 21 DBS accounts with stolen passwords and siphoned off $62,000 in an hour. The incident showed that current online security measures are still lacking and that users' ID and passwords are no longer enough. For most home users, this extra step means another randomly generated string of numbers will be sent to them before they can bank online. Currently, if customers want to transfer money electronically to another bank account, they can establish the link immediately with some banks. In the case of United Overseas Bank, the link will be established only after users provide their birth dates as verification. Under the new guidelines, the bank will send to its customers - either via 'snail mail' or by telephone - a series of random numbers that they have to type in before they can create the link to the other account. This means that customers will need a new string of numbers or letters every time they want to carry out a new transaction. This way, even if a hacker gets hold of these numbers, they won't work if they have been used before. While MAS did not specify which kinds of transactions need this extra layer of checks, the new guidelines, released two days ago, maintain that the banks must securely generate, store and process these, 'whenever and wherever they are required'. The spokesman said 'reasonable time will be provided for banks to comply' with the new changes. Some transactions which require even higher security could be those in corporate banking which involve large sums of money. According to MAS, these can take the form of physical tokens or digital certificates. Most banks already have such checks for high-end transactions. The guidelines also state that banks must spell out very clearly, on their websites, what will happen if a hacker breaks into their customers' accounts. For such cases, they must say what process will be used to settle the problem and be more upfront as to responsibility, liability and even compensation. On the websites, banks must help and show customers how to bank online safely. This includes installing and updating anti-virus software and not installing programs from an unknown source. An OCBC Bank spokesman confirmed that the bank was already providing tips on good safety practices on its website. MAS said it would conduct investigations to ensure that the guidelines were met and that 'appropriate supervisory action will be taken where necessary'. While the measures will enhance online security, some regular users balked at the idea of requesting and using a new code every time they needed to do a transaction. Said Mr Gary Choong, 28, a researcher with a consultancy firm: 'I guess we are so used to doing everything instantly, we will interpret this as moving backwards because we will have to wait for the new code each time we want to do anything. (by Natalie Soh)'

From http://straitstimes.asia1.com.sg/ 09/19/2002

UOB Joins Tie-Up to Invest in High-Growth China Firms

UNITED Overseas Bank (UOB) is investing 60 million yuan (S$12.6 million) to set up an investment company in Beijing which will invest in Chinese companies with high growth potential. UOB said yesterday that its wholly owned subsidiary, UOB Venture Management Shanghai, entered into a joint-venture agreement with China-based Oxford Cambridge Investment Group and Shandong Hi-Tech Investment Company to establish the investment company on Tuesday. The company will 'seek to invest in Chinese companies that have potential to achieve high growth over a medium- to long-term period', the statement said. 'These companies are likely to be those in high-growth technology sectors and traditional industries that are adopting a new technology in their production process.' The investment company will be formed with an initial capital of 300 million yuan, with UOB contributing 20 per cent. UOB deputy chairman Wee Ee Cheong said: 'We are optimistic about the private equity business in China as Chinese enterprises are increasingly looking to this form of financing.' The investment company will appoint a consultancy company to source, evaluate and recommend investments.

From http://straitstimes.asia1.com.sg/ 09/21/2002

New Lending by Thai Commercial Banks Turns Positive

New lending by Thailand's commercial banks rose by 2 percent in the first half of this year,the first time the figure turned positive in five years, accordingto a report of the Bank of Thailand (BOT) available Tuesday. New net lending calculated by subtracting newly-provided loans from those repaid increased by 2 percent in the first half of 2002.It is the first time since 1997 that the lending turned positive, the report said. The rise in lending was attributed to the improvement in the overall economy and the easing of criteria on the calculation of NPLs. The central bank's Governor Pridiyathorn Devakula was quoted assaying that he had discussed with the banks' executives ways to oversee the banking system. He said efforts to solve the non-performing loan problem in thebanking system had begun to gain momentum. BOT wanted commercial banks to accelerate lending to customers with good repayment prospect and restructure problem debts at the same time.

