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Pakistani diplomats on Wednesday stressed signing of a free trade deal with Bangladesh to strengthen bilateral business ties.
   Bangladesh trade leaders, in response, wanted Pakistan, while asking for a bilateral deal, to come up with more generous offers than in SAFTA. They also sought transit facilities through Pakistani territories to facilitate Bangladesh’s trade with Afghanistan and other central Asian nations.
   Presenting a keynote paper at a dialogue with Bangladesh’s trade leaders on Wednesday, Roubina Toufiq Shah, commercial secretary of Pakistan High Commission in Dhaka, said her country wants FTA for cementing ties, bridging gap between the broken families, reviving old business relation with Bangladesh.
   ‘Pakistan desires to give Bangladesh special preference—SAFTA plus status,’ she told the dialogue, chaired by the Federation of Bangladesh Chambers of Commerce and Industry president, Mir Nasir Hossain.
   Pakistani diplomats, led by the country’s acting high commissioner, Ayaz Mohammad Khan, explained the trade benefits that they hoped to follow after conclusion of FTA deal.
   The talks on bilateral FTA, initiated in 2003 mainly on Pakistan’s insistence, got momentum during a recent visit of Bangladesh’s prime minister Khaleda Zia to Islamabad, where leaders of the two countries set the July 31 deadline for the agreement targeting one billion dollar trade by 2007.
   During the first six months of the current fiscal year, bilateral trade amounted to about $100 with Pakistan sharing two-thirds or about $65 million.
   Local business leaders, who appeared less prepared to pinpoint their interests and potentials, however, supported the FTA and hoped that Bangladesh should gain more than what expected from the regional deal, SAFTA.
   Roubina, the Pakistani trade diplomat based in Dhaka, said the FTA will enhance bilateral trade and lure Pakistani investments into Bangladesh.
   She listed many non-traditional Bangladeshi products including cement corrugated iron sheet, solar lamps, battery cells, textile products—blanket, garment, accessories, sweaters, children garment and under-garment, flowers, fruits and rubber, which could have good market in Pakistan.
   Diversified jute and bamboo products, coconut coir, ceramic products and tiles also hold high potentials in Pakistan, which sold textiles and chemicals, beverages, vegetable products, vehicles and machinery worth $139 million to Bangladesh in the 2004-2005 fiscal.
   Ayaz Mohammad Khan said ‘unwarranted scepticism’ has prevented both the countries from utilising common resources to people’s benefit.
   He said Pakistan is considering lowering its tariff on some items and reconsidering its list of negative items for Bangladeshi products.
   In his presentation, Manjur Ahmed, an advisor of the FBCCI, said rules of origin under the Bangladesh-Pakistan FTA must be more liberal than SAFTA and Pakistan should facilitate Bangladeshi exporters to transit their goods to central Asian countries through her territory and ports.
   Mir Nasir Hossain said launching of direct shipping link, expanded air links, identification of negative list, resolving non-tariff barriers and harmonisation of customs laws are needed to be addressed to reap benefits from the proposed FTA.
   ‘Regulations, such as licensing, registration, banking and infrastructure facilities need to be addressed properly,’ he added.

Protestors took to the streets here Wednesday as the Asian Development Bank held its annual meeting on expanding free trade in a region which is home to two-thirds of the world’s poor.
   More than 1,000 people beating drums and carrying banners rallied against the lending policies of the ADB and the World Bank which they branded as anti-poor, witnesses said.
   Several hundred protestors had already demonstrated during the early morning in this southern Indian city to protest the ‘anti-people policies’ of the multilateral agency.
   Wearing black headbands, brown and green jackets proclaiming ‘Destroy ADB’ and ‘Go back ADB’, the demonstrators, including women and children, shouted slogans against the Manila-based lender.
   ‘ADB hands off our water, our health, our forests, our livelihood and our environment,’ a huge banner read.
   ‘These agencies are undemocratic and push their own agenda without listening to our voices,’ said Murad Hussian, head of a 70-member group from India’s eastern state of West Bengal.
   The People’s Forum Against ADB, an umbrella group of more than 70 non-governmental organisations, also kicked off a ‘parallel session’ in Hyderabad to highlight the plight of people displaced by ADB projects, what it claims to be the lack of accountability of the ADB and other social issues.
   ‘The ADB, like the World Bank, has become the custodian of private investment and the promoter and protector of corporate interests and profits,’ said Gururaja Budhya, a People’s Forum spokesperson.
   ‘The projects of the ADB continue to displace hundreds of thousands of people across the region with little or no compensation,’ he said. ‘The ADB creates development refugees and manufactures poverty.’
   On Friday, the People’s Forum is planning a rally in Hyderabad and more than 7,000 people are expected to attend, Budhya said.
   More than 3,000 delegates including finance ministers, business leaders and representatives from global organisations are attending the ADB’s 39th annual meeting to focus on Asian development challenges.
   ADB President Haruhiko Kuroda said the major challenge was to bridge the widening gap between rich and poor and to ensure that the poor benefit from economic growth.
   ‘This will not be easy to achieve. There are a number of challenges,’ Kuroda told a press conference.
   ‘Broad-based growth can only be achieved if people have basic access to clean water and sanitation, and if the poor are provided with education and training to get jobs.
   ‘The greatest threat to private investment and growth in many countries is the high level of risk arising from regulatory weaknesses, policy uncertainty and market distortions. This is a critical moment for Asia,’ Kuroda said.
   ‘How we respond to these challenges will shape the region’s future,’ he added.
   The ADB is expected to finalise a new medium-term strategy for Asia at the annual meeting.
   ‘I expect the strategy will confirm ADB’s fundamental goal of poverty alleviation and intensify our focus on a few key areas as well as regional cooperation and integration,’ Kuroda said.
   The formal sessions of the ADB meeting run May 5-6 with various meetings taking place in the run up to the official opening.