From http://news.xinhuanet.com/ 09/24/2002

World Bank Earmarks $3bn Assistance for VN

HA NOI - The World Bank's executive directors discussed on Wednesday the new Viet Nam Country Assistance Strategy (CAS) for 2003-2006, besides approving the appointment of Klaus Rohland to succeed Andrew Steer as Viet Nam country director. The CAS is the World Bank Group's 'Business Plan' and directly draws from the Government's Comprehensive Poverty Reduction and Growth Strategy (CPRGS), which puts poverty reduction and growth at the heart of its development plans. The CPRGS, approved by the Prime Minister in May 2002, was developed in consultation with ministries, agencies, donors, and community groups, and serves a framework for all future World Bank assistance to Viet Nam. The CAS was prepared jointly by the Government of Viet Nam and the World Bank, in consultation with the donor community and NGOs. World Bank vice president for East Asia and Pacific Jemal-ud-din Kassum stated that "the CAS strongly emphasises our desire to work with Governments, donors and NGOs." He said further: "We are working to model a new, more effective partnership approach as Viet Nam moves to the next stage of development. In the next phase we will work vigorously to help Viet Nam achieve its development targets. There is tremendous potential in Viet Nam and we will do all we can to ensure it is realised." "The CAS laysout a program of support of up to US$3 billion," said Andrew Steer. "This is the second largest IDA programme in the world after India, and reflects the extraordinary potential and opportunities in Viet Nam." He believed "Viet Nam, if it stays on the right track, and addresses the challenges lying ahead, can meet its development objectives." The CPRGS sets out three broad objectives. The first of them, to support Viet Nam's transition to a market-economy, will continue to be a central focus of the Bank Group's activities, with a shift in focus from "design" to supporting the Government on "implementation" of reforms. The CAS focuses on financial sector development, state enterprise reform, support for the emerging private sector, corporate governance and private participation in infrastructure. In all these, the IFC, MPDF and MIGA will pitch in to improve the climate for foreign and domestic investment. Deepak Khanna, IFC country manager for Viet Nam said, "the private sector has an important role to play in Viet Nam's development strategy particularly as trade liberalisation and industrialisation accelerate in the near future." To meet the second broad objective - that of enhancing equitable, inclusive and sustainable development - the CPRGS has a six-fold agenda to address future challenges. The Bank Group will actively support the agenda throughout the period of the CAS. Priorities include working with Government on narrowing the development gap of disadvantaged and lagging areas. It also hopes to raise living standards of ethnic minorities, enhance gender equality and status of women, make basic social services accessible to the poor, help people cope with natural disasters and other shocks and enhance environmental sustainability. According to the Bank's lead economist Nisha Agrawal, "the CAS will work to achieve the goals of the CPRGS and to ensure the benefits of Viet Nam's development reach all its citizens. The goals are ambitious, but appropriate, given that nearly a third of the Vietnamese population still lives below the poverty line and structural and governance constraints threaten growth." The third broad field focuses on promoting good governance, under which the Bank will support the Government's efforts to improve public financial management, information and transparency, and enhance legal development. Major technical assistance will be provided in each of these areas, and projects will be undertaken in Public Financial Management, e-Governance, and possibly legal development. To abet these three major objectives, the CAS sets out an assistance programme for the next three years, including analytical and advisory activities and support to projects through the Bank's lending programme. In each of the areas the Bank plans to support, agreements have been reached with the Government and other donors to ensure that ODA is used effectively. The new CAS suggests lending US$300-$760 million per year, directly in support of Viet Nam's Poverty Reduction objectives as laid out in the CPRGS, with focus on four areas: rural development, urban development, infrastructure and human development. The World Bank office in Viet Nam is set to get a new boss in November this year, German Klaus Rohland, as successor to Steer, who moves to Indonesia. A graduate in law and public administration, Rohland joined the Bank in 1981 as a loan officer for Argentina before returning to his native Germany to work in several key economic positions. He rejoined the Bank in 1996 before attaining promotion to his present position.

From http://vietnamnews.vnagency.com.vn/ 09/05/2002

MAS To Banks: Reinforce Internet Banking Security

SINGAPORE -- Three months after a hacker siphoned off S$62,000 from 21 DBS accounts with stolen user-ids and passwords, the Monetary Authority of Singapore (MAS) has asked banks to reinforce their online banking security systems. The central bank of Singapore suggested an extra step to online verification: the adding of another authorisation code in addition to the existing user-ids and personal identification numbers (PIN). With the proposed system, a randomly generated string of numbers, which will be sent offline via snail mail or telephone before each transaction, will be required to complete the verification process. The non-reusable numbers will become obsolete after each transaction. Under the new guidelines, banks were given the onus to securely generate, store and process the authorisation numbers as and when needed. But MAS did not specify the kinds of transactions which required the extra layer of security. A Straits Times check with banks with Internet banking facilities found that most relied on the traditional password and PIN combination, without another layer of checks

From http://straitstimes.asia1.com.sg/ 09/18/2002

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Pakistan: Domestic Debt Surged by Rs 135bn in 2 Years- SBP

ISLAMABAD (PNS): Pakistan's total domestic debt has surged by 135 billion rupees in the past two years, showing government failure in curbing domestic debt growth. In 1999-2000 total domestic debt was at 1560 billion rupees that now has expanded to 1695 billion rupees by end 2001-2, portraying a massive growth of 135 billion rupees, revealed a State Bank report released last week. In 2001-2 there has been a minor decline of 17 billion rupees in the domestic debt over 2000-01, but the two years comparison shows a terrible growth of domestic debt. Report also shows that in the past six years the domestic debt has increased by 775 billion rupees. In 1995-96 the domestic debt was at 920 billion rupees which expanded to 1695 billion rupees by 2001-2. Domestic debt profile shows that it increased to 1056.1 billion in 1996-97, from 920 billion rupees in 1995-96. It further increased to 1199.7 billion in 1997-98; 1453 billion in 1998-99; 1642.4 billion in 1999-2000 and it further expanded to 1695 billion in 2001-02. Domestic debt has been categorised as unfunded debt, floating debt and permanent debt. Despite receiving hefty grants, external assistance, remittances, etc. the government could not made a big dent in domestic debt in two years. Officials say that in the past six years the governments has spent 1168 billion rupees on the payment of interest on the domestic debt. Amazingly, the payment of interest is almost close to the entire domestic debt of 1800 billion rupees in 2000-1. Acceleration in the domestic debt in the second half of the 1990s was spearheaded by unfunded debt followed by floating debt and permanent debt. The unfunded debt (National Saving Schemes) grew at an average rate of 26.5 percent during the second half of 1990s, followed by 17.2 percent increase in floating debt and 2.3 percent in the permanent. The composition of the debt has undergone considerable changes in the last five years. There is a rapid increase in unfunded debt, as its share in total domestic debt has increased from 29 percent in 1995-96 to 39.4 percent in 2000-01. It is mentioned here that despite a tremendous pressure from the International Monetary Fund, World Bank and the Asian Development Bank the domestic debt continued to grow till 2000-1. Multilateral donors always stressed the need to reduce reliance on debt as it takes away most of the budgetary funds and causes extra ordinary burden on the state exchequer.