Taka against the US dollar regained value by Tk 1.59 or 2.1 per cent in a month on the back of higher inflow of foreign currency against a slower demand, showed a provisional estimation on the basis of inter-bank weighted average exchange rate.
   Bangladesh Bank statistics showed that taka-dollar exchange rate stood at Tk 69.79 on Wednesday, which was Tk 71.38 on April 3, 2006.
   An increased inflow of foreign currency in the market and a reduced demand of the greenback contributed to the marginal appreciation of local currency.
   The local currency, however, lost value by about 8.7 per cent between July-April period, while the depreciation rate was about 10.75 per cent during the first three quarters of the current fiscal year.
   The lower import payments against the higher export earnings and remittance inflows kept the current account balance in a positive level.
   Gradual regaining of the value of local currency prompted commercial banks to readjust buying and selling rates of dollar in the middle of April.
   The appreciation of currency has also eased the pressure on balance of payments as well as foreign exchange reserve to some extent.
   Dollar traded in the inter-bank foreign exchange market on Wednesday between Tk 69.49 and Tk 69.86 against the range of Tk 69.30 and Tk 70 on Tuesday.
   At the import level, state-owned banks quoted Tk 69.80 per dollar for opening import letters of credit.
   The private and foreign commercial banks quoted as high as Tk 71.50 and Tk 70.25 per dollar for L/C opening.

The authority of Chittagong Customs House issued notice on Wednesday to clear cargoes lying dumped for a long time at Chittagong Port sheds.
   The CCH in this regard held a meeting with the stakeholders of port and customs on Wednesday morning to resolve space problem inside the port, official sources added.
   The commissioner of CCH, Farid Uddin, told New Age that customs revenue of Tk 1,200 crore remained stuck up against those imported and dumped goods worth about Tk 8,000 crore.
   ‘Some of the imported consignments to our surprise remained stockpiled for the past several years,’ he said.
   ‘How long can we bear it while the importers indulge in using the port areas as the ‘warehouse’ or ‘showroom’ of their cargo?’ he said, adding ‘the port sheds are now over-congested as the traders take delivery of goods slowly.’
   ‘The importers wait for high prices keeping their goods dumped inside the port for months or years together. As a result, it creates a backlog in cargo discharge’ he added.
   ‘Now we issued the notices to all consignees of dumped cargoes to take delivery within 15 days on receipt of the notice, otherwise we will be forced to put those cargoes on auction as soon as possible,’ the commissioner said.
   ‘We held the meeting with stakeholders to make them aware of the deadlock as well as to expedite the process of delivery,’ he added.
   ‘We have the only alternative to go for immediate auctioning if the consignees fail to respond to our call,’ he added.
   Port and customs sources said that the goods dumped inside the port sheds here included 4,000 vehicles, industrial raw materials, machineries, different accessories and timbers.

Iran Tuesday said it would not use oil as a weapon even if UN imposed sanctions on the country over its nuclear programme, while predicting that crude prices might touch $100 on supply constraints.
   ‘It is possible (for oil prices to touch $100 a barrel in 2006 winter) because the market shows demand is higher and supply in the short-term cannot be increased,’ Iran’s Deputy Oil Minister Hadi Nejad-Hosseinian told reporters here.
   Hosseinian, who had last year predicted that oil prices would cross $70, said: ‘We don’t like high prices of oil as it affects economies of the world. We don’t like it. We like stable prices.’
   The oil prices, which climbed to an all-time high of $75.35 a barrel this year, also depended a lot on political developments, he said.
   ‘We have explained many times, we don’t use oil as weapon,’ he said when asked if Tehran could stop oil exports if United Nations imposed economic sanctions against it.

The Association of Bankers Bangladesh Wednesday decided to offer maximum 12 per cent interest on term deposits and charge minimum 14 per cent interest on commercial loans from June this year.
   ‘The decision is to restrict unhealthy competition among the commercial banks,’ ABB chairman M Aminuzzaman told the newsmen after a meeting of the chief executive officers of the commercial banks.
   The meeting was a follow-up of Bangladesh Bank’s meeting with the bankers last week that expressed concern over the desperate drive by the commercial banks to mobilise deposits at higher rates through advertisements.
   The bankers had also expressed concern that the deposits at higher rates would force the banks to push up the lending rates.
   Aminuzzaman said the ABB took the decision also to stabilise the money market heated up recently due to the liquidity crisis.
   The bankers reiterated their demand to the central bank to reduce the Statutory Liquidity Ratio (SLR) and Cash Reserve Requirement (CRR) by 2 per cent to help increase liquidity in the money market.

Bangladesh Bank on Wednesday instructed all commercial banks to send information on financial transactions made by 12 companies, suspected for illegal fund transfers.
   The companies are: Universal Food Ltd, Al Amin Trade International, King and Company, Camalia International, Oriental Export, Greenway Traders, Famous Business International, BDC Food, BD Food Company, NHB Company and Rainbow Limited.
   Banks are ordered to report to the central bank’s anti-money laundering department on financial transactions of theses companies by May 9.
   If any of the companies has any bank account and financial transaction with any bank, the bank has to send details of the account, the central bank order said.
   The order came after intelligence agencies had suspected involvement of BD Foods Limited and its sister concern King and Company in reported smuggling of 75.5 kilogram of heroin to the United Kingdom through manipulation of export process.

The Dhaka Stock Exchange listing sub-committee on Wednesday approved the application of S Alam Cold Rolled Steels to be listed with the bourse.
   The trading of the shares of the company will start at the bourse upon getting the final approval from the next meeting of the DSE board, said sources at the bourse.
   During the initial public offers subscription period from February 19 to 26, S Alam offered a total of 1.2 million shares to the general public with an offer price of Tk 100 each share. A total of 82,499 applications worth Tk 44.20 crore were subscribed by the public.
   Sources at the Chittagong Stock Exchange said the CSE approved the listing application of S Alam last week but did not fix the debut trading day of the company’s shares yet.
   Meanwhile, stock prices at the bourses went mixed on Wednesday with composite index gaining while blue chips index losing.
   DSE all share price index gained 1.41 points or 0.14 per cent to close at 1047.64 on Wednesday.
   DSE20, comprising blue chips, lost 1.24 points or 0.09 per cent to close at 1323.15.

Oil hovered near $75 a barrel on Wednesday, within striking distance of record highs, as mounting tension over Iran’s nuclear plans and expectations for a small draw in US fuel stocks compounded global supply worries.
   US light sweet crude gained 16 cents at $74.77 a barrel by 0955 GMT, extending a rally for a fourth successive day after a jump of 91 cents on Tuesday. Prices were near their all-time peak of $75.35 a barrel, hit on April 24.
   IPE Brent crude matched Tuesday’s record of $74.97 a barrel, but was later trading at $74.75 a barrel, up 11 cents.
   Prices have soared nearly $5 over the past four days, amid a fresh surge of fund investment that has also lifted gold to a 25-year high, with help from a weak dollar, and taken platinum to a record.
   ‘With good technicals for commodities plus the Iran situation, plus global growth, the market looks to establish a higher range,’ said Emanuele Ravano, head of portfolio management at PIMCO in London, who predicted prices would soon rise above $80.
   Others disagreed, saying prices would not test new highs without any major news.

Gold jumped to a new 25-year high on Wednesday as fund buying persisted, driven by a weak dollar, strong oil prices and worries about Iran’s nuclear ambitions.
   The bullish sentiment spilled into other metals and sectors, with platinum jumping to a record high and silver hovering below a 23-year peak.
   Britain’s top share index opened higher, led by gains for miners and oil firms.
   ‘The dollar has weakened very dramatically in the last two weeks and the tension over Iran gets worse by the day,’ Stephen Briggs, economist at SG Corporate and Investment Banking, said.
   Spot gold rose as high as $676.25 an ounce, the highest since October 1980, before easing to $674.70/675.70 by 0958 GMT, against $666.20/667.20 late in New York on Tuesday.

Malaysian entrepreneurs are increasingly eyeing Bangladesh as their potential investment destination, official sources said.
   In the last couple of months, four Malaysian trade delegations have visited Dhaka to look for investments and business opportunities here, Board of Investment (BoI) sources said.
   ‘Telecom Malaysia (TM) is seeking a second licence from the Bangladesh government aiming to become the leader in the telecommunications industry here,’ one source at the Bangladesh Telecommunication Regulatory Commission told the news agency, requesting anonymity.
   Three other Malaysian companies are also looking at opportunities to install telecommunications towers across the country, he added.
   Currently Malaysia is the fifth largest foreign investor in Bangladesh with about Tk 2,900 crore.
   Malaysians are exporting goods worth Tk 2,700 crore (Malaysian Ringgit 1.4 billion) annually to Bangladesh, which was a mere Tk 290 crore in 1991.
   Westmont, KPJ, MRCB and Dunham-Bush are among the Malaysian companies currently operating in Bangladesh.
   Today, Bangladesh is a thriving economic entity where Malaysian businessmen are increasingly getting interested, an official at the Malaysian High Commission in Dhaka said.
   He said there are numerous projects that are being negotiated or pursued at the moment.
   The Construction Industry Development Board (CIDB) of Malaysia has recently visited Bangladesh and has shown interest to develop 100,000 units of flats for the lower-medium income group in Dhaka, BoI sources said.
   CIDB is also interested in investing over Tk 7,700 crore for a highway project from Dhaka to Chittagong, sources said, adding the company is also interested to set up barge-mounted or trailer-mounted power plant in the country.
   Ramatex, a textile enterprise that has become a household name in Namibia, is seeking to replicate its success in the African country in this South Asian nation, an official at the Malaysian High Commission told BDNEWS.
   It is looking for 1,000 acres of land to produce cotton ready-made wear and knitwear, he noted.