From http://www.paknews.com/ 09/02/2002

Tax-Free Bonds to Be Launched on Oct 1

NEW DELHI: In a major step to boost household savings, the government on Thursday announced that the new tax-free bond scheme, promised by finance minister Jaswant Singh, will be launched from October 1, 2002.The bonds which will be open to investment by resident Indian individuals and Hindu undivided families will carry an interest of 7 per cent per annum payable half-yearly. There will be no monetary ceiling on investment in the bonds. In a response to the middle-class disappointment over the drying up of tax-free saving instruments because of certain proposals in this year's budget, Singh had announced in the last session of Parliament that the government will provide an alternative avenue for saving to individuals and households. The new bond scheme will supplement the 8 per cent RBI relief bonds where there is now an investment ceiling of Rs 2 lakh. Interest on the new bonds will be exempt from income-tax and the bonds will be exempt from wealth tax. The bonds will be issued in both cumulative and non-cumulative forms. These will have a maturity of six years. The cumulative value of Rs 1,000 at the end of six years will be Rs 1,511. The bonds will be open for investment from October 1. These will be issued at par. These will be issued for a minimum amount of Rs 1,000 and in multiples thereof. Accordingly, the issue price will be Rs 1,000 for every bond with a nominal value of Rs 1,000.The bonds will be issued both in demat (paperless bond ledger account) form and in the form of stock certificates. The bonds issued in one form, however, will not be eligible for conversion into other form. The bonds are not transferable except by way of gift to relatives as defined in Section 6 of the Indian Companies Act, 1956. The bonds are not tradable in the secondary market and are not eligible as collateral for loans from banks and financial institutions. A sole holder or a sole surviving holder of the bond, being an individual, can make a nomination. Applications for the bonds in the form of bond ledger account will be received in the public debt offices of the Reserve Bank of India and other designated branches of agency banks and Stock Holding Corporation of India Ltd, in all numbering about 1600. The RBI offices will also accept subscriptions for issue of stock certificates against investment in these bonds.

From http://timesofindia.indiatimes.com/ 09/06/2002

Reforms Stuck, India's Credit Rating Tumbles

Mumbai, New Delhi: In a sharp reaction to the slowdown in India's economic reforms, including last fortnight's scuttling of the privatisation of oil sector firms HPCL and BPCL, global credit rating agency Standard and Poor's (S&P) today downgraded India's local currency rating to junk bond status. India's foreign currency rating has been maintained at the same level as earlier-these are already junk bond or speculative grade. (This means that Indian companies, and the government will have to borrow money at higher rates of interest). In its downgrade, S&P cited poor finances of India's public sector and its growing debt burden, the setback to reforms and put a question mark over the government's credibility on reforms. The downgrade is expected to demoralise the stock and foreign exchange markets and make overseas borrowings costlier. It comes close on the heels of the delay in the disinvestment process and yesterday's deferment on opening up key sectors to foreign direct investment. India's long-term sovereign local rating has been lowered to BB+ from BBB- and the short-term local currency sovereign credit rating to B from A-3, the agency said. Speaking to The Indian Express from New York, managing director and deputy head of S&P's sovereign ratings group John Chambers said the new ratings put India at ''the same level as Peru, Costa Rica and Guatemala.'' And that this was contrary to the ''general'' upward movement in the rest of the region. In S&P's terminology, BB+ or lower is in the ''speculative'' category, a euphemism for junk-bond status and denoting a high risk of default. However, the company has affirmed the BB long term and B short-term foreign currency sovereign rating for India. The large fiscal deficit with slow pace of economic reforms would lead to a further rating downgrade, the company said in a release. S&P's immediate concern was the unchecked increase in India's fiscal deficit-led government debt-the debt to GDP ratio is currently around 80 per cent and means that India is gradually approaching a debt trap. However, CII director general Tarun Das said the move was primarily political. ''What has changed over the recent past to justify this? They don't understand India. And since there is little borrowing happening, the increase in interest rate doesn't matter.'' Pradip Shah, chairman of IndAsia Fund Advisor, said the move was disappointing, but agreed with Das, in that, since there was little borrowing taking place, the increase in interest rate was not significant. Shah said today's move would not make a difference to FIIs investing in stock market either. He said, however, the downgrade would affect foreign direct investment, as there is a clear signal that India's reforms are not moving on track. In fact, this is what S&P has harped on. ''The government has been unable to contain its growing fiscal deficit,'' Chambers said. While declining to comment on what needs to be done, Chambers said: ''It would help to do a host of things to lower the fiscal deficit which is running around 10 per cent...press forward for private sector reform in energy companies, removing regulations so that India can markedly improve its human development indicators.'' ''Inability of the country's leadership to implement the announced reform policies in a timely manner contributes to India's falling credit worthiness,'' Chambers said. Citing an example, he said political disagreements threaten to set back India's privatisation program which had enjoyed success in recent months. Chambers claimed that the resulting loss in government's credibility, along with foregone revenue from the sale of large public sector firms, weakens investor confidence and enlarges the government's borrowing needs. In August 2001, S&P lowered India's long-term local currency sovereign credit rating to BBB- from BBB in August 2001. At the same time, it affirmed its BB long-term and B short-term foreign currency and A-3 short-term local currency ratings last year.