Inflation over 12 months in the 30 member countries of the Organisation for Economic Cooperation and Development fell to 2.6 per cent in March from 2.8 per cent in February, the OECD reported on Wednesday.
   In the 12 months, consumer prices for energy rose by 12.7 per cent after an increase of 14.5 per cent in the 12 months to February. Prices for food rose by 1.4 per cent after an increase of 1.8 per cent in the 12 months to February.
   The OECD said that inflation, excluding the effects of prices for energy and food, was 1.8 per cent in the 12 months to March, unchanged from the figure in February.
   On a monthly basis, consumer prices in the OECD area rose by 0.4 per cent in March after an increase of 0.2 per cent in February.
   In the eurozone, 12-month inflation was 2.2 per cent after 2.4 per cent in February.
   Excluding the effects of energy and food prices, 12-month inflation in March was 1.3 per cent after 1.2 per cent in February.
   In the month of March, eurozone prices increased by 0.6 per cent compared with an increase of 0.3 per cent in February.
   In the United States, inflation was 3.4 per cent in March after 3.6 per cent in February, and in Japan prices in the 12 months to March rose by 0.3 per cent from an increase of 0.4 per cent in February.

The Biman Bangladesh Airlines have decided to suspend its loss-making New York flight from June this year.
   Biman sources said the national flag career would operate its last New York flight on June 3 and its New York flight would remain suspended for an indefinite period.
   Meanwhile, the steering committees of all the organisations of Biman Bangladesh have launched ‘save Biman’ movement.
   As part of the movement, the steering committees organised a big rally in front of its main office ‘Balaka’ at Uttara on Wednesday.
   Speakers at the rally demanded measures to stop all kinds of wastage and corruption in the organisation. They also protested against the attempt to plunder wealth in the name of seeking strategic partners.
   Biman sources said all the stations of the organisation and the airlines concerned had been informed about Biman’s decision on the New York flight through telex messages on Wednesday.
   The recently rescheduled Dhaka-Dubai-Manchester-New York flight of Bangladesh Biman was returned back in its original route of Dhaka-Dubai-Brussels-New York as per a decision of the Biman authorities.
   The Biman decided to operate the flight on the previous route as the US Federal Aviation Authority objected to the landing of the flight in New York via Manchester.
   As per the decision made on April 24 by the Biman authorities, it was supposed to be remained in force till June 6.
   Biman sources said FAA fined Biman a large amount of money for operating NY flight via Manchester breaching the existing rules.
   Biman started to operate its New York flight via Manchester from April 8 changing its previous route in a bid to reduce loss.
   The national flag carrier had to incur a loss of Tk 70 lakh in every New York flight.
   Biman now operates New York flight on Saturday every week. Earlier, the flight was operated three days a week.

Iran Tuesday said India had not been ‘ousted’ from the proposed $7 billion tri-nation pipeline, even as it set an August deadline for New Delhi to sign an agreement on the project.
   ‘I want to clarify that contrary to reports, India has not been edged out of the Iran-Pakistan-India pipeline. We continue to engage in discussions leading to tri-nation ministerial meeting next month,’ Iran’s Deputy Oil Minister Hadi Nejad- Hosseinian told reporters after meeting Petroleum Minister Murli Deora here.
   He said against the capacity of 110 million standard cubic metres per day, Pakistan has sought between 30-60 mmscmd of gas and India wants 90 mmscmd. Besides, 30-35 mmscmd of gas would be transported through the proposed pipeline from gigantic South Pars gas field to eastern regions of Iran.
   ‘The demand figures mentioned ramp up over a period of five years. Initially, a single pipeline (meeting requirements of eastern Iran, Pakistan and India on pro-rata basis)
   would suffice and a parallel line can be laid as demand rises,’ he said.
   Deora said India favoured implementation of a single pipeline first and upon its successful operation a second line could be laid.
   He also ruled out any pressure from US for pulling out of the project. ‘Not at all. I don’t think the US is pressurising. I don’t think America can pressurise us.’
   The Iranian Minister said India has to agree on the pipeline by August, failing which Tehran would proceed with bilateral exports to Pakistan.
   ‘We have approval to expedite laying a pipeline to the eastern part of Iran... So if India delays joining the project, we would go ahead,’ Hosseinian said.
   The Iranian Minister, however, categorically ruled out building separate pipelines to supply gas to India and Pakistan.
   ‘There will be a single pipeline meeting demand of all and if need be a second pipeline would be laid, which too would meet all incremental demand in the three countries,’ he said.
   He said oil secretaries of the three countries would meet in Islamabad on May 22-23 to sort out pricing of the gas and culminate discussions into a tripartite ministerial meeting in Tehran in June.

Australia increased interest rates to a five year high Wednesday with a hike of 25 basis points to 5.75 per cent in an effort to head off inflationary pressures in a booming economy.
   The move by the Reserve Bank of Australia (RBA) came after the headline annual inflation rate reached 3.0 per cent in the first quarter, the top end of the bank’s target 2.0-3.0 range, but took many economists by surprise.
   While some had said the first rate hike in 14 months was on the cards as the economy moved ahead, most were expecting the bank to hold steady until later in the year.
   Share prices closed slightly higher as investors reacted to the news by selling banking stocks but buying resource stocks, dealers said.
   The Australian dollar jumped to 76.85 US cents after the news, up from 75.61 cents 24 hours earlier.
   RBA governor Ian Macfarlane said in a statement signs of
   inflationary pressures fuelled by above average international growth and high commodity prices had to be acted upon.
   ‘These domestic and international trends have added to inflationary pressures in an economy that has been operating for some time with rather limited spare capacity and low unemployment,’ he said.
   Prime Minister John Howard said he remained optimistic about the Australian economy, despite the significant challenge posed by high petrol prices.
   ‘I believe that we will continue to grow at a very strong rate because we have the fundamentals right.
   ‘We have quite low levels of inflation and not withstanding the small adjustment to interest rates by the Reserve Bank today, we have historically low levels of interest in this country.’
   Treasurer Peter Costello, who will present the national budget on May 9, said the decision to hike rates would have a dampening affect on the Australian economy as home loan payments would rise.
   Costello told a news conference the RBA’s move should been seen as a precautionary measure because of a strong international economy.

High oil prices could weaken Asia’s strong economic growth, the president of the Asian Development Bank warned Wednesday, adding that producer and consumer nations should work together to lower prices.
   As a whole, Asia’s economy grew by 7.4 per cent last year, and is expected to expand another 7.2 per cent this year. But ‘if the high level of oil prices continues, it will affect the growth outlook of the Asia-Pacific region,’ the ADB president, Haruhiko Kuroda, told reporters.
   He was speaking on the first day of the bank’s annual meeting, this year being held in Hyderabad, a key information technology center in one of the region’s economic powerhouses.
   ‘The oil producers and consumers should sit together and find a sustainable price level,’ Kuroda said.
   High oil prices, these days hovering above $70 a barrel, are expected to be discussed at the conference, which ends Saturday, along with talks on key trends in the international economy — from information technology to labour — and their implications for Asia.
   Iran’s deputy oil minister, M. H. Nejad Hosseinian, said Tuesday in India’s capital, New Delhi, that the price of a barrel of oil could hit the $100 mark this coming winter as demand outpaces supply.
   ‘Oil supply in the short term cannot be increased,’ he told reporters.
   Kuroda said the best way for emerging Asian economies to tackle high oil prices is to raise their energy efficiency. He added the ADB is willing to help.
   ‘We have financed many energy efficiency projects in the past, but annually the amount isn’t so big, so we intend to multiply our efforts,’ he said.
   Kuroda said the ADB would provide loans worth $1 billion to member countries to undertake clean energy projects in the coming years. The new loans would be disbursed by 2008, he said.
   ‘Because of a rapid economic growth in Asia, the region has been suffering from environmental degradation. We have to protect the environment,’ he said.

Bolivia’s leftist president defended his decision to nationalise the country’s natural gas industry despite objections from foreign governments and energy companies, saying Bolivia is seeking ‘partners, not owners’ to help harvest its natural resources.
   President Evo Morales also said he would attend a summit Thursday with the presidents of Argentina, Brazil and Venezuela to discuss Monday’s nationalization announcement, which rattled the region and raised fears it could drive petroleum companies out of South America’s poorest nation.
   ‘We’re not expelling any company, but they will not earn much — not like before,’ Morales told Venezuela’s Telesur TV network late Tuesday. ‘We hope they’ll remain partners and if they don’t respect these laws, we’ll make them respect them with political force.’
   Further raising fears among investors, Bolivia’s government said it also wanted to extend its control over mining, forestry and other sectors of the economy.
   Soldiers were posted at 56 gas installations around the country Tuesday — a day after Morales issued the decree that some saw as an expansion of the leftist, populist polices of Venezuelan President Hugo Chavez.
   Chavez, a close Morales ally, said Morales’ move would help meet the needs of Bolivia’s poor.
   Thursday’s summit in Puerto Iguazu, Argentina, will help ‘avoid all the alarmist news being put out by the world’s media. ... They are not going to sow discord among us, because that’s what they want — to alarm the companies, alarm the people,’ Chavez said.
   In Peru, Ollanta Humala, the nationalist presidential hopeful headed to a runoff election, has said he, too, would force foreign mining and gas companies to renegotiate contracts. But on Tuesday, Humala softened that message.
   ‘We respect the sovereign decisions of our brother nation Bolivia, but what I want to say emphatically is this: We have never talked about either state takeovers or expropriation,’ he said.
   Bolivian Vice President Alvaro Garcia Linera said mining companies could face higher taxes and royalty payments and that the government will intensify enforcement of existing laws to break up big underdeveloped land holdings, apparently to turn them over to the poor.
   The government also will crack down on foreign timber companies violating conservation laws, Garcia said, and would steer companies to export finished wood products rather than raw timber.
   While the gas nationalization decree was not unexpected, analysts said the images of soldiers toting automatic weapons outside refineries and gas fields were reminiscent of past military dictatorships.
   ‘With this move, he risks alienating natural and otherwise sympathetic partners like Brazil and Spain,’ said Michael
   Shifter, a Latin American analyst at the Inter-American Dialogue think tank in Washington. ‘Ordering the military to seize the natural gas fields is unnecessarily confrontational and antagonistic.’
   Bolivia’s Hydrocarbons Chamber, which represents the foreign energy companies operating in the country, issued a statement Tuesday saying while it wanted ‘productive dialogue’ with the government, its ‘unilateral, negative’ move would substantially affect energy companies.
   Brazil is the biggest buyer of Bolivian gas and the owner of Petroleo Brasileiro SA, one of Bolivia’s biggest gas producers.