From http://www.indian-express.com/ 09/15/2002

Reserve Bank Likely to Unveil Big-ticket SLR Revamp Package

The Reserve Bank of India (RBI) is all set to unveil a detailed package on the statutory liquidity ratio (SLR) front in its forthcoming monetary and credit policy for the second half of 2002-2003 on October 29. The SLR package is expected to take a thorough look into various issues relating to the SLR framework, the levels of SLR and also on non-SLR securities, their composition and quality. Sources said with the overall macroeconomic and foreign exchange positions now comfortable, and no immediate problems for the central bank to handle in the policy, the time is now just right for RBI to address this major structural issue. While there is a view that SLR, at 25 per cent, may need to be brought down, the central bank will take a closer look at the related issue of RBI's role as the lender of last resort. "It will have to be examined carefully, since banks may then approach the RBI later, when in trouble, since the central bank is the lender of last resort," sources in the know of the exercise told FE. SLR has, over the years, been brought down considerably, freeing up banks' resources. SLR is now at 25 per cent: since October 25, 1997 when it was bought down from 31.50 per cent. At the start of the reform process, it was at 38.50 per cent. But the structural issues relating to a further review of the SLR situation will need to take into account a host of factors. On the cash reserve ratio (CRR) front, for instance, RBI has already made its intention clear of eventually bringing down the CRR to the minimum of three per cent. CRR currently stands at five per cent. On the issue of non-SLR securities too, the package is expected to take a close look. There is a move on the part of RBI to cap the overall exposure of banks to unrated paper within the non-SLR securities category at 10 per cent of the overall portfolio. This was supposed to have been adhered to by end-September this year. There is, however, no formal operational circular from RBI on this cap yet. Non-SLR securities would typically include corporate bonds, institutional bonds, state government bonds (both rated and unrated), while the unrated papers mostly consists of priority sector bonds, tax-free bonds and banks' tier-2 bonds, and bilateral corporate debt relationship deals. It has also been gathered that RBI was planning to get market-feedback on this issue as banks were seemingly uncomfortable with the prevailing ambiguity. With most banks being over-exposed as regards the 10 per cent limit on unrated papers, finding buyers to sell the unrated papers becomes difficult. There is also no secondary market for unrated papers. Bankers also point out that with the current scenario, they are facing difficulties in taking up any investment decision. Tax plans have been affected in the case of a few banks. (by Sourav Majumdar & Atmadip Ray)

From http://www.financialexpress.com/f 09/24/2002

India: PM Holds Cabinet Meet on Disinvestment

NEW DELHI: Prime Minister Atal Bihari Vajpayee on Tuesday held a high-level meeting with his Cabinet collegues on various matters including disinvestment and some security-related issues. The meeting was attended by Deputy Prime Minister L K Advani, Defence Minister George Fernandes and Finance Minister Jaswant Singh, who denied there was any "tussle" among ministers on disinvestment process. "We discussed many topics including economic policy, foreign policy, some security-related matters and also disinvestment," Singh told reporters after the meeting. He, however, declined to give details of the discussions. Asked if the Fernandes' objections to the disinvestment process came up at today's meeting, he said, "the matter would be taken up at an appropriate occassion." He added that reports relating to differences on disinvestment policy and process were more in the media than in reality. On whether the upcoming meeting of Cabinet Commitee on Disinvestment (CCD) would see a consensus on disinvestment of Hindutsan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL), he said it would be unfair to guess the outcome of the meeting. Singh denied that there was any tussle between the cabinet ministers over the disinvestment process adding that ministers spoke on various matters. He said other matters which came up for discussion included UTI bail-out package and its outcome and also Industrial Finance Corporation (IFCI). The BJP had on Monday come out in support of Disinvestment Policy but stated it was for the 'collective wisdom' of the Government to decide as to which PSUs should be taken for privatisation, and with what methodology. The BJP's comments assumed importance in the wake of Defense Minister and Samata Party President George Fernandes suggesting on Sunday that there should be a discussion of small group of Ministers to review disinvestment policy. In the middle of the controversy over privatisation of the oil PSUs the scheduled meeting of CCD was deferred for the fourth time on August 27 and is now likely to be held on Saturday next.

From http://timesofindia.indiatimes.com/ 09/03/2002

Financial Implications of NAB-FIA Merger Ignored

ISLAMABAD (PNS): The Finance Ministry has expressed its concern over the financial implications of the National Accountability Bureau (NAB) and Federal Investigation Agency (FIA) merger , said official sources. Cabinet sources disclosed to this correspondent here on Saturday that Finance Minister Shaukat Aziz had raised the issue of financial implications of the merger of NAB-FIA in the cabinet meeting on Friday that discussed the issue for almost three hours in which many cabinet members participated. Some of them were opposed to the merger while others supported it and got it done at the end. Sources said when the NAB-FIA merger came up for discussion in the cabinet meeting on Friday, the Finance Minister pointed out that apart from settling some other important aspects of this merger opposed by the FIA bosses right from the start till Friday when the cabinet finally decided for the merger, some other important financial aspects remained to be resolved. Sources said the cabinet decided to form a committee of all the concerned to look into the financial implication of the merger and other problematic areas that have been ignored at this stage. Sources said the committee will also monitor the process of transfer of FIA officials to the NAB to help the Bureau to carry on its task. Sources said the committee will examine the actual requirement of staff needed in the NAB and finalise the names of the FIA officials who will be deputed there. Sources said some members of the cabinet meeting were opposed to the merger and wanted the NAB to concentrate on major crimes as it had been doing in the past. The NAB has been considered a powerful tool in the hands of the military government, but accused of selective accountability drive. Sources maintained that Communication Minister, Javed Ashraf Qazi supported the move of merger strongly. He was joined by the interior minister who reportedly was not happy with the merger initially, but later he was convinced by the briefing given by the NAB chairman to the cabinet with regard to the merger move.