Malaysia will not allow its water industry to be controlled by foreign corporations, reports said Wednesday as the sector prepares to undergo a major revamp.
   ‘The government is firm that Malaysia will not liberalise the water industry as it is considered a basic utility and should not be opened for international
   market forces to determine,’ Energy, Water and Communications Minister Lim Keng Yaik was quoted as saying by the official Bernama news agency.
   Two new water-related bills to be debated in parliament next week will provide a new regulatory framework, with the federal and state governments to share responsibility for the sector.
   Lim was responding to concerns from civil society groups who said that once water supply and services are provided on a commercial basis, foreigners could be drawn into the sector and lead to rising prices.
   ‘The rationale for introducing the bills is to ensure quality and reliability where water supplies are concerned,’ Lim told The Star newspaper, after a spate of complaints over tainted and muddy water.
   ‘We want to ensure the industry is regulated and that consumers enjoy better services,’ he added.
   But the Coalition Against Water Privatisation (CAWP), one of the key groups lobbying against the legislation, said on Wednesday Lim’s comments meant little, given Malaysia’s international trade obligations.
   ‘In the real politics of negotiations, trading off the competitive advantage of one country for another is a key feature. So Lim’s nice statements don’t carry any weight,’ CAWP’s coordinator Charles Santiago told AFP.
   Malaysia has obligations under the WTO General Agreement on Trade in Services (GATS) to liberalise a number of service sectors, and Santiago said this could put Malaysia under pressure to open up water services.
   ‘Commitments have to be made at the WTO,’ he said. ‘The EU has already requested the opening up of water services under WTO GATS negotiations.’
   The CAWP is expected to meet with Malaysian parliamentarians Thursday to discuss amendments to the legislation.