From http://www.paknews.com/ 09/22/2002

Govt to Introduce Islamic Banking-Musharraf

KARACHI (PNS): President General Pervez Musharraf has said that the government was committed to introducing Islamic Banking system and gradually move to the elimination of Riba, so that the country's financial sector is not faced with any adverse consequence. We have adopted pragmatic approach to allow Islamic banking in the country on level playing field, which would enable us to refine it. For elimination of Riba we are trying to find the mode of transaction. Meezan Bank- the first Islamic commercial bank in Pakistan is the first step toward introducing Islamic banking in the country, be observed. The President while speaking at the inauguration ceremony of Meezan Bank Limited in Karachi on Tuesday said that State Bank of Pakistan has put in place a new regulatory infrastructure for Islamic banking in the country by issuing a licence to Meezan Bank. He said the State Bank has also issued an Export Finance Scheme for Islamic banks and necessary amendments to further support Islamic banking would soon be announced by the apex bank, he added. He said his vision for Pakistan was that of Quaid-e-Azam Muhammad Ali Jinnah " a modern, dynamic and progressive Islamic country. Our Islamic heritage is our greatest strength. We must shun emotionalism".General Pervez Musharraf commended the establishment of Meezan Bank, which has shareholders from Saudi Arabia, Kuwait and Bahrain. The President said that significant interest in Islamic banking was being witnessed in many countries. Chairman Meezan Bank and Deputy Finance mInister of Bahrain Sheikh Ebrahim bin Khalifa Al-Khalifa in his address noted that Pakistan has played significant role in promoting Islamic banking. There was great potential for Islamic banking in Pakistan. He said Meezan Bank, which showed remarkable performance according to Shariah as Investment bank in last four years, will meet the challenge and create a module for Islamic banking and Financial System in Pakistan. Meanwhile, Speaking at inauguration of Meezan Bank, President General Pervez Musharraf has reiterated general elections would be held in the country on October 10 which would usher in a healthy era of sustainable democracy with the elected government completing its tenure and ensuring continuity of reforms. "I see bright future for Pakistan, which will stay, on course, but we should not be complacent. The new leadership will build on the foundation laid by the present government. The constitutional amendments made by my government are for checks and balance so that there is no misuse of power as was done before in the country. We want sustainable democracy so that there is continuity of reforms and government completes its tenure". All things are pointing to economic turn around in Pakistan in the next few months as a result of the reforms being implemented by the government, he added. He pointed out that today Pakistan's economy is not facing any crisis. There has been strong economic activity in first two months of fiscal 2002-2003 July and August, he noted. The country's exports are increasing, revenue collection is good, forex reserves were record high and now touching $8 billion mark in next weeks (as against $3 billion only in 1999, exchange rate is stable, interest rate low, stock exchange performance is also good, he stated. There is credible economic environment in the country now, he observed. The President stressed his government worked hard in last three years on its performs genda to revive the national economy. He recalled that in October 1999 the country's public debt had crossed manifold. Exports were dwindling and the country and country could have defaulted in 1999. General Pervez Musharraf said Pakistan's economy suffered from debt and investment dilemma. During the last three years, the government registered substantial decrease in domestic debt from 55% to 46% of GDP and foreign debt from $38 billion to $36 billion. Revenue collection rose from Rs. 300 billion per annum to Rs. 402 billion in last two years, he added. Exports have risen to $9 billion in fiscal 2001-2002 and would increase further in fiscal 2002-2003. He spoke of rescheduling of Pakistan's loans by the Paris Club, but emphasized that this was not done due to September 11,2001 terror incidents in United States. Vice President of IMF who performance by Pakistan's economy.

From http://www.paknews.com/ 09/18/2002

Pak Improves Investment Potential

ISLAMABAD (PNS): Pakistan has improved its foreign direct investment (FDI) potential going up to 114 in the ranking, says Board of Investment. Addressing a news conference in connection with World Investment Report released by United Nations Conference on Trade and Development (UNCTAD), Shuja Shah, Secretary BOI said, "in Pakistan, the potential to increase investment is boosted in 2000, as compared to 1990." Shah said that the FDI inflows in Pakistan were 72.8 million dollars last year as compared to the developed world. He said that the country had made progress in the last decade. However, Pakistan ranked 114 remained in the list of under performers for foreign direct investment. About the global developments, he said, "FDI inflows after touching peak in 2000, declined to the lowest last year." Shah pointed out, many factors contributed to this downward trend. "Slowness of world economy and economic impact of September 11incident mainly contributed to the decline." FDI flows to the developing economies of Asia and the pacific declined 24 % last year to 102 billion dollars down from 134 billion in 2000. The report shows that much of the down turn was due to 60 percent drop in flows to Hong Kong and China, which had recorded massive inflows last year. However, China performed well and remained the largest recipient in both the region and the developing world. India, Kazakhstan, Singapore and Turkey were leading recipients in their respective sub regions. The report says that inflows in South Asia reached 4 billion dollars, a 32 % hike over the previous year. Of this, 3.4 billion dollars went to India (up 47 %). India is the largest recipient in the region. According to the report, Hong Kong, China, and Angola are the best performing host economies for foreign direct investment, while the United States, Sweden and Singapore have the highest potential.

From http://www.paknews.com/ 09/18/2002

National Finance Commission Meeting Makes Progress

PESHAWAR (PNS): The fourth meeting of the National Finance Commission (NFC) made progress on 6th award in a meeting held here Sunday. The meeting was presided over by Shaukat Aziz finance Minister. The meeting reached on broad understanding on splitting the divisible pool between federal provincial Government as well as between the provincial governments. The meeting also reached consensus on the total amount of subvention to be shared by the provirus and offered proposal for finalization of relative shares. The provincial finance Ministers will how discuss final recommendations agreed with provincial Government after which the final meeting will behold in Islamabad. The meeting among other was attended by the secretary General Finance provincial Finance Minister Federal secretaries and senior officials of the Federal and provincial Government.

From http://www.paknews.com/ 09/16/2002

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ADB Issues Loan to Tajikistan for Landslide Stabilization

The Asian Development Bank (ADB) has approved a loan of US$5.3 million equivalent to Tajikistan to undertake emergency slope stabilization measures and restore reliable water flows in the Vakhsh River to prevent further disruption to power generation and irrigation in the region. The Vakhsh River was blocked by a landslide following an earthquake in early March 2002.Since then, the landslide has been moving at speed varying between a few millimeters to one centimeter a day. The ADB said there is an imminent danger that sudden movement of the landslide will completely block the river and submerge the Baipaza Hydro Power Station located in the Kathlon region, Southern Tajikistan. It said in a statement that the objective of the project is to restore water flows in the Vakhsh River to at least pre-earthquake levels and to initiate disaster prevention measures. This will be done by limiting the occurrence and magnitude of the landslide and mitigating its impact. The project will also undertake a feasibility study to determine the most cost-effective long-term solution to the problem. Mantaining reliable flows in the Vakhsh River is vital for Tajikistan and the downstream countries of Uzbekistan and Turkmenistan. Any blockage of the Vakhsh River would disrupt the power generation of five hydropower stations. "In the worst case scenario, 90 per cent of the electricity-generating capacity of Tajikistan could be at risk," Xavier Humbert, ADB's Energy Specialist, said. "In addition, blockage of the Vakhsh River would endanger water supply to downstream users for agriculture, industry, and drinking water and disrupt water supply to Uzbekistan and Turkmenistan." The ADB will finance 80 per cent of the total project cost. The ADB loan will come from its Special Fund resources, and will have a term of 32 years, including a grace period of 8 years, with an interest charge of one per cent per annum during the grace period and 1.5 per cent thereafter. The Ministry of Energy will be the project's executing agency.

From http://81.29.68.227/ 09/19/2002

Total Foreign Debt of Kazakhstan Is Around $15 Billion

The total foreign debt of Kazakhstan is currently around $15 billion, Grigorij Marchenko, chairman of the board of the National Bank of RK announced at a press conference on 11 September in Almaty. Out of the total amount, according to G.Marchenko, the foreign debt of RK, ensured by the State is $3.8 billion. Furthermore, on 2 October 2002 due to Euro-shares payment in the amount of $350 this figure will decrease to less than $3.5 billion. "Ministry of finance and the government of the Republic do not plan any new allocations," he said. The head of National Bank emphasised that the tendency towards gradual decrease of the State foreign debt has been observed during the last 2.5 years. In 1999 this debt was $4 billion. Meanwhile, G.Marchenko stated that the foreign assets of Kazakhstan grow annually and by the beginning of September 2002 its gold reserves reached $4.7 billion. "Kazakhstan as a State is a net creditor and it is quite a rare situation at the territory of the former Soviet Union", - the head of National Bank said. The foreign debt not ensured by the State, including the debts of enterprises and banks as well as debts between firms, is around $12 billion.

From http://www.gazeta.kz/ 09/11/2002

Kazakh Budget Parameters for 2003 Outlined

The budget for 2003 was drafted with extreme caution because Kazakhstan's economy remains vulnerable to shifts in world prices for its key exports, Imanghaliy Tasmagambetov told a cabinet session in Astana on 10 September, Interfax reported. He said that for the next three years, the government plans a budget deficit of 2 percent, and consequently "will not be able to finance all the projects proposed." Revenues in 2003 are set at 621.6 billion tenges ($4.04 billion), which is the equivalent of 15 percent of planned GDP, and expenditures at 704.4 billion tenges. Tasmagambetov said the national budget incorporates oblast budgets, and has been approved by all oblast governors. It must be submitted to parliament by 15 September. Addressing the same session, Economy and Budget Planning Minister Kairat Kelimbetov said revenues are predicated on world oil prices of $21.2 per barrel, ITAR-TASS reported. He said GDP growth is predicted at 6 percent and annual inflation at no more than 5.9 percent. Of total expenditures, 33 percent are earmarked for the social sphere, and defense spending will rise by 24.1 percent to 41.42 billion tenges, or 1 percent of GDP, Interfax reported.