Rising gas prices had a mixed impact on U.S. auto sales in April, with some automakers reporting plummeting sales of trucks and sport utility vehicles while others appeared unaffected.
   ‘There’s something rolling around related to fuel economy,’ George Pipas, Ford Motor Co.’s U.S. sales analysis manager, said Tuesday, reflecting the wait-and-see attitude many automakers are taking toward fuel prices.
   Industrywide, sales slipped 4 per cent in April compared to the same month a year ago, when they got a boost from a heavy dose of incentives. The seasonally adjusted sales rate for April, which shows what total sales would be if they remained at the same rate for the entire year, was 16.7 million vehicles, according to Autodata Corp. Automakers sold 17 million vehicles in 2005.
   While General Motors Corp. hit pay dirt with its new lineup of SUVs — GMC Yukon sales climbed 36 per cent — Ford struggled with a 15 per cent decline in SUV and truck sales compared with April 2005. Hyundai Motor Co.’s truck and SUV sales fell 27 per cent, but Toyota Motor Corp. and Honda Motor Co. both reported that their light truck sales outpaced car sales.
   ‘In a tough competitive market like this, the victories are model by model, not typically across the board for any particular maker,’ said Paul Taylor, chief economist for the National Automobile Dealers Association. Taylor added that the impact of gas prices seems to be slight so far and that consumers seem to be adjusting and are continuing to buy the size of vehicle that best meets their needs.
   GM said its April sales fell 11 per cent from April 2005, primarily due to a 21 per cent decrease in car sales as the company pulled away from the rental car business. GM’s truck and SUV sales were down 2 per cent.
   Paul Ballew, GM’s executive director of market and industry analysis, said sales to rental and corporate fleets will continue to decline throughout the year as part of the automaker’s restructuring plan. Fleet sales bring in lower margins for automakers and can hurt vehicles’ resale values. Fleet made up 30 per cent of GM’s sales in April, down from 32 per cent a year ago, Ballew said.
   Ford’s April sales fell 7 per cent from a year ago, dragged down by a 15 per cent drop in sales of trucks and SUVs as consumers turned to more fuel-efficient cars and crossovers. Sales of Ford, Lincoln and Mercury cars rose nearly 11 per cent, and the company said sales of its car-based crossover utility vehicles were up 8 per cent.
   Ford also reported the best monthly sales ever for its hybrid Ford Escape and Mercury Mariner, up 68 per cent over last April, after it offered zero-per cent financing on the vehicles. Pipas said the deal, which will remain in effect through July 1, helps erase the $3,000 premium buyers would otherwise pay for a hybrid.
   But sales of trucks and SUVs were disappointing. Sales of the Ford Explorer SUV continued their free fall, plummeting 42 per cent, while Ford’s best-selling F-Series pickups saw a surprising 9 per cent decline. Pipas said Ford saw some payback from March, when pickup sales were especially strong, but he also suspects some F-Series buyers were sitting back and waiting for gas prices to subside.
   ‘We don’t see this buyer leaving the segment to the extent that they have the full-size SUV market, but fuel prices probably had something to do with the F-Series result this month,’ Pipas said.
   SUV sales also were down at Toyota, but sales of pickups and crossovers were up, helping Toyota achieve its best U.S. sales month ever. Overall light truck sales rose 7 per cent for the month, outpacing Toyota’s 3 per cent increase in car sales and helping Toyota achieve a 5 per cent sales gain for the month.
   Honda said its sales rose 3 per cent. Car sales were flat at the Japanese automaker, but truck and SUV sales were up 5 per cent thanks to record-setting sales for the Ridgeline pickup, Odyssey minivan and other models.
   Dick Colliver, Honda’s executive vice president, said Honda’s trucks and SUVs are among the most fuel-efficient in their segment, which helped boost sales.
   ‘We’re not seeing a shift away from light trucks right now, but we are seeing customers make purchase decisions based on fuel economy,’ Colliver said in a statement.
   Car sales shot up 32 per cent at DaimlerChrysler AG’s Chrysler Group thanks to the new Dodge Caliber, which replaced the Neon sedan. But truck and SUV sales were down 19 per cent, resulting in an 8 per cent decline in overall sales. Chrysler came out swinging to reverse the trend, announcing zero-per cent financing on selected minivans, trucks and SUVs through July 5.
   ‘Gas prices and interest rates are challenging consumers’ spending habits and affecting everything from groceries to household goods to some sectors of automobile sales,’ said Gary Dilts, Chrysler’s senior vice president of sales.
   Nissan Motor Co. said its light truck sales were down 3 per cent for the month, but its car sales dropped even further, by 7 per cent. Nissan’s overall sales fell 5 per cent in April.
   Hyundai’s sales increased only slightly for the month, with a 10 per cent increase in car sales helping to offset a 27 per cent drop for light trucks. Even with that drop, the South Korean automaker said its U.S. sales set an April record.

Three months after succeeding the famously discreet Alan Greenspan, Federal Reserve chairman Ben Bernanke has been dealt a painful lesson in the cost of careless talk.
   A private conversation involving the new Fed chief at Saturday’s annual dinner of the White House Correspondents’ Association found its way out into public this week.
   Cue frantic trading as investors dumped shares and bonds on the belief that Bernanke was backtracking on a hint made last week, that the Fed is set to call a halt to its long campaign of interest rate hikes. Unfortunately for Bernanke, his interlocutor at the weekend’s black-tie event was Maria Bartiromo, one of the best known financial journalists in the United States.
   She lost little time in relaying the gist of his remarks to her viewers on the CNBC financial news network Monday, during a live broadcast from the floor of the Chicago Mercantile Exchange.
   ‘I asked him whether the markets got it right after his congressional testimony and he said flatly, ‘no’,’ she said, her words drowned out to a roar from traders as markets began to re-appraise Fed policy. ‘I’m guessing that Bernanke is experiencing pangs of regret right now for saying anything at all,’ commented Steve Stanley, chief economist at RBS Greenwich Capital.
   ‘I’ll bet anyone a nickel that he will never do that again,’ he said.
   Bernanke succeeded Greenspan at the start of February, promising clearer communication from the US central bank. But too much clarity can be a bad thing, he might feel now.
   Whether or not Bartiromo’s account was correct, according to Bank of Tokyo-Mitsubishi UFJ currency economist Derek Halpenny, ‘the story can only undermine the credibility of the Federal Reserve and its new chairman’.

The Etihad Airways regional general manager of Asia-Pacific, Charles Pheips-Penry, arrived in Dhaka on May 3 to kick off the inaugural flight of the company.
   To mark this momentous inauguration, a series of events will be held in presence of representatives from the Ministry of Civil Aviation and Tourism, Zia International Airport, the Biman Bangladesh and the high officials of Etihad Airways.
   Charles has 21 years experience in aviation business. He spent 16 years with British Airways in a variety of positions and countries, including in the Middle East, Africa, Korea, China, as well as in brand management, and launching a new franchise airline operation in Italy.