From http://www.rferl.org/ 09/11/2002

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Solomons Budget 'Blow Out' Continues

HONIARA (SIBC/PINA Nius Online) - The Solomon Islands Government continues to experience a budget "blow out" as its expenditures still exceeds its revenue. Addressing a luncheon hosted by the Solomon Islands Chamber of Commerce and the Economic Association of Solomon Islands in Honiara, Permanent Secretary for Finance Lloyd Powell said "the only answer to this is for the government to reduce its payroll and stop compensation payments." Powell revealed that up to the end of July, government spent more than Sol$100 million on payroll compared to a budget of Sol$71 million. Powell said the government is now working on reducing the number of ministries from the current 20 to 10, and reducing the workforce by 1,300 employees. I will be disappointed if it doesn't happen within the next two weeks," he said. Powell revealed that he and other government workers continue to be harassed by people frustrated over slow payments. "In actual fact, I had to get a security officer to escort me to get out of the office to come this morning," he told the luncheon.The government continues to fial to pay public servants and teachers on time. Teachers, who are in their sixth week of a boycott of classes, have at least three days pay outstanding. Health and medical services are also affected with the absence of very basic drugs from hospitals and clinics.

From http://www.pacificislands.cc/ 09/04/2002

Visa Challenges RBA Reforms

Visa International is taking Australia's central bank to court over its proposed credit card reforms. Visa said yesterday it had no alternative but to take legal action over what it regarded as "misconceived regulatory intervention" into its credit card business. The Reserve Bank said it would vigorously defend its reforms. Visa argued that the RBA had acted beyond its legislative powers in developing the proposals, which include slashing the hidden fees banks charge each other for every credit card transaction. Australia's other major credit card operator, MasterCard International Inc, has yet to decide whether to join Visa in the court action. Federal Treasurer Peter Costello said it was regrettable Visa had decided to take legal action but added "they are entitled to do so". "These are important reforms and I call on the banks to accept them," Mr Costello said through a spokesman. Visa's executive vice-president for Australia and New Zealand, Gordon Wheaton, said the card operator would test in court whether the RBA had met its statutory obligations under the Payments Systems (Regulation) Act. "These regulations result in significant damage to our business (and) a negative impact on our card holders," Mr Wheaton said. "They do deliver our competitors a significant commercial advantage and create inefficiencies in the market." An RBA statement said: "The Reserve Bank is disappointed that Visa International has chosen to take this action and will vigorously defend the reforms. "The RBA unveiled its long-awaited credit card reforms last month, planning to slash interchange fees by 40 per cent. It would also allow retailers to charge credit card customers more to recover the extra costs of those transactions and allow companies to issue credit cards in competition with banks. The interchange fees raise about $900 million for the banks annually. Mr Wheaton said the potential loss of income was not the reason behind the court action.(by Ruth Peters)

From http://www.theage.com.au/ 09/20/2002

New Zealand: Officials Confused de Facto Facts

The Government faces paying million of dollars to rectify errors made in determining beneficiaries' entitlements between 1996 and 2000. The payments will be made to people who had their benefit stopped, or were ordered to pay it back, because the wrong rules were used to decide their de facto relationship status. "We're not entirely sure how many people this might apply to," Associate Social Services Minister Ruth Dyson said yesterday. She said the Ministry of Social Development wanted people to come forward if they thought they were incorrectly tested. She said the entire benefit system was complicated and up to 15,600 cases would be reviewed. The problem has arisen because in 1996 the Court of Appeal ruled that de facto relationships had two essential features - emotional commitment and financial interdependence - and that the effect of violence in a relationship had to be taken into account when assessing these features. But a report by Auckland lawyer Frances Joychild concluded that Work and Income NZ did not consistently implement the court's ruling until late 2000. Ms Dyson said that if just 1 per cent of the 15,600 cases involved repayment, it would cost $3.6 million. Cases are to be reviewed by a three-member panel made up of two ministry officials and an independent member. A campaign to advise people of the review will start on Monday.

From http://www.nzherald.co.nz/ 09/00/2002

Internet Banking a Reality in PNG

PORT MORESBY (Papua New Guinea Post Courier/PINA Nius Online) - Internet banking for Papua New Guinea customers of ANZ Bank will become a reality early next month. Installation of the system will start today, follwed in the next few months by a business service. Bob Lyon, ANZ's managing director for Pacific and Personal Banking Asia, said Papua New Guinea has become one of the bank's major offshore operations. With the recent purchase of the Bank of Hawaii branch in Port Moresby, it is now the second largest bank in PNG, he said.

From http://www.pacificislands.cc/ 09/02/2002

China Commits K4m Cash Grants to Papua New Guinea's 2003 Budget

Port Moresby - China yesterday affirmed further its friendship with Papua New Guinea by committing K4 million in cash grants to support the 2003 budget.And it will follow this up with another agreement in December to give US$2.4 million (K9.6 million) in what was described as "much-needed and mutually agreed projects."Papua New Guinea, in response through Finance and Treasury Minister Bart Philemon, re-affirmed its commitment to the One-China Policy. This was described by Chinese Ambassador Zao Zhenyu as "the cornerstone of our relationship over 26 years." - Papua New Guinea Post-Courier/PINA Nius Online.