South Korea’s parliament has approved a bill which will allow the government to impose taxes on gains made by tax haven-based foreign funds, the finance ministry said Wednesday.
   The bill, approved on Tuesday, will help the ministry enact new rules under which investment income derived in South Korea will face a withholding tax, regardless of double taxation treaties.
   Ministry officials say the new system is in line with international standards and is aimed at stopping foreign funds based in tax shelters from abusing the pacts to avoid tax payments.
   Anti-foreign sentiment has been stirred in recent years by big profits realized by some foreign investors in tax-free operations such as US fund Lone Star, which acquired a 51-per cent stake in Korea Exchange Bank in 2003.

The European Commission said Wednesday it was fining seven companies 388 million euros (490 million dollars) for running a cartel in the market for bleaching chemicals.
   The EU competitions regulator found that the companies had broken EU cartel rules in the market for hydrogen peroxide and perborate between 1994 and 2000.
   In reaction, it slapped the fine on Akzo Nobel of the Netherlands, Edison of Italy, FMC Foret of the United States, Kemira of Finland, Snia of Italy, Solvay of Belgium and Arkema of France.
   German group Degussa escaped fines because it informed on the cartel, and French company Air Liquide was not fined because it left the market 1998.
   ‘Cartels are unacceptable corporate behaviour that deprive customers of the benefits of the single market,’ said Competition Commissioner Neelie Kroes.

Indian Prime Minister Manmohan Singh hailed his first two years in office and said the next three would show that his was a caring government chasing ‘growth with a human face’ in an interview published Wednesday.
   ‘I think our performance has been good,’ Singh told Britain’s Financial Times business daily.
   ‘In the last two years, we’ve laid down a policy framework to ensure that growth is as inclusive as it can be, while at the same time we’ve liberalised the entrepreneurial reservoirs of our country.’
   He told the FT that India’s economy had grown by between 7.5 per cent and eight per cent for the third year in a row.
   However, Singh said that heading a coalition government had prevented him from making as much progress as he would like in areas such as labour reform and privatisation.

The dollar struggled against major rivals on Wednesday as the market focused on a surprise rate rise by the Australian central bank, dealers said.
   The euro rose to 1.2642 dollars in European trade from 1.2618 dollars late on Tuesday in New York.
   The dollar stood at 113.31 yen, unchanged from on Tuesday.
   Gold’s price meanwhile struck 676.75 dollars per ounce—the highest point since October 1980.
   Traders tracked events in Australia, where central bank policymakers hiked the country’s key interest rate by a quarter-point to 5.75 per cent—a five-year high—in a bid to head off inflationary pressures in a booming economy.
   The move by the Reserve Bank of Australia (RBA) came after the headline annual inflation rate reached 3.0 per cent in the first quarter, the top end of the bank’s target 2.0-3.0 per cent range.
   While some analysts had said the first rate hike in 14 months was on the cards as the economy moved ahead, most were expecting the bank to hold steady until later in the year.
   Following the hike, the Australian dollar rose to 0.7710 US dollars in European trade, from 0.76 before the decision.
   ‘The dollar has come under renewed selling pressure against most major currencies... after the Reserve Bank of Australia unexpectedly raised its key interest rate,’ said Derek Halpenny, economist at The Bank of Tokyo-Mitsubishi in London.
   ‘The surprise decision will only serve to reinforce the very bearish dollar sentiment in the foreign exchange market at present.
   ‘The catalyst for the dollar sell-off has been the perceived approach of a pause in Federal Reserve monetary tightening as other central banks carry on with monetary tightening thus narrowing the favourable interest rate differential that the US currently enjoys,’ Halpenny added.
   US borrowing costs stand at 4.75 per cent after a run of quarter-point hikes, but many analysts expect them to peak at 5.0 per cent.

Emirates may order up to 100 mid-sized planes
Dubai’s Emirates airlines is looking to order up to 100 mid-sized aircraft, double the number previously announced, in a deal that could be worth $20 billion, company officials said on Wednesday. Emirates had previously said it was considering buying 50 mid-sized planes and was in talks with Airbus and Boeing Co. ‘If we get what we want, then we could go for a big order, even up to 100, why not? We need more aircraft,’ The Gulf News daily quoted Emirates President Tim Clark as saying. An Emirates official confirmed Clark’s remarks.
— Reuters

Siemens buys Elpro unit for 250m rupees
India’s Siemens Ltd. has bought the isolator business of Elpro International Ltd. for 250 million rupees, the company said on Wednesday. Siemens said Elpro’s isolator plant in Hyderabad would be integrated with its power transmission and distribution (PTD) division. ‘This new business will enable us to close the gap in our PTD portfolio and further strengthen our position in the growing power sector,’ Managing Director J Schubert said in a statement.
— Reuters

Jet Airways sees
new planes boost overseas
operations in ’07
India’s largest private carrier, Jet Airways Ltd., said on Wednesday international operations would surge in 2007 once the delivery of wide-body planes start and the Air Sahara acquisition is completed. Jet is acquiring 20 long-haul planes for its overseas routes, for which deliveries start in early 2007 and end in 2009. Jet has ordered 10 A330-200 planes from Airbus, and another 10 777-300 ER planes from Boeing Co.
— Reuters