From http://www.pacificislands.cc/ 09/24/2002

Australia: Howard Consumer Levies Hit $1bn

CONSUMERS are paying more than $1 billion a year in new levies imposed by the Howard Government to fund a range of ad hoc spending measures. Ranging from the $820 million superannuation surcharge to the latest $150 million impost on sugar, the levies have become the signature tax of the Howard Government. "This Government has a history of imposing levies, probably because they aren't called taxes, but either way it's appropriation," Taxpayers Australia chief executive Peter McDonald said yesterday. In the past three years, the Government also has placed a $10 tax on airline tickets, and and an 11c-a-litre tax on milk. The first special levy imposed by the Coalition on winning office in 1996 was a one-off increase in the Medicare levy to fund a gun buyback in the wake of the Port Arthur massacre. The levy raised $503 million in the 1996-97 financial year, and delayed payments that are still dribbling in could result in it breaking $515 million. In the same year, the Government announced it would impose an extra 15 per cent tax on superannuation contributions by high-income earners. This sparked a debate about whether John Howard had broken a promise not to raise taxes as the Government insisted the increase was a "fairness measure" rather than a revenue grab. Either way, the Government will phase the levy down to 10.5 per cent over three years. The funds' management industry, which is forced to collect the tax, estimates it costs more to collect than it raises for the Government. Since 1997, the Government has most often resorted to the special levy to fund corporate welfare. As part of its dairy industry restructuring plan, undertaken at the behest of the industry, the Government is levying consumers 11c per litre of milk. The levy raised $218 million last year, and will continue for eight years. It has been used so far to pay $45,000 each to 109 farmers to leave the industry, while those who remain receive an average of $54,000 per year from the Government. This week, the Government announced that canegrowers would receive financial assistance through a similar tax on their product. Each time a consumer buys a kilo of sugar, they will pay a tax of 18c to fund a sugar industry restructuring plan. Labor, which supports a special subsidy to the industry, attacked the levy yesterday. "We provide much more support to other industries, like the car industry, which has no levy to fund it. It is simply a product of the Government having developed a propensity to put an unfair tax to fund all their policy initiatives," Labor Treasury spokesman Bob McMullan said. The other big special purpose tax still being levied is $10 per airline ticket to recoup the $300 million it paid out to Ansett workers whose entitlements were in danger (by Duncan Macfarlane).

From http://www.theaustralian.news.com.au/ 09/14/2002

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Private Money Flees Emerging Markets

WASHINGTON - The "emerging markets" of the Asia-Pacific region are among the few still managing to attract more private investment, while overall private capital flows to economies in this category are set to reach their lowest level in 10 years, says a global association of financial firms. Capital flows have been dragged down by a global recession and security concerns, says the Institute of International Finance (IIF), which groups more than 310 financial institutions from more than 60 countries. Net private flows to emerging markets is expected to be US$123 billion this year, compared with an annual average of about $187 billion over the past 10 years. The IIF forecasts that the largest single area of net private capital flows will remain foreign direct investment, although the 2002 total will be $20 billion below last year's level, or $113 billion. "This difference has first gone into equity markets in the US and Europe and now into the fixed-income market in the US and Europe. That's largely where it's gone. It's just pulled back from the emerging markets because the risks were higher than the returns," said Charles Dallara, managing director of the IIF. In its capital-flows report, released prior to the agency's annual meeting next week, the association of investors said that as a share of emerging-market gross domestic product, net private capital flows this year are likely to equal just over 2 percent, compared with almost 4 percent of GDP in 1992. Dallara, whose group lobbies on behalf of hundreds of international banks and investment houses, said the picture looks slightly better for next year, assuming global economic recovery. For 2002, net private flows could rise to about $151 billion, predicts the IIF. The increase would be largely due to the end of private capital outflows from crisis countries, particularly in Latin America, rather than strong improvement in underlying emerging market fundamentals. The report also said a gradual economic recovery in industrial countries during the rest of this year, and possibly 2003, should help emerging market exports to recover from last year's decline. Argentina, Paraguay and Turkey have all been pestered by unrelenting financial crises during the year, and net development assistance to emerging markets is expected to reach record levels primarily due to official rescue packages extended to those countries. The net flow of private money into emerging markets peaked at $328 billion in 1996 before falling to $266 billion in 1997. The Asian financial crisis began to unfold later that year, resulting in investment and lending plummeting to about $148 billion in 1998. The IIF, the financiers' club, routinely surveys investment prospects in 29 "emerging markets", a term invented by the World Bank's International Finance Corp (IFC) as a way to entice investors to venture into countries that otherwise would be shunned as "developing" or "Third World" markets - labels that connote high risk and political instability. The IIF report noted significant regional differences, with net private capital flows to the emerging markets of Latin America forecast to fall to $29.1 billion this year from $45.6 billion last year. Private flows to the emerging markets of Africa-Middle East - including Egypt, South Africa and Morocco - are seen declining to $9.2 billion from $10.6 billion in 2001. But net private capital flows to the emerging markets of Europe - Bulgaria, Hungary, Poland and Romania, among others - are seen as rising to $23.9 billion this year versus $16.4 billion last year. Flows to the emerging markets of Asia-Pacific - including India, China, Indonesia and Malaysia - are projected to increase to $60.7 billion from last year's $53.4 billion. Dallara said fear of contagion has led fund managers to tread more cautiously in emerging markets but that his association was working to minimize such risks in the future. "The IIF will consider the formation of a task force [composed] of emerging-market investors, underwriters, traders, and key finance officials to review measures that would improve market mechanics and minimize contagion," he said. Dallara also urged more free-market economic reforms. "It's not that the free-market model has failed, it hasn't been applied consistently enough," he said. "The emerging markets need consistency in their polices - sound fiscal and monetary policy - and to continue reform. When they waver, even for six or 12 months, the costs can be huge." Peter Woicke, chief of the IFC, the private-sector arm of the World Bank, said his